What Does Buying on Margin Mean? Margin trading, or buying on margin, means offering collateral, usually with your broker, to borrow funds to purchase securities. In stocks, this can also mean purchasing on margin by using a portion of open trade profits on positions in your portfolio to purchase additional stocks. This practice allows investors…
What is a Restricted List? A Restricted List is a list of securities that a bank’s employees are prohibited from buying or selling, either themselves or via any other person or third party. When are Stocks Placed on a Restricted List? Stocks of an issuer are placed on the Restricted Trading List when either: A…
Long and Short Positions In the trading of assets, an investor can take two types of positions: long and short. An investor can either buy an asset (going long) or sell it (going short). Long and short positions are further complicated by the two types of options: the call and put. An investor may enter…
Stock Investment Strategies There are a number of different ways to approach stock investing, but nearly all of them fall under one of three basic styles: value investing, growth investing, or index investing. These stock investment strategies follow the mindset of an investor and the strategy they utilize to invest is affected by a number…
What is an Exchange-Traded Fund (ETF)? An Exchange-Traded Fund (ETF) is an investment fund that holds a diversified portfolio of assets, including stocks, commodities, bonds, and foreign currencies. An ETF is traded like a stock throughout the trading day at fluctuating prices. They often track indexes, such as the Nasdaq, the S&P 500, the Dow Jones Industrial Average,…
What is Fixed-Income Trading? Fixed-income trading is the process of trading fixed-income securities over-the-counter (OTC). The fixed-income market offers low transaction costs, a competitive market structure, and a large, diverse collection of market participants. The fixed-income securities market is dominated by institutional investors. What is a Fixed-Income Security? A fixed-income security, or debt security, is…
What are Mutual Funds? Mutual Funds are pools of money collected from many investors for the purpose of investing in stocks, bonds, or other securities. Mutual funds are owned by a group of investors and managed by professionals. In other words, a mutual fund is a collection of securities owned by a group of investors…
What is Technical Analysis? Technical analysis is a tool, or method, used to predict the probable future price movement of a security – such as a stock or currency pair – based on market data. The theory behind the validity of technical analysis is the notion that the collective actions – buying and selling –…
What is Trade Order Timing? Trade order timing allows investors to set the amount of time a trade order is good for. The different types of trade order timing each have different advantages and disadvantages that play along with the different strategies an investor may have or wish to use. The following are the most…
Head and Shoulders Pattern Traders and analysts constantly study trends and patterns when watching the market in hopes of detecting the next most probable price movement. Spotting and correctly identifying patterns and understanding their significance is vital to successful trading. The head and shoulders pattern is important because of its longstanding history of reliability among market…
