FIRM QUOTES are quotes from a market maker or another B/D who is willing to:
do a trade at a certain price, and promises to trade the stock at that price
In Executing, Market orders are:
To be executed as soon as possible at whatever the going market price is, no matter what the price
To be executed at the next round lot trade that occurs on the floor regardless of the price of the next round lot trade
The most commonly used order
BUY LIMIT ORDERS are always entered for prices:
below the present market price.
The order will be executed only when the security falls to the specific limit price set or lower.
SELL LIMIT ORDERS are always entered for prices above the:
present market price.
This enables an investor to sell the securities when they reach a certain high point.
The order will be executed when the market price of the securities rises to the specified price or higher.
A BUY STOP ORDER is always entered at a price that is:
Above the present market.
Once the stop order is activated, it becomes a market order, meaning the security can be bought at any price at which the next trade occurs at the stop price, below the stop price, or above the stop price.
A SELL STOP ORDER is always entered at a price that is:
below the present market.
Once the stop order is activated, it becomes a market order, meaning the securities can be sold at any price at which the next trade occurs at the stop price, below the stop price, or above the stop price.
A BUY STOP-LIMIT ORDER is an order to:
buy stock at a specified price or better (called the STOP-LIMIT PRICE), but only after this given stop price has been reached or passed.
A SELL STOP-LIMIT ORDER is an order to:
sell securities at a specified price or lower (called the STOP-LIMIT PRICE), but only after a given stop price has been reached or passed.
B/D firms are responsible for reviewing all GTC orders every:
All LISTED STOCK is:
Traded on an EXCHANGE and meet Exchange Listing Requirements
When B/D Buys into or Sell out of it's own Account (as Principal)they are considered:
When B/D match Buyers and Sellers (as Agency) they are considered:
ALL UNLISTED STOCKS are traded in the:
If Qualifications are met, NASDAQ
Name the 2 types of Accounts used for Trading:
A SPECIAL CASH ACCOUNT is also referred to a:
A SPECIAL ACCOUNT
but is most commonly referred to as a CASH ACCOUNT.
How are MARKET MAKERS compensated?
Mark-Ups or Bid/Ask Spread
Margin accounts are composed of three parts:
The long position
The short position
The options position
**most often, only 50% of the total value has to be deposited by the purchaser.
Long positions are taken when an investor believes the market in a particular security, or in securities in general, will:
rise because of demand
In a short sale, the securities sold are______from the broker/dealer (B/D).
Therefore, the customer is obligated to repurchase these securities in the future to replace borrowed securities.
Short positions are taken when an investor believes:
the market in a particular security, or in securities in general, will fall.
Options (can/cannot) be bought on margin
An investor who purchases options must make full payment for the options