Stock Basics
What does owning a stock mean?
You own a small piece (share) of a company.
What does one candlestick represent?
A stock’s price movement during a specific time period.
What does a bullish trend mean?
Prices are going up.
You buy a stock at $10 and sell it at $35. What is your gain?
$25
What is a dividend?
Money a company pays shareholders for owning stock.
What is a ticker symbol?
A short code (letters) that represents a company's stock
Name the four things a candlestick shows.
Open, Close, High, Low.
What does a bearish trend mean?
Prices are going down.
Buy at $100, sell at $50. What happened?
$50 loss
A stock pays $2 per share. You own 10 shares. How much do you earn?
$20
Why do companies sell stock?
To raise money to grow, hire, or create new products.
What do the wicks (shadows) show?
The highest and lowest prices.
Grocery Store, Kroger just hired a new CEO who is planning to create new products, introduce new processes in operations, and more investors are interested in buying shares for the company. Making these moves will impact their stocks causing a _____ trend?
Bullish
What is the formula for dollar gain/loss?
(Sell Price – Buy Price) × Number of Shares$25 × 12 = $300
An investor buys 120 shares of a stock at $30 per share.
The stock pays a $1.50 dividend per share each year
The investor holds the stock for 2 years
The investor does not sell the stock
How much money does the investor earn only from dividends over the 2 years?
$1.50 × 120 × 2 = $360 in dividends
How should an investment portfolio look?
If the closing price is higher than the opening price, the candlestick is called what?
Bullish.
Sportswear company Nike recently announced:
Lower sales than expected
Layoffs to cut costs
Slower demand for sneakers
More investors are starting to sell their shares
Because of this news, Nike’s stock is most likely experiencing a _____ trend.
Bearish
Buy 8 shares at $25, sell at $18. What is the total loss or gain?
($18 – $25) × 8 = –$56 loss
An investor buys 20 shares of a stock at $18 per share.
The stock pays a $1.25 dividend per share each year
The investor holds the stock for 2 years
After 2 years, the investor sells the stock for $22 per share
What is the investor’s TOTAL profit from this investment?
1️⃣ Capital Gain
($22 − $18) × 20 = $4 × 20 = $80
2️⃣ Dividend Income
$1.25 × 20 × 2 = $50
Total Profit = $80 + $50 = $130
What determines a stock's price?
Supply and demand (buyers vs sellers).
What does a sideways chart usually mean?
Investors are uncertain; the stock is consolidating.
Streaming company Netflix reports that:
Subscriber growth is steady but not increasing
Profits meet expectations, but no major growth is announced
No big positive or negative news comes out
Investors are waiting before buying or selling
Because of this, Netflix’s stock price stays within the same price range for several weeks.
This situation is most likely causing a _____ trend.
Flat (Consolidated / Sideways) trend
A student buys 12 shares of a stock at $25 per share.
The stock pays a $1.50 dividend per share each year
The student holds the stock for 2 years
After 2 years, the student sells the stock for $32 per share
($32 − $25) × 12
= $7 × 12
= $84
$1.50 × 12 shares × 2 years
= $36
Total Profit = Capital Gains + Dividends
$84 + $36 = $120 total profit
An investor has $600 and is choosing between Stock A and Stock B.
Stock A
Price: $30 per share
Dividend: $1 per share per year
Sold after 2 years for $36
Stock B
Price: $50 per share
Dividend: $3 per share per year
Sold after 2 years for $54
Which stock makes more total profit after 2 years?
Stock A earns more total profit ($160 vs $120)