Series65 MOD 18 Trading Markets

Card Set Information

Author:
Series65ForFab
ID:
292457
Filename:
Series65 MOD 18 Trading Markets
Updated:
2015-01-12 23:51:23
Tags:
Series65
Folders:

Description:
Trading Markets
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user Series65ForFab on FreezingBlue Flashcards. What would you like to do?


  1. All securities trading on the national exchanges, such as the NYSE, are called:
    LISTED SECURITIES, because the companies that issue them are "listed" on the exchange
  2. On the floor of the Exchange, a Specialist may act as ________ or ________
    Agent   Principal
  3. For Floor Brokers Two-Dollar Brokers are considered ___________
    Freelance
  4. For Floor Brokers Commission Brokers are employed by ________
    Firm
  5. On equity (stock) exchanges, the trading is always centered around a:
    SPECIALIST
  6. On the options exchanges, the trading is centered around an:
    ORDER BOOK OFFICIAL, or OBO
  7. The four OTC markets are:
    The primary market; The secondary market for unlisted securities, The third market, The fourth market
  8. The PRIMARY MARKET is for the issuance of:
    new securities
  9. All securities sold for the first time are called:
    PRIMARY ISSUES
  10. All initial public offerings (IPOs) are brought out in the:
    primary market
  11. The SECONDARY MARKET is referred to as the:
    • OTC Market (This term is used to indicate that the securities are being traded for at least the second time)
    • Exchange Markets
  12. Define NASDAQ
    • An electronic Quoting system
    • 3 Levels of Service
  13. Define the OTC Markets (NASDAQ)
    • is decentralized
    • Market Makers negotiate sales not auctions
  14. THIRD MARKET transactions are trades in:
    Listed securities (exchange-traded stock) that are executed in the OTC market rather than on the exchange.
  15. The FOURTH MARKET of the OTC consists of direct trading between:
    Large institutions without the use of a B/D (e.g., insurance companies trading with mutual funds).
  16. Market makers are the broker/dealers who:
    offer to buy or sell securities in the OTC market.
  17. When a B/D acts as a Market Maker, it:
    buys stock from one investor at the bid price and sells to another at the ask price.
  18. The difference between the bid price and the ask price is called the:
    SPREAD
  19. Name 3 Details of Market Orders
    • Guaranteed Execution
    • Best Available Price
    • No Guaranteed Price
  20. A SELL LIMIT ORDER is _______ Current Price
    Above
  21. A Buy LIMIT ORDER is _______ Current Price
    Below
  22. Define LIMIT ORDER
    • A Real Order waiting to execute at THAT price or better
    •     -Guaranteed Price, IF Executed
    •     -Execution is NOT Guaranteed
  23. Define the Process of a STOP ORDER
    • 2 steps
    • - Activation Price or Trigger Price
    • - Once "Activated", Order becomes a Market Order
  24. Define a STOP ORDER
    • a TRIGGER Waiting to activate an Order at that Price or Worse
    •     -To Protect Profit
    •     -To Limit Loss (Stop Loss)

  25. A SELL STOP ORDER is _______ Current Price
    Below
  26. Name Both ORDERS Above the Market
    • Sell Limits
    • Buy Stops
  27. Name both ORDERS placed Below the Market
    • Buy Limits
    • Sell Stops
  28. A BUY STOP ORDER is _______ Current Price
    Above
  29. BUY   STOP
    SELL  LIMIT
               ⇐     Market Price
    BUY   LIMIT
    SELL  STOP
  30. Quotes by a market maker are always:
    for lots of 100 shares (even lot)
  31. 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
  32. 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
  33. 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.
  34. 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.
  35. 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.
  36. 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.
  37. 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.
  38. 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.
  39. B/D firms are responsible for reviewing all GTC orders every:
    six months
  40. All LISTED STOCK is:
    Traded on an EXCHANGE and meet Exchange Listing Requirements
  41. When B/D Buys into or Sell out of it's own Account (as Principal)they are considered:
    Dealers
  42. When B/D match Buyers and Sellers (as Agency) they are considered:
    BROKERS
  43. ALL UNLISTED STOCKS are traded in the:
    • OTC
    • If Qualifications are met, NASDAQ
  44. Name the 2 types of Accounts used for Trading:
    • Cash Accounts
    • Margin Accounts
  45. A SPECIAL CASH ACCOUNT is also referred to a:
    • A SPECIAL ACCOUNT
    • but is most commonly referred to as a CASH ACCOUNT.
  46. How are MARKET MAKERS compensated?
    Mark-Ups or Bid/Ask Spread
  47. 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.
  48. Long positions are taken when an investor believes the market in a particular security, or in securities in general, will:
    rise because of demand
  49. In a short sale, the securities sold are______from the broker/dealer (B/D).
    • borrowed
    • Therefore, the customer is obligated to repurchase these securities in the future to replace borrowed securities.
  50. Short positions are taken when an investor believes:
    the market in a particular security, or in securities in general, will fall.
  51. Options (can/cannot) be bought on margin
    • Cannot
    • An investor who purchases options must make full payment for the options

What would you like to do?

Home > Flashcards > Print Preview