Investing 101

_WhatIF: Earnings helps traders make sense of, and take action during earnings season. "What if..." is the question investors are always asking themselves. "What if oil drops from here?" or "What if the Fed surprises at the next meeting?" or "What if Microsoft beats earnings?"_

_This app educates investors and helps them understand what is going on in markets – before and after announcements. WhatIF is free and available to all traders at toggle.ai/earnings, the App Store, and the Play Store._

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Before you get into trading, you need to understand the basics. This includes concepts and frequently used terminology in the equities market. You can’t call yourself a true “trader” till you speak the lingo. 

**Beta** - measure of a stock’s volatility relative to the overall market. A large equity index, like the S&P 500, is used as a benchmark and given a Beta value of 1.0. Therefore the Beta value of a stock is a relative measure to the movement of the overall market. If a stock has a higher volatility than the overall market, its Beta value will be greater than 1. If the stock swings less than the market does, its Beta value will be less than 1. Stocks with a high Beta value carry higher risk, but also the potential for a higher return, and vice versa for stocks with a lower Beta value. 

**Shares outstanding** - refers to the total number of shares issued by a company when they went public, including restricted shares (shares that cannot be publicly traded). This value can change if the company chooses to repurchase shares or or sell additional shares. Additionally, if the company has issued any stock options, this number can change in the future too. 

**Volume** - refers to the number of shares or contracts traded for a specific security during market open hours. This measure is used in all the different markets for different asset classes. This is a good measure of an asset’s trading activity and hence liquidity during market hours. 

**Range** - market prices fluctuate throughout the day, month and year. One way to observe price volatility is through the range, either daily or 52 week range (price movement over the last year). The range is calculated for different horizons by taking that specific horizon’s high minus the low. The low price is called the support price and the high price is called the resistance level because if either price is hit, this will cause a large move in the price, down or up. One type of investing (range-bound trading) focuses on trading a security between a defined range over time. 

**Earnings date** - scheduled date for the company to announce quarterly earnings. The markets react based on if earnings expectations will be met, beat or missed. 

Before you get into equity trading, you need to understand the basics.

Equity Due Diligence

Stock and Equity

## TL;DR

- A stock market index covers the entire market or a section of the stock market
- The Wilshire 5000 index covers the entire US stock market
- Sector indexes cover specific sectors of the economy
- Indexes are used to measure performance of the market or compare portfolio performance against a benchmark. 

An equity index or a stock market index, is an indicator for the performance of the stock market, or a specific subset. For example, the largest equities in the US stock market are covered and measured by the performance of the S&P 500. 

On the larger end, the Wilshire 5000 index covers the “entire stock market” because it includes all publicly traded companies headquartered in the US. This index can be used to measure the performance of the US stock market. 

On the more specific side, you can find an index which covers a specific sector of assets. For example, the S&P Technology Select Sector is an index which covers all the technology companies covered in the S&P 500 index. Furthermore, additional indexes cover specific sectors of the economy.

These indexes are used as measures to track the performance of the overall economy or a specific sector. However, indexes can also be used by investors to test the performance of their portfolio against a benchmark. E.g. If RJ's portfolio is lagging behind the performance of the S&P 500 index, this is an indicator for him to rebalance and reposition himself. 

Understanding Equity Indices

TL;DR

Equity Due Diligence