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18 Cards in this Set
- Front
- Back
uptick rule
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- 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 |
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exchange market
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- 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 |
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OTC
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- trades unlisted securities
- secondary market - traded between BDs of their own inventory or their clients - negotiated market |
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third market
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- nasdaq intermarket
- listed securities traded OTC |
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fourth market
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- blocks of stock sold - listed and unlisted
- institutions trade b/w themselves through electronic communication networks ECN |
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role of BD
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- 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 |
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exchange members
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- 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 |
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Orders - flow of the order on the exchange
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- customer to BD to floor broker - to post - to execution report - to super dot (computerized trading and execution system - executes trades within 90 seconds)
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specialist awards the trades in teh following order on the exchange
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- priority - fifo
- precendence - largest order first - parity - random drawing |
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stop orders
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- 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 |
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price restricted orders
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- 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 |
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stop limit order
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- 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 |
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time sensitive orders
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- 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 |
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specialists book
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- contains limits, stops, adjustments for dividends or splits, determines quote and size on limits
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earnings per share calculation
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- CMV divided by PE (price earnings ratio) equals the earnins per share
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OTC quotes
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- NASDAQ
- Supermontage - non-nasdaq - quotes on pinksheets - nominal quotes - corporate bonds - quoted on yellow sheets |
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nasd markup policy
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- 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 |
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Nasdaq levels
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- 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 |