Equity trading Flashcards
What is an equity?
A share in ownership of a company
What does equity entitle the owner too?
Payment of dividends and the right to vote at annual general meetings
Whats the difference between public and private and public equity
Public is listed on a stock exchange, private is not listed
Why are some shares not on the market and held by majority shareholders?
To protect against hostile takeovers
Whats the equation for market cap?
Share price x total number of issued shares
What is a stock’s “beta”
The elasticity measure of a stock’s price fluctuation when there is a 1% rise in the broad index of market prices
What is Earnings per share EPS?
most recent annual accounting profits divided by the number of outstanding shares
What is P/E
share price / EPS
What is the role of the broker?
Executing buy and sell orders on behalf of clients
What is the “duty” of a broker?
Buy or sell at the best possible price
What are types of broker?
- Sales and trading
- Retail broker
- Corporate broker
- Prime brokerage
What’s a sales and trading broker?
Execute trades on behalf of clients
What’s a Retail broker
Firm helping retail customers buy and sell equities and other securities and also manage their portfolios
What’s a corporate broker?
A specialist market niche, largely advisory, helping large companies
What is a Prime brokarage?
Providing a range of supporting services to hedge funds (trading execution/cash or securities lending)
