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Series 7 > Trading Markets > Flashcards

Trading Markets Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Two main trading markets

A

Primary Market and Secondary Market

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2
Q

submarkets of the secondary market

A

First Market, second market, third market, 4th market

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3
Q

What is the first market?

A

Trading of exchange securities listed on the floor of the stock exchange. NYSE and AMEX.

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4
Q

Regional Stock Exchanges

A

Chicago (MIdwest), Pacific (ARCA), Philadelphia, Boston, Cincinnati

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5
Q

Daily Volume of Chicago stock exchange

A

70,000,000

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6
Q

Daily volume of pacific (arca) stock exchange

A

20,000,000

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7
Q

Daily volume of Philadelphia stock exchange

A

10,000,000

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8
Q

Daily volume of Boston stock exchange

A

20,000,000

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9
Q

Daily volume of Cincinnati stock exchange

A

20,000,000

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10
Q

CQS

A

Consolidated Quotations Service. Used to promote competition among markets centers for trading of NYSE listed and AMEX listed issues.

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11
Q

UTP

A

Unlisted Trading Privileges. NASDAQ stock market “floor” exchange since there isn’t actually a floor.

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12
Q

UQDF

A

UTP quote data feed. provides current price quotes for NASDAQ listed securities.

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13
Q

Largest options exchange is

A

The CBOE, chicago board options exchange

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14
Q

Options trading boards are

A

Chicago Board Options Exchange (CBOE), Philadelphia Stock Exchange (PHLX), American Stock Exchange (AMEX), Pacific Stock Exchange (ARCA OR PSE), International Securities Exchange (ISE)

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15
Q

Bonds trading boards are

A

NYSE (limited trading). Mostly done over the counter.

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16
Q

2nd Market is

A

Where over the counter trading of stocks that are not listed on NYSE, AMEX or NASDAQ occurs. Came about with the invention of the telephone (no physical floor needed).

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17
Q

Over the counter markets for equity securities are

A

OTCBB and Pink OTC markets.

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18
Q

OTCBB

A

Over the counter Bulletin Board. No exchanges actually take place through it. It displays quotes for OTC trades.

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19
Q

Pink OTC Markets

A

Great granddaddy of the OTC market, started in 1913.

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20
Q

MSRB

A

Municipal Securities Rulemaking Board (regulates OTC trading of municipal securities).

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21
Q

Third Market

A

Trading of exchange listed securities which takes place “off the trading floor” through over-the-counter market makers. Many stay open 24 hours.

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22
Q

Do options trade over the counter?

A

No

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23
Q

How is debt normally traded?

A

Over the counter. Corporate, government, and municipal debt.

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24
Q

The primary market trades

A

OTC (over the counter)

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25
Q

Fourth Market

A

Diret trading between institutions that is over the counter.

26
Q

ECN

A

Electronic Communications network-matches buyers with sellers 24 hours a day in the 4th market.

27
Q

Regulation ATS

A

Requires alternative trading systems, including ECNs, to register with the SEC and be regulated as broker-dealers. Any ATS that has average 5% of aggregate volume must be listed.

28
Q

Regulation NMS

A

National Market System Regulation-updates to SEC rules for trading securities on the market.

29
Q

NMS Rule 602

A

Exchanges Must Collect and Display Bids and Offers.

30
Q

NMS Rule 604

A

Exchanges and market makers display customer limit orders publicly.

31
Q

NMS Rule 605

A

Requires that centers prepare, and make available to the public, monthly standardized reports summarizing their order executions.

32
Q

NMS Rule 606

A

Reports to customers on order routing and payment for order flow are required.

33
Q

NMS Rule 607

A

Requires each broker-dealer to notify customer at account opening of its policy regarding payment for order flow as well as policies for determining the routing of customer orders.

34
Q

NMS Rule 611

A

All trading platforms must update their trades through the NBBO (National best bid offer) to ensure that “trade throughs” don’t happen. Trade throughs occur when trades are made at lower than market price.

35
Q

NMS Rule 610

A

Requires quoting market centers and quoting market participants to offer automatic execution of orders, and they cannot discriminate by offering members faster automatic execution than non-members.

36
Q

NMS Rule 612

A

No sub-penny pricing on NMS stocks trading at $1.00 or more is allowed.Minimum above $1.00 is $.01. Minimum below $1.00 is $.0001.

37
Q

SHO regulation

A

Short sale regulation. requires that every order ticket to sell be marked either as a “long sale” or “short sale.”

38
Q

GTC

A

Good Til cancelled. An order for a short sale can be entered as “good til cancelled.”

39
Q

AON

A

All or none. Either the entire order is filled or the order is not executed.

40
Q

FOK

A

Fill or Kill-either the entire order is filled on the first try or the order is canceled.

41
Q

IOC

A

Immediate or Cancel-Either part or all of the order is filled on the first try and the balanced is cancelled.

42
Q

Either/Or

A

Specifies two possible trades. If one is filled, the other is cancelled.

43
Q

Not held

A

Trader is free to hold back and determine the best time and price fo execution during that day.

44
Q

Discretionary

A

The registered representative places an order where the customer has not specified the security size of the order.

45
Q

DNR

A

Do not reduce-do not reduce the order after ex date.

46
Q

At the opening or at the close

A

An order placed at the opening is to be filled at the opening price or cancelled. An order placed at the close is to be filled at the closing price or cacelled.

47
Q

Security Name

A

Ticket specifies name of the corporate security to be traded. If the trade were in preferred stock, the ticket would say “pfd”. If the trade was a warrant, the ticket would say “wts.”

48
Q

Execution Price

A

Can be market to fill at market price or fill at a specific price.

49
Q

Limit Order

A

A limit given on the price to buy or sell a security. A limit order to buy must be filled at price or lower. A limit order to sell must be filled at that price or higher.

50
Q

Stop order; stop-limit order

A

Orders may be placed to stop a loss.

51
Q

Manager Approval

A

Space for the manager’s initialing of the order.

52
Q

Types of orders

A

Market order, limit order, stop order, stop limit order.

53
Q

Market Order

A

An order that does not carry over to the next day. They can be held or not held.

54
Q

Limit order

A

A limit order specifies a price at which to buy or sell a stock.

55
Q

Sell stop order

A

Used to limit losses on long stock positions in falling markets. Will only be enacted if the price on the stop order is reached in the market.

56
Q

Buy stop order

A

Used to limit losses on a short sale position in a rising market.

57
Q

Limit order

A

If a simple stop order is triggered, it is filled on the next trade. Adding a limit order makes sure the stock is sold for no less or more than a specified value beyond the stop order.

58
Q

oslobs

A

Rising market. open sell limits, open buy stops.

59
Q

OBLOSS

A

falling market. open buy limits, open stell stops.

60
Q

Resistance Level

A

Level at which stock is considered high and has resistance to people buy. Theory is that all sellers have been cleared out at this level. Breakout of this level is bullish.

61
Q

Support level

A

Level at which stock is considered low and has resistance to people seling it. Theory is that all buyers have been cleared out at this level. breakout of this level is bearish.

62
Q

DMM

A

NYSE designated market maker (or specialist)

Series 7 (3 decks)

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