UNIVERSITY OF RIJEKA

FACULTY OF ECONOMICS AND BUSINESS

The Stock Market

Poslovni engleski jezik A2

 The stock market

primary market – the place where newly issued shares have been
sold ( companies can raise money)

secondary market – the place where the shares can be repeatedly

traded at the stock exchange on which the company is listed
( companies can make money)

Faculty of Economics/ www.efri.uniri.hr

 Shares

ordinary shares = the basic voting shares of a corporation

all other shares = preferred/ preference shares

categories of shares:
 blue chips = shares in large companies with a reputation for
quality, reliability and profitability
 growth shares = shares that are expected to rise in value
 income shares = shares that have a history of paying high
dividends
 defensive shares = shares that provide a regular dividend and
stable earnings, but whose value is not expected to rise or fall
very much
 value shares = shares that investors believe are currently
trading for less than they are worth

Faculty of Economics/ www.efri.uniri.hr

 Investors

bulls = investors who expect prices to rise

bears = investors who expect prices to fall

stags = investors who buy new share issues hoping that they will be
over-subscribed ( they hope there will be more demand than
available stocks, so the successful buyers can immediately sell their
stocks at a profit)

a period when most of the stocks on a market rise is called a bull

market

a period when most of them fall in value is called a bear market

Faculty of Economics/ www.efri.uniri.hr

 Agreements and contracts

futures contract = agreement to sell an asset at a fixed price on a
fixed date in the future (normally in fixed time
periods of three, six or nine months)
= they are traded on a wide range of agricultural
products, industrial metals, precious metals and
oil  commodities

options = they give the right (possibility), but not the obligation to
buy or sell an asset in the future

derivatives =financial products whose value depends on – or is
derived from – another financial product, such as a
stock, a stock market index or interest rate payments

Faculty of Economics/ www.efri.uniri.hr