Reference
Stock promotion glossary
Plain definitions for the terms around paid stock promotions: touting, 17(b), float, ATM offerings, reverse splits, trading suspensions, relative volume and more.
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On this pageAll terms
Plain definitions for the words that come up around paid stock promotions: the legal terms in a disclosure, the market terms in a promotion email, and the filing terms you'll meet when you check a company's paperwork. Every entry has its own link, so you can share a single definition.
All terms
- At-the-market (ATM) offering#
- A program that lets a company sell new shares directly into the market over time at prevailing prices. How much it can sell depends heavily on trading volume.
- Bid-ask spread#
- The gap between the highest price a buyer will pay and the lowest a seller will accept. Wide spreads in thin stocks mean your real buying and selling prices are worse than the last trade suggests.
- Convertible note#
- Debt that can be converted into shares. When the conversion price is set at a discount to the market price, a lower stock price means more shares on conversion.
- Dilution#
- The reduction in each existing share's slice of the company when new shares are issued, through offerings, warrant exercises, note conversions or stock compensation.
- Disclaimer (promotion disclosure)#
- The statement a paid publisher makes about the compensation it received: usually the ticker, the amount, who paid and the dates. See how to read one.
- Float#
- The shares actually available for public trading, excluding shares held by insiders or otherwise restricted. Often called the public float.
- Investor relations (IR) firm#
- A firm that handles a public company's communications with investors. Some small-cap IR or "awareness" firms also buy paid placements. See who pays whom.
- Issuer#
- The company whose securities are being sold or traded. In a promotion, the issuer may be the funder, or may have nothing to do with the campaign.
- Liquidity#
- How easily you can buy or sell without moving the price. Promoted stocks are often illiquid outside the campaign itself, which is why exits can be the hardest part.
- Low float#
- A small float. With few shares available, modest buying or selling can move the price a long way. See the red flags checklist.
- Microcap#
- A company with a small total market value, commonly taken as under a few hundred million dollars. Microcaps often have little public information and thin trading, which makes their prices easier to move.
- Minimum bid price requirement#
- An exchange listing rule requiring a stock to keep trading above a set price. Nasdaq's continued-listing minimum is $1.00; falling below it for 30 consecutive business days starts a compliance process.
- Over the counter (OTC)#
- Trading outside a national securities exchange, through broker-dealer quotation systems such as OTC Link. Disclosure standards vary by tier, and some OTC companies don't file reports with the SEC.
- Paid stock promotion#
- Content that features a specific stock, published because someone paid for it to be published. Legal when the payment is disclosed. See what is a paid stock promotion.
- Penny stock#
- A very low-priced stock. Under SEC rules the term generally covers stocks trading below $5 a share, subject to exceptions, and broker-dealers face extra requirements when selling them.
- Pre-market and after-hours#
- Trading outside the regular 9:30 AM to 4:00 PM ET session. Promotions disclosed in the evening often see their first trading in these sessions, where liquidity is thinner.
- Relative volume#
- A day's trading volume divided by the stock's normal volume (we use its median daily volume over roughly the 30 trading days before the promotion). Shows whether real money arrived, independent of share price.
- Reverse stock split#
- Combining shares so there are fewer of them at a proportionally higher price, for example ten shares becoming one. The company's value doesn't change. Often used to stay above an exchange's minimum price.
- Rule 15c2-11#
- The SEC rule governing when broker-dealers may publish quotes for OTC stocks. Since its 2020 amendments it generally requires current, publicly available information about the company.
- Section 17(b)#
- The provision of the Securities Act of 1933 that requires anyone paid by an issuer, underwriter or dealer to describe a security to disclose the payment and its amount. See Section 17(b) explained.
- Shelf registration#
- A registration statement (often on Form S-3) that lets a company sell registered securities later, in one or more pieces, without a new registration each time.
- Survivorship bias#
- The distortion that comes from measuring only what survived. Halted or delisted stocks have no clean price, so they drop out of return statistics, making them look better than reality. See our data guide.
- Touting#
- Promoting or recommending a stock. In securities law it usually means promoting a stock for pay, and illegal touting means doing so without disclosing the payment.
- Trading halt#
- A temporary stop in trading imposed by an exchange or FINRA, for example pending news or after an extreme price move. Shorter and more routine than an SEC suspension.
- Trading suspension#
- An SEC order halting trading in a stock for up to ten business days, typically over concerns about public information or possible manipulation. OTC quoting doesn't automatically resume afterwards.
- Underwriter and dealer#
- Firms that help a company sell its securities (underwriters) or buy and sell securities for their own account (dealers). Section 17(b) covers payments from them as well as from the issuer.
- Warrant#
- A right to buy new shares from the company at a set exercise price until an expiry date. Warrants become worth exercising when the stock trades above that price.
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Terms our data uses
The terms behind our own tables and figures are defined once, on How it works:
Educational content only. Nothing here is investment advice, a recommendation to buy or sell any security, or a prediction about any stock. paidpromotracker reports disclosed public information and doesn't evaluate the merits of any company or campaign. See the full disclaimer.