A strategy where an investor executes a short sale on a stock in which they already maintain a long position. This effectively 'locks in' their financial gains or losses, regardless of the current stock price.
An arbitrageur is a person or firm engaged in arbitrage, taking advantage of price differences of the same security in different markets. They attempt to profit from these discrepancies without exposing themselves to significant risk.
A block refers to a large quantity of stock or a large dollar amount of bonds held or traded, typically defined as 10,000 shares or more of stock or $200,000 or more worth of bonds.
A critical financial concept, the break-even point represents the point at which total revenues equal total costs, resulting in neither profit nor loss. It is widely used in finance, real estate, and securities to determine financial health.
In securities trading, a buy order is an instruction to a broker to purchase a specified quantity of a security at the market price or another stipulated price.
Cum rights refer to trading shares that include the rights or entitlements attached to securities, typically related to dividends or other special benefits. Investing in cum rights allows shareholders to receive upcoming dividends or participate in other corporate actions.
Dark pools are specialized financial trading platforms that enable the buying and selling of large quantities of securities, often anonymously, without immediate public disclosure of the trade prices. These platforms offer benefits like improved trading prices for investors but also pose risks such as increased market volatility and reduced market transparency.
A day order is an order to buy or sell securities that expires unless executed or canceled the day it is placed. All orders are typically day orders unless otherwise specified.
A computerized securities marketplace where transactions are facilitated by market makers and brokers using distributed processing, replacing the earlier centralized auction markets.
Deutsche Börse AG is an international market-place organizer for trading in securities, commodities, and derivatives, based in Frankfurt, Germany. It operates the Frankfurt Stock Exchange and the clearing and settlement facility Clearstream, and it is a joint owner of the electronic derivatives exchange Eurex.
A system of trading on a stock exchange in which the functions of stockbroker and stockjobber are carried out by separate firms. Dual capacity existed on the London Stock Exchange prior to October 1986 when a single-capacity system was introduced.
Dumping refers to the practice of selling goods at a price lower than their cost or lower than the price charged in the domestic market. This is done to eliminate surplus, undermine foreign competition, or dispose of goods unacceptable for the domestic market.
Execution refers to the formal process of signing, sealing, and delivering a contract or agreement to render it legally valid. In the context of securities, execution pertains to the act of carrying out a trade or order by a broker.
A 'fail to deliver' situation occurs when the broker-dealer on the sell side of a contract does not deliver the securities to the broker-dealer on the buy side. This typically results from a broker not receiving delivery from its selling customer.
Flipping involves buying and then quickly reselling real estate, securities such as IPOs, or other assets for a profit. It relies on the volatility of prices and market efficiency.
The fourth market involves the direct trading of large blocks of securities between institutional investors, bypassing brokers to save on commissions.
An indicative quote is a price provided to a client as a guide to current market prices. It is not a firm offer to buy or sell at the quoted price.
An institutional investor is an organization, such as a bank, insurance company, or pension fund, that trades in very large volumes of securities. Institutional investors tend to dominate stock exchanges in many countries.
A limit order is an order to buy or sell a security at a specific price or better. The broker will execute the trade only within the price restriction, ensuring that the desired price or a more favorable one is achieved.
Manipulation refers to creating a false appearance of active trading or controlling by shrewdness or influence. In finance, it's illegal and subject to penalties. In psychology, it involves behavior to control others.
A market order is an instruction given to a broker to buy or sell a security at the best available price at the moment the order is placed. This is executed immediately under current market conditions.
A matched bargain is a type of stock transaction in which a sale of a specific quantity of stock is matched with a purchase of the same quantity of the same stock, often conducted electronically on exchanges.
NASDAQ, an electronic market for securities that began in 1971, has grown to become the largest stock market in the USA, listing more than 3000 companies. It was the first screen-based trading system to operate without a physical trading floor.
NYSE Euronext was a multinational financial services corporation that operated multiple securities exchanges, including the New York Stock Exchange and Euronext. It facilitated global trading and investments, providing market data, listings, and trading services.
An odd lot in securities trading refers to a block of stocks or bonds that is fewer than 100 shares. This is considered a non-standard trading size and can sometimes incur different types of handling fees or treatment by brokers.
The term 'On Margin' refers to the act of purchasing securities by paying only a fraction of their price and borrowing the rest from a broker or a financial institution. This practice allows investors to buy more securities than they could with their available funds, using leverage to amplify potential gains or losses.
The term 'Or Better (OB)' is an indication on an order ticket for a limit order to buy or sell securities that instructs the broker to execute the order at a price better than the specified limit price if a better price is available.
Profit taking is the action by short-term securities or commodities traders to cash in on gains earned on a sharp market rise. It can result in temporary downward pressure on prices.
A secondary market is a marketplace where investors buy and sell securities they already own. It differs from the primary market, where securities are initially issued. The secondary market provides liquidity and enables price discovery for traded assets.
A secondary market is a crucial component of the financial market where securities are traded among investors after being initially offered to the public on the primary market.
An abbreviation for the Stock Exchange of Hong Kong, a key financial hub for trading securities and providing a marketplace for investors and companies.
Selective Credit Controls represent the ability of the Federal Reserve Board (FRB) to establish specific terms and conditions for various credit instruments, particularly affecting the trading of securities in the stock market through margin requirements.
A selling climax refers to a sudden plunge in security prices when investors, driven by panic, simultaneously decide to dump their holdings. This event can sometimes signal the bottom of a bear market, after which the market may start to rise.
The term 'Settlement Date' refers to the specific date on which a transaction is finalized and the respective assets are transferred between the buyer and the seller. This term is relevant in various domains such as real estate and securities trading.
The Shanghai Stock Exchange (SSE) is one of the largest stock exchanges in the world, located in Shanghai, China. It plays a pivotal role in China's capital markets and offers a platform for securities trading, including stocks, bonds, and derivatives.
A short sale can refer to both an arrangement within financial markets involving the sale of securities, as well as an arrangement between a mortgagor and mortgagee involving a real estate transaction.
The SIX Swiss Exchange is Switzerland's primary stock exchange, facilitating trade in a variety of securities including stocks, bonds, and derivatives. It is renowned for its efficiency and innovative trading technology.
A marketplace for the sale and purchase of securities, where prices are determined by the forces of supply and demand. Stock exchanges facilitate capital raising for public companies, governments, and other entities, while providing liquidity for investors.
An advanced electronic order book trading system utilized by the London Stock Exchange (LSE) to facilitate the matching and execution of orders for securities.
Stock index futures are financial derivatives that blend traditional commodity futures trading characteristics with those of securities trading. They utilize composite stock indexes to enable investors to speculate on general market performance or to hedge long or short positions.
A stop order is a directive given to a securities broker to buy or sell a security at the market price once the specific stop price has been reached. This type of order is primarily used to protect profits and limit losses.
The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan and among the largest, most important, and most active stock markets globally. Transitioning from a continuous auction market to a fully computerized system, the TSE operates without a physical trading floor.
The day on which a security or commodity future trade actually takes place. The settlement date usually follows the trade date by three business days but can vary depending on the transaction and method of delivery used.
A trading halt is a temporary suspension of trading for a particular security, typically imposed by a regulatory authority to ensure fair trading and to allow the dissemination of important information.
A trading post is a physical location on a stock exchange floor where specific securities are bought and sold. It serves as a focal point for the activities of market makers, brokers, and traders.
In financial markets, a trading unit refers to the standard number of shares, bonds, or other securities that is generally accepted for ordinary trading purposes on exchanges.
An unlisted security is a financial instrument such as a stock or bond that is not listed on any major stock exchange and is typically traded over-the-counter (OTC).
