Unit 16: Types of Orders and Margin

Question 1

Buy Stop

Answer 1

buy above the current market price

Question 2

Buy Limit

Answer 2

buy below the market price

Question 3

Sell Limit

Answer 3

sell above the market price

Question 4

Sell Stop

Answer 4

sell below the market price

Question 5

Slob orders

Answer 5

sell limit, buy stop

Question 6

Bliss orders

Answer 6

sell stop, buy limit

Question 7

What happens to resting orders in the event of a stock split…

Answer 7

all orders are cancelled

Question 8

On which date are orders reduced?

Answer 8

Ex-date

Question 9

Orders must be approved by a supervisor promptly…

Answer 9

after execution

Question 10

Orders received outside of market hours will be marked with the…

Answer 10

date received

Question 11

Tender Offers (take over) period:

Answer 11

20 business days

Question 12

Margin agreement includes:

Answer 12

Hypothecation agreement
Credit agreement
Loan consent agreement

Question 13

Margin disclosure statement provided when?

Answer 13

At account opening
Annually

Question 14

Who determines if securities can by bought on margin?

Answer 14

Federal Reserve Board

Question 15

Rules that determine the required margin deposit:

Answer 15

Reg T: 50%
or (greater)
FINRA: $2,000

Question 16

When does Reg T require payment?

Answer 16

T+4

Question 17

Free-riding

Answer 17

when a client buys securities and then sells a order before settlement to avoid payment for the purchase.

Question 18

Customer’s Equity =

Answer 18

Long market value - debt register

Question 19

Debt Register =

Answer 19

LMV x 50%

Question 20

Reg T =

Answer 20

50% of LMV

Question 21

FINRA =

Answer 21

25% of LMV

Question 22

When equity is < Reg T, the account is…

Answer 22

restricted (no action)

Question 23

When equity < FINRA min, the account receives:

Answer 23

maintenance margin call (action required)

Question 24

Market value at maintenance =

Answer 24

debt register / 75%

Question 25

For Short Margins, Reg T and FINRA are

Answer 25

Reg T: 50%
FINRA: 30%

Question 26

Excess equity =

Answer 26

Equity - Reg T

Question 27

The SMA cannot be used to

Answer 27

reduce the debit balance in the account

Question 28

When may a customer may purchase a newly listed company on margin?

Answer 28

30 days after trading on the exchange