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A buy or sell order that's typically executed immediately at the best available price.
Market orders placed outside of trading hours would be filled at the best available price in the next trading session. Preferred shares offer a combination of equity and fixed-income features. Like stocks, preferreds have a share price and represent an ownership stake; like bonds, they can offer a steady stream of income, but in the form of fixed dividends. They're considered income investments, but technically they are equities. Preferred shareholders have a higher claim on the assets and earnings of a company than common shareholders.
Private equity is an alternative investment class that refers to shares or ownership rights of private companies that do not trade on an exchange. Short selling is selling stock that you don't own in order to profit from an anticipated price decline. In essence, you borrow the shares and sell them at the current market price with the hope of buying them back in the future at a lower price.
A stock split is a corporate action that increases the number of outstanding shares. For example, in a 2-for-1 stock split, the number of shares outstanding would double since each share would effectively split into two.
A stock split reduces the price of each share so the overall value of your holdings doesn't change. When selling, a stop order, also commonly known as a stop-loss order, is when you pick the price that will trigger the sell order for your stock.
That trigger is known as the stop price, and it must be below the last traded price. When the stock reaches that point, a market order is created to sell. It's important to note that your stop price won't necessarily be the sell price.
1. Option type: There are two types of options you can can buy or sell: Call: An options contract that gives you the right to buy stock at a set price within a certain time period. Put: An options contract that gives you the right to sell stock at a set price within a certain time period. Glossary · (AKA Definitely-boring-definitions) · Assignment · At-the-money · Back month · Break-even point · Call option · Cash settlement · Closing transaction.
It will be sold at the first available price after the market order is placed. This means that if the stock is falling quickly, you could end up selling at a price lower than your original stop price.
Common stock shareholders typically have the right to vote on certain matters that affect the company, such as company leadership and other key decisions. Volatility is a measure of risk. The higher the volatility, the greater the risk. Beta is one measurement of risk when looking at investments such as stocks.
Investors are responsible for their own investment decisions.
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Know the Lingo: Stock Trading Terms Share this article on Facebook opens new window Tweet this article on Twitter opens new window Share this article on LinkedIn opens new window Share this article on email opens new window. Common stock Most common stock consists of ordinary shares that come with voting rights. Dividend A dividend is a payment a company makes to a shareholder, usually to distribute company profits. Equity derivatives Equity-based options, rights, warrants and equity-linked notes are equity derivatives because their prices will change as the price of the underlying security changes.
Fundamentals Fundamental analysis can provide a better understanding of a company's value, which can help you determine if a company is the right investment choice for you.
Leverage When you borrow money and use that money to buy investments, it's known as margin or leveraged investing. Limit order When you place a limit order, you specify the maximum price you are willing to pay when buying a security or minimum you're willing to accept when selling , along with the number of shares. Liquidity Liquidity describes the degree to which a stock or other asset can be quickly bought or sold in the market. Margin If you choose to invest using margin , you are borrowing money from RBC Direct Investing and using your investments as collateral.
Market capitalization Market capitalization is the total value of a company's shares. Market order A buy or sell order that's typically executed immediately at the best available price. Preferred shares Preferred shares offer a combination of equity and fixed-income features. Private equity Private equity is an alternative investment class that refers to shares or ownership rights of private companies that do not trade on an exchange. Short selling Short selling is selling stock that you don't own in order to profit from an anticipated price decline.
PUT - an option which gives the holder the right to sell shares of stock per each contract at a specific strike price by a set date. When you write a put, for example, you are in effect writing a contract that gives someone else the right to sell their stock to you at a specific price presumably lower than the current price. Buy to Open - either calls or puts or short i. Sell to Open - either calls or puts. The important distinction here is that you've opened or initiated a transaction. If you previously bought calls or puts to open, you would now sell them back to close the position.
Likewise, if you originally sold to open or wrote calls or puts, you would now buy them back to close the position. LONG vs. Long means you purchased the options, and Short means you sold or wrote the options. Long positions get exercised and Short positions get assigned. Long and short in the world of options have nothing to do with in which direction you hope the stock will move. LEG - fancy name for part well, maybe not that fancy, unless you live in a torso-dominant world.
Simply buying a long call or long put is a single leg transaction. Other strategies, such as spreads, are constructed from multiple legs which in turn may consist of any number of combinations of long and short calls and puts at various strike prices and with various expiration dates. These variables all depend upon your specific trade and objective. Instead of setting up all legs of the trade at the same time, for instance, you can choose to leg into them over time as market conditions change in an attempt to gain an additional advantage in the trade a bit risky, of course, since you could just as easily put yourself in a worse spot.
A four-sided option spread that involves a long call and a short put at one strike price in addition to a short call and a long put at another strike price. All option contracts that are in-the-money i. Selling an options contract to exit a long trade is safe because the sale is of an already owned contract. This is the language of options traders — a jargon-riddled dialect of traditional Wall Street-speak. A speculator does not use the futures market in connection with the production, processing, marketing or handling of a product. An assignment requiring the writer of an option to follow through should the option be exercised by the buyer.