Chapter 3- Securities Transactions and Market Indexes Flashcards
1
Q
Odd-Lot Orders
A
- orders for less than 100 shares of stock
2
Q
Round-Lot Orders
A
-orders for less than 100 shares of stock
3
Q
Market Orders
A
- Buy or sell at best availible price at the time your trade comes up for execution, fastest way to fill order
4
Q
Limit Orders
A
- order to by at or below a specified price or to sell at or above a specified price, if price limits are not met, order is not filled
5
Q
Fill or Kill Order
A
-limit orders whihc is cancled if not filled immediately
6
Q
Day Orders
A
- limit orders that expires at end of the day if not filled
7
Q
Good-Til-Cancled Orders
A
- limit orders that remains in effect for six months unless filled, cancled, or renewed
8
Q
Stop-Loss Orders
A
- typically used to protect investors from stock price declines - suspended order is placed to sell a stock if price reaches or falls below a specified level - orders can be day orders or GTC orders - once activated beomes a market order - can also use to stop orders to buy stocks, such as to limit risk on short sales - more effective than stop limit
9
Q
Stop-Limit Orders
A
-orders to sell stock at or better than specified price - prevents sales at undesireable price - no sale may occur if price continues to decline
10
Q
Reasons to use Market Avg. and Indexes
A
- take temperature of the market - gauge general market conditions - compare your portfolio performance - shows unusual happenings in the market - market cycles and trends - general behavior of stock prices over time
11
Q
Dow Jones Industrial Average
A
- largest market index - most popular average - compromised of 30 high quality, diversified stock - tracks overall market activity - stock makeup can change to better reflect the broader stock market - has changed over the years du to the changing economy
12
Q
Dow Jones Transportation Average
A
- compromised of 20 stocks
13
Q
Dow Jones Utilities Average
A
- compromised of 15 public utility stocks
14
Q
Dow Jones Problems
A
- narrowly base - weighting scheme favors high priced stocks, which makes it more volatile than others - not all companies are industrials - overstates market volatility
15
Q
S & P 500
A
- compromised of 500 stocks from major industry sectors - more broad based and representative of the overall market than DJIA - true index from 1941-1943 - market value weighted- prices are weighted based on the number of shares oustanding - larger firms have a bigger impact
