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18 Cards in this Set

  • Front
  • Back
uptick rule
- also called plus tick rule
- no short sale may be executed at a price below the price of the last sale
- short sales can only be taken on upticks
- zero tick - stays same
- down tick - goes down
exchange market
- auction market
- NYSE etc.
- trades listed securities
- must have a rep on the floor and have a seat at the exchange
- best price wins
- trading symbols of 3 letters or less identifies as listed security
- trades unlisted securities
- secondary market
- traded between BDs of their own inventory or their clients
- negotiated market
third market
- nasdaq intermarket
- listed securities traded OTC
fourth market
- blocks of stock sold - listed and unlisted
- institutions trade b/w themselves through electronic communication networks ECN
role of BD
- as broker - agent - orders for clients - charges commission - not a market maker
- as dealer - principal - dealing for its own account - charges markup or markdown - market maker
- bd must disclose its role to its clients
exchange members
- transact business on the floor
- floor broker - execute order for firm
- 2 dollar broker - given overflow of orders from teh broker
- registered floor trades - trade for own accounts
- specialist - maintains fair and orderly market - acts as auctioner and BD
Orders - flow of the order on the exchange
- customer to BD to floor broker - to post - to execution report - to super dot (computerized trading and execution system - executes trades within 90 seconds)
specialist awards the trades in teh following order on the exchange
- priority - fifo
- precendence - largest order first
- parity - random drawing
stop orders
- become market orders when elected (triggered)
- executed at the next tick after the trigger
- no fee for stop orders
- buy stop orders or sell stop orders
price restricted orders
- market - executed immediately at MP
- limit - limits the amt paid or received for securities
- stop - becomes market order if the stock reaches or goes throught eh trigger - sell stops in long position and buy stops in short position
- stop limit - entered as a stop order and changed to a limit order if hits trigger
stop limit order
- once it hits trigger it doesnt execute until it hits the limit
- if someone is buying or selling stock and doesn't want it to to too high or low you can put a limit on to how much you will spend
time sensitive orders
- good till cancelled - GTC - valid until executed or canceled - "good for the week" or "good for the month"
- Not held orders - customer doesnt' hold the floor broker to a particular time and price
- fill or kill - no partial executions - fill immediately at price or better
- immediate or cancel orders - partial executions allowed and remainder is cancelled
- all or none - wait until all avalilable - no urgency like the FTK
specialists book
- contains limits, stops, adjustments for dividends or splits, determines quote and size on limits
earnings per share calculation
- CMV divided by PE (price earnings ratio) equals the earnins per share
OTC quotes
- Supermontage
- non-nasdaq - quotes on pinksheets - nominal quotes
- corporate bonds - quoted on yellow sheets
nasd markup policy
- NASD ensures that the investors receive fair treatment by allowing no more than a 5% markup, markdown, or commissions charges
- does not apply to mutual funds, variable annuitie, municipal securities, prospectus offerings, exchange offerings and government securities
- a transaction charge of more than 5% might be allowed if it is reasonable based on the circumstances of the trade
Nasdaq levels
- level 1 - inside quote - reg. reps only access at level 1
- level 2 - actual quotes of all market makers
- level 3 - market makers input - changes to bid and ask price allowed