Unit 16: Types of Orders and Margin Flashcards
Buy Stop
buy above the current market price
Buy Limit
buy below the market price
Sell Limit
sell above the market price
Sell Stop
sell below the market price
Slob orders
sell limit, buy stop
Bliss orders
sell stop, buy limit
What happens to resting orders in the event of a stock split…
all orders are cancelled
On which date are orders reduced?
Ex-date
Orders must be approved by a supervisor promptly…
after execution
Orders received outside of market hours will be marked with the…
date received
Tender Offers (take over) period:
20 business days
Margin agreement includes:
Hypothecation agreement
Credit agreement
Loan consent agreement
Margin disclosure statement provided when?
At account opening
Annually
Who determines if securities can by bought on margin?
Federal Reserve Board
Rules that determine the required margin deposit:
Reg T: 50%
or (greater)
FINRA: $2,000
When does Reg T require payment?
T+4
Free-riding
when a client buys securities and then sells a order before settlement to avoid payment for the purchase.
Customer’s Equity =
Long market value - debt register
Debt Register =
LMV x 50%
Reg T =
50% of LMV
FINRA =
25% of LMV
When equity is < Reg T, the account is…
restricted (no action)
When equity < FINRA min, the account receives:
maintenance margin call (action required)
Market value at maintenance =
debt register / 75%
