The American Stock Exchange (AMEX) used to be a larger competitor of the New York Stock Exchange (NYSE) until acquired by NYSE Euronext in 2008. Smaller companies tend to list on the AMEX when they cannot meet the NYSE’s strict listing and reporting requirements.  Today, the NYSE, NYSE MKT, and NYSE Amex Options are owned by the Intercontinental Exchange (ICE).

OTC and Pink Sheets are securities that do not trade on the Nasdaq or NYSE. They are usually higher risk, low liquidity companies that have failed to meet listing requirements. Both are considered unlisted securities and are traded through an interdealer network. OTC is required to register with the Securities and Exchange Commission and FINRA however, Pink Sheets do not require registration and do not always have to file regular reports.

Range refers to the difference between a stock's low and high price for a particular trading period.  A Range order (generally known as a Stop-Limit order) is an order to buy or sell at a specified limit price or better when the given stop price is reached by the market price.

A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate, governmental or municipal). ... Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer.

Candlestick charts originated in Japan over 100 years before the West developed the bar and point-and-figure charts.  A candlestick chart is a style of financial chart used to describe price movements of a security, derivative, or currency. Each "candlestick" typically shows one day, thus a one-month chart may show the 20 trading days as 20 candlesticks.

Inflation is the rate at which the value of a currency is falling and consequently the general level of prices for goods and services is rising.

The S&P 500 is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the major equity indices. The S&P is a float-weighted index, meaning company market capitalizations are adjusted by the number of shares available for public trading

A bear market is when the market experiences prolonged price declines. It typically describes a condition in which equity prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment. You can make profit in a bear market by shorting stocks that you think will decline in price.

A diversified portfolio has a mix of asset types and investment vehicles in an attempt to try to limit exposure to any single type of asset. This is a risk management strategy that mixes a wide variety of investments within a portfolio. Diversifying your portfolio can decrease your risk since these assets react differently to economic events.

This is the process of analyzing a company's intrinsic (real) value by examining related economic and financial factors. When performing fundamental analysis, you will be examining the state of the economy, the sector of the business, and the financial statements published by the company.

The ultimate goal is to arrive at a number (fair value) that an investor can compare with a security's current price to see whether the security is undervalued or overvalued.

 

Take away: If the fair market value is higher than the market price, the stock is deemed to be undervalued and a buy recommendation is given.

Time and Sales is a detailed list of trading activity for a specific security. Prior to the modern, electronic market, time and sales were printed out on the “ticker tape”. Time and sales are a real-time display of the stock’s price, volume, the exchange the security is traded on, date and time and direction the stock is moving for each trade.  

Level 2 is a term for market data which includes the bid and ask prices for a security. It shows you various orders on the order book including the National Best Bid/Offer (NBBO). Level 2 also shows you the cumulative size of each bid/offer at each price increment. When orders are placed, they go into the Level 2. The quote will show the number of shares wanted or offered at specific prices.

Other information that can be found in the Level 2 is the amount the stock is up or down on the day as well as the percentage the stock moved for the day. The highs and lows of a stock, the total daily volume and VWAP can also be found on the Level 2.

Short selling is an investment or trading strategy that speculates on the decline in a stock or other securities price. It is an advanced strategy that should only be undertaken by experienced traders and investors. Short sellers are betting that the stock they sell will drop in price. If the stock does drop after selling, the short seller buys it back at a lower price and returns it to the lender. The difference between the sell price and the buy price is the profit.

A pattern day trader (PDT) is a regulatory designation for those traders or investors that execute four or more day trades during five business days’ time using a margin account. FINRA has established a PDT rule that requires that pattern day traders have a minimum of $25,000 in their brokerage accounts in a combination of cash and certain securities as a way of reducing risk. If the cash equity in the account drops below this $25,000 threshold, the pattern day trader can no longer complete any day trades until the account is back up above that point. This is known as the Pattern Day Trader Rule or the PDT Rule.

Stop-limit orders are similar to stop-loss orders, but as their name states, there is a limit on the price at which they will execute. There are then two prices specified in a stop-limit order: the stop price, which will convert the order to a sell order, and the limit price. Instead of the order becoming a market order to sell, the sell order becomes a limit order that will only execute at the limit price or better.

A market order will guarantee an execution of the order but does not guarantee the execution price. At times, it will not be surprising to get an execution price that is different from the market (current bid- current ask), especially if it is a fast market for that particular stock.

A limit order will guarantee an execution price or better, but it does not guarantee the execution of the order. For example: If you place an order to buy 200 shares of XYZ at $5.00 limit for the day, your order will not be executed until the stock trades at $5.00 or lower. Or If you place an order to sell 200 shares of XYZ at $5.00 limit for the day, your order will not be executed until the stock trades at $5.00 or higher.

Margin is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor's account and the loan amount from the broker. Buying on margin is the act of borrowing money to buy securities. The practice includes buying an asset where the buyer pays only a percentage of the asset's value and borrows the rest from the bank or broker. The
broker acts as a lender and the securities in the investor's account act as collateral.

Listed below are 3 options in which you can deposit funds into a brokerage account.  

1. Wire transfers- Funds are moved from one bank to another within one business day and the funds can even be available for use on the same day received.   Fees are paid to the bank to process the transfer, international transfers can cost more than a transfer within the US and can take extra day or two to be received.  

 

2. ACH Transactions- Banks and clearing houses process transactions in batches and typically take two to three business days to be completed.  ACH transactions  may incur a small fee to complete the transaction.

 

3. Money Transfer Services-  Money Transfer Services are not wire transfers, but do provide you with an electronic way to send funds.  Money Transfer Services transfers funds to an associated bank which in return transfers the funds to the beneficiary.  It can take anywhere from two to seven days to completed the transaction.  Some common money transfer services are:  TransferWise.com, CurrencyCloud.com and Revolut.com.

 

  Here’s how the three options stack up:

	Wire Transfers	ACH Transfers	Money Transfer Services
Speed	Same day	1-2 business days	2-7 business days
Availability	Most banks and credit unions, but sometimes only for business accounts	Most banks and credit unions	Over 1,400 banks and credit unions
International Transfers	Yes	Yes	Yes

 

 

An easy way to think about SMA is, it represents a line of credit. It's an investment account where excess margin that's generated from a client's margin account is deposited; this has the effect of increasing the Buying Power for a client. Let's say that a stock in a client's margin account appreciates in value and creates excess margin. If the excess is held in the account and that position creates a capital loss later on, the client could lose their gain entirely. The SMA balance will increase with cash deposits, hold interest and dividend payments from long positions and the proceeds from closing out securities positions. You can also use funds in your SMA to purchase more securities.

A "Range Order" lets the trader enter two orders at once. If long a stock, the range order would entail a Sell Stop order below the market (end the pain) and a Sell order (enjoy the gain) above the market. If short a stock, the range order would entail a Buy Stop order above the market (end the pain) and a Buy order (enjoy the gain) below the market.

In a nutshell, the Federal Reserve Board created this rule to protect investors against amplified loss. Its goal was to regulate Cash accounts and the amount of credit brokerages can lend to investors for the purchase of securities. Currently, investors may borrow up to 50% of the purchase price of securities held overnight while the remainder must be paid for with cash.

For traders and investors, your margin account balance has to stay above a certain level known as a maintenance margin. If your account dips below this level, you will get a margin call, which means that your broker will be annoying you with e-mails and phone calls to bring your account up to or above the maintenance margin level.

Very simple. A company is considered a publicly traded company if it has raised money by selling its own stock to the general public in the form of an initial public offering (IPO). Once its' stock is sold to the general public, it can be resold infinitely from one investor to another. For this reason, stock exchanges were created to facilitate this process of continuous buying and selling.

As the name implies, a brokerage firm can act as both broker and dealer. If your broker decides to trade for you, then he is a broker. If your broker trades for itself, then it is a dealer. Easy Right!

Bull and the Bear are terms used to refer to investors perspective outlook of the market. A bullish outlook is an outlook that is optimistic (stock prices rising), while a bearish outlook means pessimistic (stock prices dropping). A bullish market refers to a scenario where the economy is experiencing growth, typically defined as a time period where prices are steadily increasing. Being bullish means you are optimistic that prices will go higher from where they currently are, while being bearish is the opposite; you think prices will trade lower from where they currently are. Bullish traders will look to take long positions by either buying stocks, call options or any other financial instrument that will appreciate as prices go up. Bearish traders are looking to take short positions where they will profit if the market or stock goes down from its current price. An old Wall Street saying that should be remembered is "Bulls make money, Bears make money, but Pigs get slaughtered".

Assetpromarketing offers risk tools which enables a daily loss limit to your trading account. This tool can prevent you from making you from breaking your trading rules and by pass your daily losses.

They are always mentioned in the business news. An exchange traded fund (ETF) is a basket of securities that can be traded throughout the day like a regular common stock. Often times, they are used to track certain industries and/or sectors. For example, a technology ETF would be comprised of different technology stocks inside the fund and is best used to track the technology sector. Why would anyone buy a technology ETF or any type of ETF? A person can be lazy and doesn't want to do the research on individual stocks. Also, it is more cost effective to buy a single ETF comprised of 10 different technology stocks, than to buy them individually.

One of the biggest problems in Day Trading is the inability to know when to take your losses and get out of a position. When someone shorts a stock and is looking for a profit of $1-2 you must also have a reasonable expectation on what you are willing to lose. To many times I see clients let their short positions ride well beyond where they should have gotten out. One way to avoid blowing up your account with a bad position is to use the Assetpromarketing range orders. By doing this you can set up your profit price as well as your loss limits and avoid that one trade that blows up your account.