S3 3.2 Flashcards
1
Q
Successful speculators must:
A
Know their contracts
have a trading plan
determine their K risk
analyze the market
2
Q
Overbought
A
Much buying pressure without co fundamentals to back it up
3
Q
Oversold
A
Prices decline steeply without a change in co. fundamentals
4
Q
Liquidating market
A
1) Long traders selling their holdings
2) short sellers covering their positions
5
Q
What does increasing volume and falling prices indicate?
A
Short selling
6
Q
What does increasing volume and rising prices indicate?
A
New buying
7
Q
Does futures trading help reduce volatility in cash mkt?
A
Yes
8
Q
What is the problem with markets that do not attract enough speculation?
A
Increased volatility
