There are a few investment terms that will give your investment club a basic introduction to the language of investing.  The information has been compiled from the following website: http://www.netvest.com/edu/edu_glossary.html, which is also a good resource for other information about investing.

All or None (AON)
A stipulation for either a buy or a sell order which instructs the broker to either fill the order in its entirety of to fill none at all, ie. The customer won't accept a partial execution (only 300 shares out of an order for 1000).

Asked Price

The lowest price that anyone has declared that they will sell their security for at a given time. In over-the-counter stocks, the "ask" is the best quoted price at which a Market Maker is willing to sell a stock.

At-the-Money

An option where the strike (exercise) price is exactly equal to the trading price of the underlying security.

Bid Price

The highest price anyone has declared that he wants to pay for a security at a given time.

Broker

1. An individual or firm that charges a fee or commission for executing buy and sell orders submitted by another individual or firm.
2. The role of a brokerage firm when it acts as an agent for a customer and charges the customer for its services.

Call Option

An option contract that gives the holder the right to purchase, and places upon them the obligation to sell, a specified number of shares of the underlying stock at the given strike price on or before the expiration date of the contract.

Commercial Paper

Short-term loans that mature within 2 to 270 days and are made to banks or corporations.

Commodity

Bulk goods such as metals, foodstuffs and grains that have their prices determined by competitive bids and offers.

Common Stock

An equity security that represents ownership in a corporation.

CUSIP Number

A unique 9-digit number code for a given class of security (i.e.: Microsoft common stock or Acorn International Fund). CUSIP stands for the Committee on Uniformed Security Identification Procedures.

Day Order

An order to buy or sell which, if not executed, expires at the end of the trading day it was entered.

Dealer

The role that a securities firm takes when it acts as a principal in a particular trade. A firm is acting as a dealer when it buys or sells a security for its own account and at its own risk and then charges the customer a markup or markdown.

Do Not Reduce (DNR)
A stipulation placed on an order that instructs the broker not to decrease the limit price on buy-limit and sell-stop orders on the record date of a cash dividend.

Exchange

Any organization, association or group of persons that maintains or provides a marketplace in which securities can be bought and sold. An exchange does not have to have a physical place of business and several electronic exchanges do business.

Exercise (Option)
When the holder of a long option position purchases (if calls are owned) or sells (if puts are owned) the underlying security at the exercise (strike) price. The exercise is accomplished when the customer holding the long position gives his broker instructions to exercise his position. This must be done in accordance with the rules pertaining to timing established by the exchanges and individual brokerage firms.

Exercise Price

Also known as the strike price. The price that the owner (purchaser) of an option can buy (if calls are owned) or sell (if puts are owned) the underlying security by exercising his option.

Futures

Exchange-standardized contracts for the purchase or sale of a commodity at a future date.

Futures Contract

A standardized, exchange-traded contract to make or take delivery of a particular type and grade of commodity at an agreed upon place and point in the future. Futures contracts are transferable between parties.

Index

A statistic to measure market performance. A popular index is the Standard & Poor's 500, which incorporates a broad base of 500 stocks, including 400 industrial companies, 20 transportation companies, 40 utilities, and widely considered the benchmark for large stock investors. Some of the stocks in the index have a greater influence on the direction of the market than other stocks do, so the S&P 500 is calculated by giving a greater weight to some stocks.

Limit Order

An order to buy or sell a stated quantity of a security at a specified price or at a better price (higher for sales or lower for purchases).

Market Order

An order to buy or sell a stated amount of a security at the best price available at the time the order is received in the trading marketplace.

NASDAQ National Market Securities

The NASDAQ National Market consists of over 3,000 companies that have a national or international shareholder base, have applied for a listing, meet stringent financial requirements and agree to specific corporate governance standards. To list initially, companies are required to have significant net tangible assets or operating income, a minimum public float of 500,000 shares, at least 400 shareholders, and a bid price of at least $5.

NASDAQ Small Cap Market Securities

The NASDAQ Small Cap Market consists of over 1,400 companies that want the sponsorship of Market Makers, have applied for listing and meet specific financial requirements. Once a company is approved and listed on this market, Market Makers are able to quote and trade the company's securities through a sophisticated electronic trading and surveillance system.

Penny Stocks
Low prices stocks trading in the over-the-counter market. Typically refers to shares trading below one dollar a share.

Short Selling

Sale of any security not owned by the seller. The security is 'borrowed' from the brokerage firm and all short sales must be done in a short (margin related) account. Customer's must state that a sale will be 'short' at the time the order is placed with the broker. The customer "selling short" is using a legitimate trading strategy and assumes the risk that he will be able to buy the stock at a more favorable price than the price at which he sold short.

Stop Order

An instruction to a Broker, which becomes a market order when the stock trades at or beyond the specified price. Thus, the price at which the order executes may not necessarily be the specified stop price. A sell stop is placed below the current trading price and is used to protect unrealized profits or limit losses on holdings should the price begin to decline. A "trailing stop" is a stop price that is moved up periodically as the security price moves up.

Note: If a stop order is placed at a price that would trigger an immediate execution, then the specialist or the market maker rejects the order as invalid, and no order exists. For example, ABC stock closes at 50 on Monday. Monday evening, a customer enters a sell stop order at 49 1/2. Since the market is closed at the time the order is placed, it will not become a working order until the opening bell the following business day. The next day, ABC actually opens at 49 3/8, an eight less than the stop price. The new stop order is canceled, with no order (or downside protection) working. Had the order been placed as a good til canceled order during market hours the previous day, then it would become a market order following the opening trade, which was below the stop price. For your protection, always try to place stop orders during market hours.

Trading Authorizations

Document granting power-of-attorney rights to an agent of the account holder(s). You will find downloadable forms for both Limited Trading Authorization and Full Trading Authorization in the Industry Forms Download area.