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A | B | C | D | E | F | G | I | J | L | M | N | O | P | R | S | U | Y
A
All or None
A market or limited price order which is to be executed in its entirety or not at all.
Asked Price
When selling Securities, it is the lowest price that someone has stated they will sell their security for at the given time.
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B
Bid Price
When buying Securities, it is the highest price that someone has stated they are willing to pay at a given time for the security in question.
Bid-Ask Spread
The difference between the ask and the bid price of a security.
Bear Markets
Markets where prices on stocks are on the overall decline.
Blue Chip Stocks
Dividend-paying stocks that belong to large, established companies. The term derives from the blue-chip in the game of poker, being the highest value chip.
Bond
A long-term promissory note in which the issuer agrees to pay the owner the face value on a future date and to pay interest at a specified rate at regular intervals.
Broker
Registered individuals who sell securities to the public.
Bull Markets
Markets where prices on stocks are on the overall rise.
Buying Power
With a 50% beginning requirement, buying power is the dollar value of marginable securities that a customer may buy against the marginable securities already present in their account.
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C
Call Option
A stock Option that gives the holder the right to buy shares of a given stock at a given strike price before the Expiration Date of the contract.
Cancel
A call given to a broker to stop processing an order that was previously given.
Capital Gain
The monetary gain of an asset that is calculated by its selling price minus the cost basis.
Cash Account
A type of account with a brokerage firm that requires that all transactions must be settled in full, with no borrowing or margin, by the settlement date for the transaction. Specific accounts that are required to be Cash Accounts include Individual Retirement Accounts (IRAs).
Commission
Fee charged by a broker or brokerage firm to their customers for dealing on their behalf in the securities markets.
Commodity
Any tangible item that can be bought and sold. Raw materials. Ex: Raw lumber, wheat, coffee, metals, etc.
Common Stock
A representative Equity share proving ownership in a specific corporation.
Covered Option
An option writing form in which the writer of the Option (the seller) owns the security and sells a call against it. If the option is then exercised, the stock can be called away. A covered option can also allow for a put sell when one is short the underlying stock of the option.
CUSIP
CUSIP stands for the Committee on Uniformed Security Identification Procedures. A unique nine-character alpha/numeric code appearing on the face of each stock certificate that is assigned to a security by Standard & Poor's Corporation. The number is used to expedite clearance and settlement.
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D
Day Order
An order for buying or selling a security that, if not executed by the end of the trading session (day), is automatically canceled.
Day Trading
A trading strategy whereby an individual through a high volume of trading activity attempts to profit from slight changes in the price of securities by buying and selling very short-term positions for his own account. This strategy can be highly risky, and retail investors engaging in such activities should do so only with funds they can afford to lose.
Dealer
The role of a securities firm when it works as a principal in a particular transaction.
Dividend
A portion of company earnings that is paid the investors in that company's Stock. The dividend can be given in the form of additional company stock or straight cash payment. The dividend must be declared by the company's board of directors.
Dow Jones Industrial Average
A well-known index, based on the average prices of thirty Blue-chip Stocks traded on the New York Stock Exchange(NYSE).
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E
Equity
1. In a brokerage account: The market value of the securities held in the account, minus any debts and added to any credits in the account balance. 2. In a corporation: Total ownership interest in a corporation, made up of both Preferred and common shareholders.
Exercise
To put into action the bought right of an options holder, either to sell, as in a Put Option, or buy, as in a Call Option. This is accomplished when the customer holding the Position instructs his broker to exercise it.
Expiration Date
The date on which an Option expires. If any option has not been exercised by the expiration date, it becomes worthless, and all of the option holder's rights are no longer valid.
Fed Call
When stocks are bought on margin, 50% of the total price is the minimum due to the brokerage, who will finance the rest of the purchase until it is paid off by the buyer. A sale made at $10,000 has a Fed Call of $5,000, the amount due to the brokerage house by the buyer to finance the sale on margin.
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F
Fill or Kill
A market or limited price order which is to be executed in its entirety as soon as it is represented in the Trading Crowd, and such order, if not executed, is to be treated as canceled.
Fixed Income
A type of security where the payout of principal and interest are promised to the purchaser by the issuer in advance. A bond is a type of fixed income security.
Float
The shares of a particular company available in the market to be bought and sold.
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G
Good 'til Canceled
An order to sell or buy stock that remains active until the order is either completely executed or canceled.
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I
Immediate or Cancel Order
A market or limited price order which is to be executed in whole or in part as soon as such order is represented in the Trading Crowd, and the portion not so executed is to be treated as canceled.
Indexes
Measures of security markets that are created by taking averages of prices of selected securities. Example: Dow Jones Industrial Average. Narrow-based indexes are made up of stocks in one sector or industry within the economy, while broad-based indexes cover a far larger range of companies.
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J
Joint Tenants with Rights of Survivorship
An account set up where two or more holders own the account. Under this type of account, upon the the death of one of the holders, ownership of the remaining account assets passes over to the remaining holders.
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L
Limit
A customer-fixed price declaring the lowest price for which they are willing to sell their security or the highest price at which they are willing to buy.
Long
Ownership of a security. Ex: If someone is "long 200 IBM", they own 200 shares of stock in IBM.
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M
Maintenance Requirement
The minimum equity required to maintain one or more margin positions. Generally, the maintenance requirement is 30% of the market value of the securities (subject to certain minimums). If the equity in the margin account falls below the maintenance requirement, a margin maintenance call is issued.
Margin Account
An account with a brokerage that allows customers to buy securities with money that they borrow from the broker. These types of accounts are governed by Regulation T of the Federal Reserve Board, the New York Stock Exchange, the National Association of Securities Dealers and by the rules of the brokerage house the customer has an account with. A margin agreement must be signed in order for a margin account to be established.
Margin Call
A demand by a broker/dealer that a customer deposit enough money or securities to bring a margin account up to the initial margin or maintenance margin requirements. If a customer fails to respond, securities in the account may be sold. Most margin agreements do not require broker/dealers to issue a margin call before liquidating securities.
Mark
The last trade price of an issue. If the last trade is outside of the current Ask and Bid, the mark is either the bid or the offer, whichever is closer in price to the last trade.
Market Order
An order to sell or buy a specific amount of a Security at the best price available in the market when the order is received.
Money Market
Debt instrument securities market for short-term securities.
Money Market Fund
A mutual fund type that has a net asset value that is almost always $1. Expected income from this type of fund is safe, but low.
Mutual Fund
A fund operated by an Investment Company that raises money from a shareholder and invests it in stocks, bonds, options, futures, currencies, or money market securities. These funds offer investors the advantages of diversification and professional management.
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N
NASDAQ
NASDAQ stands for the National Association of Securities Dealers Automated Quotations. The NASDAQ computer system is the link allowing OTC dealers to trade with each other.
National Market Securities
It consists of over 3,000 companies that have met the requirements to be listed on the NASDAQ Stock Market. They must agree to certain governing standards, have significant net assets and/or income, and a public Float of at least 500,000 shares. In addition, each company must have at least 400,000 shareholders and the price per share must be at least $5.
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O
Odd lot
Transaction in quantities lower than 100 shares.
On Opening Order
A market or limited price order which is to be executed on the opening trade of the stock on the Exchange, and any such order or portion thereof not so executed is to be treated as canceled.
Option
An instrument that gives the owner the right to buy or sell a specified number of shares of a specified stock at a specified price within a specified period of time.
OTC
Over-the-Counter Market. A networked group of stock dealers that trade stock and bond securities that are not listed on an actual exchange. They are networked together to trade through NASDAQ.
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P
Penny Stocks
Term that generally refers to low-priced speculative securities, largely traded on the NASD's OTC Bulletin Board or in the "Pink Sheets."
Positions
The amount of a particular security owned by you.
Put option
Stock option that gives the holder the right to sell a specific stock at a given price.
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R
Round lot
Stock that is sold in a quantity of 100 shares.
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S
Securities
An instrument that signifies an ownership or debt position in a corporation.
Selling Long
Selling Stock that is owned by the person selling. Stock can be sold when it is not owned by Selling Short.
Selling Short
Selling Stock that is not owned by the holder. This stock is borrowed, and must eventually be paid back by the holder selling short. (SpeedTrade does not allow this.)
Settlement
Settlement occurs after a trading deal has been made. This process transfers the traded stock to the buyer from the seller and also works to transfer the exchange of monies involved in the transaction between the parties.
Short Sales
A short sale is generally a sale of a security that the seller does not own. This stock is borrowed, and must eventually be paid back by the seller. You may not use SpeedTrade to effect short sales.
Stock
Equity in a company.
Stock Exchanges
The places where securities are actually traded. Examples: New York Stock Exchange (NYSE), Pacific Exchange (PCX).
Stop Limit Order
A stop limit order to buy becomes a limit order executable at the limit price, or at a better price, if obtainable, when a transaction in the security occurs at or above the stop price after the order is represented in the Trading Crowd. A stop limit order to sell becomes a limit order executable at the limit price or at a better price, if obtainable, when a transaction in the security occurs at or below the stop price after the order is represented in the Trading Crowd.
Stop Order
A stop order to buy becomes a market order when a transaction in the security occurs at or above the stop price after the order is represented in the Trading Crowd. A stop order to sell becomes a market order when a transaction in the security occurs at or below the stop price after the order is represented in the Trading Crowd.
Symbol
The way a certain Security is referenced in the market. Ex: International Business Machines trades under the symbol IBM. Stock in the Toys R Us Inc. trades under the symbol TOY.
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U
Uptick
A transaction that is executed at a higher price than the preceding transaction in the same security. Selling Short may only be done on upticks.
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Y
Yield
Associated with overall income, yield refers to the return from an investment.
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