What Is Naked Short Selling? Naked short selling is a controversial practice in the world of stock trading. It involves selling shares of a stock that the seller does not actually own. In a traditional short sale, an investor borrows shares from a broker and sells them with the expectation … …
What is Insider Trading? Insider trading refers to the buying or selling of a company’s securities by individuals who have access to non-public information about the company. This information can include financial results, upcoming mergers or acquisitions, regulatory decisions, or any other material information that could significantly impact the company’s … …
How Does an Order Book Work? The order book is a crucial tool in stock trading that provides traders with real-time information about the current supply and demand for a particular stock. It displays all the buy and sell orders placed by traders in the market, allowing them to see … …
Definition of Offset in Stock Trading In stock trading, the term “offset” refers to a strategy used by investors to minimize risk or protect profits. It involves taking an opposite position to an existing trade or investment in order to neutralize potential losses or lock in gains. When a trader … …
What Is a Stock Trading Strategy? A stock trading strategy is a set of rules and guidelines that a trader follows to make informed decisions about buying and selling stocks. It is a systematic approach that helps traders navigate the complexities of the stock market and increase their chances of … …
What Is a Trading Halt? A trading halt is a temporary suspension of trading in a particular stock or securities on an exchange. During a trading halt, investors are unable to buy or sell the affected securities. Trading halts are typically implemented by exchanges or regulatory bodies to ensure fair … …
What Is a Stock Split and How It Works: A Detailed Example A stock split is a corporate action that involves dividing the existing shares of a company into multiple shares. This process increases the number of outstanding shares while reducing the price per share. The overall value of the … …
What Is a Minsky Moment? A Minsky Moment refers to a sudden collapse of asset prices following a period of speculative borrowing and lending. It is named after economist Hyman Minsky, who developed the theory that financial crises are inherent in capitalist economies. Causes of a Minsky Moment There are … …
What Are Large Cap Stocks? These companies are typically well-known, have a long history of stable earnings, and are considered leaders in their respective industries. They often have a strong market presence, a wide customer base, and generate substantial revenue and profits. Large cap stocks are generally considered less volatile … …
Unlisted Trading Privileges (UTP) Explained Unlisted Trading Privileges (UTP) is a mechanism that allows certain securities to be traded on exchanges other than the primary listing exchange. This mechanism provides investors with increased access to a wider range of trading venues and liquidity. UTP was introduced by the Securities and … …
Unlisted Security Overview Unlisted securities can take various forms, including stocks, bonds, derivatives, and other investment products. These securities are often issued by smaller companies that do not meet the listing requirements of major stock exchanges or by companies that prefer to maintain privacy and avoid the regulatory obligations associated … …
What is the Opening Bell? The opening bell is a symbolic event that marks the beginning of the trading day on the stock market. It is a tradition that dates back to the early days of stock trading when a physical bell was rung to signal the start of the … …
What is an Offering Circular? An offering circular is a legal document that provides detailed information about a securities offering. It is typically used by companies that want to raise capital by selling securities, such as stocks or bonds, to investors. The offering circular contains important information about the company, … …
What is the Hard-To-Borrow List? The Hard-To-Borrow List is a compilation of securities that are difficult to borrow for short selling purposes. Short selling is a trading strategy where traders sell borrowed shares with the expectation that the price will decline, allowing them to buy back the shares at a … …
What is the Greater Fool Theory? The Greater Fool Theory is an investment concept that suggests that the price of an asset is not determined by its intrinsic value, but rather by the belief that there will always be someone else willing to pay a higher price for it in … …
What is the 130-30 Strategy? The 130-30 strategy is a popular stock trading strategy that combines both long and short positions in a portfolio. It is designed to provide investors with enhanced returns by allowing them to take advantage of both rising and falling stock prices. In a 130-30 strategy, … …
What is the 100% Equities Strategy? The 100% Equities Strategy is a stock trading strategy that involves investing solely in equities or stocks. This means that all of your investment portfolio will be allocated to stocks, without any allocation to other asset classes such as bonds or cash. This strategy … …
Examples of SPACs Special Purpose Acquisition Companies (SPACs) have gained popularity in recent years, with numerous high-profile examples. Here are a few notable examples of successful SPACs: 1. Churchill Capital Corp IV (CCIV) Churchill Capital Corp IV is a SPAC that completed its merger with Lucid Motors, an electric vehicle … …
Advantages of Investing in Small-Cap Stocks Investing in small-cap stocks can offer several advantages for investors looking to diversify their portfolios and potentially achieve higher returns. While small-cap stocks may carry higher risks compared to larger, more established companies, they also present unique opportunities that can be advantageous for investors. … …
Key Differences Between Shares and Stocks Definition of Shares Shares represent the ownership in a specific company. When you buy shares of a company, you are essentially buying a portion of that company. The total number of shares in a company represents the ownership structure and determines the voting rights … …
What are Over-the-Counter Markets? Over-the-Counter (OTC) markets are decentralized financial markets where trading of securities, such as stocks, bonds, and derivatives, takes place directly between two parties without the involvement of a centralized exchange. Unlike traditional exchanges, OTC markets operate through a network of dealers and brokers who facilitate the … …
What is Non-Assessable Stock? Non-assessable stock refers to a type of stock that does not require shareholders to contribute additional funds beyond their initial investment. When a company issues non-assessable stock, it means that shareholders are not liable for any future debts or obligations of the company. This type of … …
Types of Lot Sizes 1. Standard Lot Size The standard lot size is the most common type of lot size in stock and bond trading. It represents a specific quantity of shares or bonds that are being traded. For stocks, the standard lot size is usually 100 shares, while for … …
Definition of High Close In stock trading, a high close refers to a situation where the closing price of a stock is significantly higher than its opening price for a given trading day. This indicates strong buying pressure and bullish sentiment among traders and investors. When a stock experiences a … …
What are Fully Diluted Shares? Fully diluted shares refer to the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, convertible bonds, and warrants, were exercised or converted into common shares. These potential sources of conversion represent the maximum number of … …
What are Dutch Auctions? A Dutch auction is a type of auction in which the price of an item is gradually lowered until a buyer is willing to accept the current price. It is named after the Dutch tulip auctions of the 17th century, where this method was commonly used. … …
What is Dilution in Trading? Dilution in trading refers to the decrease in the ownership percentage of existing shareholders in a company as a result of the issuance of new shares. This can happen when a company decides to raise capital by selling additional shares to investors or when it … …
Benefits of After-Hours Trading After-hours trading refers to the buying and selling of stocks outside of regular market hours, which are typically from 9:30 AM to 4:00 PM Eastern Time. While after-hours trading may not be as active as regular trading hours, it offers several benefits for investors. 1. Extended … …
The Universe of Securities In the world of finance, securities play a crucial role. They are financial instruments that represent ownership or a creditor relationship with an entity. Securities can be classified into various types, including stocks, bonds, options, and derivatives. Securities are traded on stock exchanges, where buyers and … …