Options And Futures FAQs

  1. What is the difference between open-market and closed-market transactions?

  2. How do I receive sponsorship from a member firm in order to write a Series 7 exam?

  3. How are stock warrants different from stock options?

  4. What is market capitulation?

  5. I have a short period of time (1 year or less) during which I will have money to invest. What are my investment options?

  6. I make over $100,000/yr and my adjusted gross income precludes standard IRA contributions. My contributions to my 401(k) plan at work are limited to about $7,000/yr. It seems I'm being penalized for my income. Are there other retirement savings options av

  7. How do restricted stocks, treasury stocks and stock appreciation rights benefit employees?

  8. Why can't I have fixed rollover costs in forex?

  9. Why are corporations so concerned about their stock price?

  10. I've noticed executives buy a lot of stock below market value, and then they sell it for a large gain. How can they do this?

  11. How does pyramiding work?

  12. What does "in street name" mean, and why are securities held this way?

  13. Are we in a bull market or a bear market?

  14. What's the difference between absolute P/E ratio and relative P/E ratio?

  15. If an IRA owner dies after starting required minimum distributions (RMD) but the spouse is under 70.5, can the spouse roll over the IRA into his/her own IRA, and stop RMDs until age 70.5?

  16. What are the disadvantages of using net present value as an investment criterion?

  17. Are eurodollars related to the currency called the euro?

  18. At what point in the ordering process does a broker charge commission?

  19. Where does the name "Wall Street" come from?

  20. How does somebody make money short selling?

  21. Does the seller (the writer) of an option determine the details of the option contract?

  22. How can I hedge against rising diesel prices?

  23. How can I find out which stocks also trade as options?

  24. What risks do organizations face when engaging in international finance activities?

  25. How does the ISIN numbering system work?

  26. What is the difference between Series 9/10 and Series 24 qualification exams?

  27. What does "guns and butter" refer to?

  28. What is a Bermuda swaption?

  29. What's the difference between a mutual fund and a hedge fund?

  30. Is it important to check the professional history of my investment advisor?

  31. What do all of the letters in a stock option ticker symbol mean?

  32. I want to invest in equities, but I don't have much money. Is there a minimum number of shares I must buy?

  33. When does one sell a put option, and when does one sell a call option?

  34. What methods can be used to fund a forex account?

  35. Can I roll my 403(b) and 457 into other low-cost venders when I change jobs?

  36. Is it possible to take the Series 7 exam without being sponsored?

  37. I'm a teacher. Which is better for me, a 401(k) or 403(b)? What is the difference? From whom do I get these plans?

  38. My company is the trustee of our 401k plan (which has 112 participants). What are the pros and cons of having the company instead of the plan provider/vendor as the trustee?

  39. What's the difference between a straddle and a strangle?

  40. Should I buy options that are in the money or out of the money?

  41. How do you tell whether an option is American or European style?

  42. Can an option have a negative strike price?

  43. How many attempts at the Series 7 exam are permitted?

  44. I have a KSOP through my employer that I've invested 100% in company stock. I am now concerned that I'm not diversified and would like to move out of company stock and into mutual funds. Is this allowed with the funds I've contributed to the account?

  45. What kinds of investments are allowed in a qualified retirement plan, and what kinds are forbidden?

  46. I converted my former IRA to a Roth for tax purposes in 1998, so even though the tax was paid over four years, am I correct to assume that this is now mine to withdraw, if I like, at no penalty? I am 60 years old.

  47. Do hedge funds and mutual funds invest in commodities in high inflation environments?

  48. How do I measure option liquidity?

  49. How can I invest in gold?

  50. How do speculators profit from options?

  51. Do I need to take the Series 6 examination after I have already successfully completed the Series 7?

  52. How do I register for the CFA program for the first time?

  53. How can I buy oil as an investment?

  54. When you buy a stock in a company, does it necessarily mean that one of the shareholders is selling it to you?

  55. Can I roll over a profit-sharing plan to an SEP IRA account without suffering any tax penalties and liquidation of current positions held in this account?

  56. Which option is better on a mutual fund: a growth option or a dividend reinvestment option?

  57. Can I make money using put options when prices are going up?

  58. What is the difference between forward and futures contracts?

  59. What does it mean when a bond has a put option?

  60. I am not a resident of the United States, but would like to be qualified as a registered representative in the U.S. Is it still possible for me to write the Series 7 exam?

  61. What are the oldest mutual funds, by date of inception?

  62. As a temporary resident of the US, can I withdraw funds from my Traditional IRA without penalty when I leave the country?

  63. How do I go about opening up a Roth IRA?

  64. What is the difference between options and futures?

  65. My brokerage firm won't allow naked option positions. What does this mean?

  66. What is an evergreen provision and how does it affect shareholders?

  67. Why do futures' prices converge upon spot prices during the delivery month?

  68. Why do options with the same underlying stock and strike prices trade for different amounts?

  69. I overcontributed to my 401(k). What are my options?

  70. I own options on a stock, and it's just announced a split. What happens to my options?

  71. Is technical analysis used only to analyze stocks?

  72. What does the term "stock-for-stock" mean?

  73. What is the difference between hedging and speculation?

  74. How do you calculate the cost basis for a mutual fund over an extended time period?

  75. What will happen to my SEP IRA if I leave my current employer?

  76. How do I use a "basket" option?

  77. Why should I invest?

  78. I own some stock warrants. How do I exercise them?

  79. Why would a person choose a mutual fund over an individual stock?

  80. What is dilutive stock?

  81. What is the put-call ratio and why should I pay attention to it?

  82. How are futures used to hedge a position?

  83. What happens to my call options if the underlying company is bought out?

  84. What is hedging as it relates to forex trading?

  85. What was "Operation Wooden Nickel"?

  86. What's the difference between a golden handshake and a golden parachute?

  87. How do I "vest" something?

  88. What are goldbrick shares?

  89. What is Ginzy trading?

  90. What does it mean to book the basis?

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