A regular-way trade is defined as a securities transaction that settles on the trade date plus two business days. For example, if an investor purchases a stock on a Monday, the trade will settle on Wednesday. If the trade had been placed on a Friday, it would settle the following Tuesday. The term “regular way” … Read more
A deal ticket is a record of a transaction between a buyer and a seller, typically generated by the broker. It includes the date, time, price, quantity, and other important details of the trade. Deal tickets are used by brokers to keep track of their trades, and by investors to track their portfolios. What must … Read more
. High risk, high reward: the speculation game. What are high risk markets? High risk markets are those in which the potential for loss is greater than the potential for gain. This can be due to a number of factors, including political instability, currency volatility, and poor economic conditions. In general, high risk markets are … Read more
An opening cross is a term used in trading to describe the process of opening a trade at the same time as another trader. This is done by placing an order to buy or sell at the same time as another order is placed to buy or sell the same security. Opening crosses typically occur … Read more
Definition, How It Works, and Example. What is Clearing? Clearing is the process of matching buy and sell orders for securities or other assets. It is typically done by a central clearing house or an exchange. How Clearing Works When a buyer and seller agree to trade, their trade is sent to the clearing house. … Read more
An equity curve is a graphical representation of the performance of a trading system or investment over time. The equity curve shows the relationship between the account balance and the equity in the account, and can be used to assess the risk-reward profile of the system or investment. The equity curve is calculated by taking … Read more
A “teenie” is a small, newly hatched fish. In the world of trading, teenies are small investors who are just starting out. While the term is most commonly used in the context of the stock market, it can also refer to any other type of investment, such as bonds, commodities, or even cryptocurrency. Teenies are … Read more
When an investor buys a security, the price of the security is known as the purchase price. The current market value of the security is known as the current price. If the current price is higher than the purchase price, the security is said to be “trading at a paper profit.” If the current price … Read more
Gap risk is the potential for a security to move sharply lower (or higher) while a trader is away from their desk. This can happen overnight, or during the weekend, when markets are closed. If a trader is holding a long position and there is a gap down at the open, they may be faced … Read more
A perfect hedge is an investment strategy that seeks to eliminate all risk. A perfect hedge is impossible to achieve in practice, but it is a useful theoretical concept. The idea is to offset any potential losses in one investment by making an equal and opposite investment in another asset. For example, if you are … Read more
