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Stocks FAQs

  1.

    How do I start using technical analysis?

  2. What is the difference between weighted average shares outstanding and basic weighted average shares?

  3. What does it mean when there is "price action"?

  4. What is a cross hedge?

  5. What is the difference between an options contract and a futures contract?

  6. What is the McGinley Dynamic?

  7. Do stocks that trade with a large daily volume generally have less volatility?

  8. Why is the 1982 AT&T breakup considered one of the most successful spinoffs in history?

  9. Which two companies underwent the biggest corporate merger of the 1990s?

  10. When holding an option through expiration date, are you automatically paid any profits, or do you have to sell the option and pay commissions?

  11. How do I use the Nova/Ursa ratio?

  12. How do I value the shares that I own in a private company?

  13. How do I employ a cash-and-carry trade?

  14. What is the significance of a Schedule 13D?

  15. What is high-frequency trading?

  16. Does the balance sheet always balance?

  17. What is the difference between an acquisition and a takeover?

  18. What does it mean when "N/A" appears for a company's P/E ratio?

  19. What was the first company with a $1 billion market cap?

  20. What is the Coppock curve?

  21. Why would a company do a reverse merger instead of an IPO?

  22. What is the difference between return on equity and return on capital?

  23. What are the penalties for withdrawing from my Traditional IRA less than a year after acquisition?

  24. How do I use a premium put convertible?

  25. What business processes were used to establish the Chevrolet motor company?

  26. What happens to the stock prices of two companies involved in an acquisition?

  27. What does it mean when a stock trades on the Pink Sheets or the OTCBB?

  28. What's the difference between "top-down" and "bottom-up" investing?

  29. What number of shares determines adequate liquidity for a stock?

  30. What is the difference between fundamental and technical analysis?

  31. How are the interest charges calculated on my margin account?

  32. Why are P/E ratios generally higher during times of low inflation?

  33. Where can I find the P/E ratios for the Dow and S&P 500?

  34. What does it mean when a stock symbol has a .PK after it?

  35. What is a penny stock?

  36. Why do option volume quotes differ on different websites?

  37. What do the phrases "sell to open", "buy to close", "buy to open", and "sell to close" mean?

  38. What is a split-adjusted share price?

  39. What are pro forma earnings?

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

  41. What does it mean to use technical divergence in trading?

  42. Is it possible for a company to have a positive cash flow and a negative net income?

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

  44. How do I take qualitative factors into consideration when using fundamental analysis?

  45. What is the difference between options and futures?

  46. How does a pump and dump scam work?

  47. What's the difference between old- and new-economy stocks?

  48. Is technical analysis used only to analyze stocks?

  49. What is the difference between fast and slow stochastics in technical analysis?

  50. What's the difference between a regular option and an exotic option?

  51. Can a stock have a negative price-to-earnings (P/E) ratio?

  52. Is there such a thing as a nano cap or micro cap index?

  53. What is the weighted average of outstanding shares? How is it calculated?

  54. In the forex market, how is the closing price of a currency pair determined?

  55. What is the cheapest, fastest way to research, buy and trade stock?

  56. Can technical analysis be called a self-fulfilling prophecy?

  57. What is Fibonacci retracement, and where do the ratios that are used come from?

  58. What is the pitchfork indicator that I keep hearing about, and how do I use it?

  59. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always a better investment than a stock with a higher one?

  60. Short selling vs. purchasing a put option: how do the payoffs differ?

  61. How can I hedge against rising diesel prices?

  62. I placed a limit order to buy a stock after the market closed, but the stock's price gapped above the entry price and my order never got filled. How can I prevent this from happening?

  63. What technical tools can I use to measure momentum?

  64. What is a staggered board?

  65. What is the difference between a simple moving average and an exponential moving average?

  66. What does the 'FIG' at an investment bank refer to?

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

  68. How do I measure option liquidity?

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

  70. What is the difference between a merger and a takeover?

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

  72. What do the "BxA" numbers on my brokerage's trading screen mean?

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

  74. What is the difference between a logarithmic price scale and a linear one?

  75. What is the difference between economic value added and market value added?

  76. I want to buy a stock at $30, sell when it reaches $35, don't want to hang on to it if it dips below $27, and I want to do all this in one trading order. What type of order should I use?

  77. Would a slow stochastic be effective in day trading?

  78. What is the haircut rate imposed by clearing corporations?

  79. How long does a stock that has done a reverse split keep the letter "D" at the end of its symbol?

  80. How is spread calculated when trading in the forex market?

  81. Do stop or limit orders protect you against gaps in a stock's price?

  82. Is tracking error a significant measure for determining ex-post risk?

  83. If I reject the tender offer for acquisition of the stock that I own in a company and the company goes private, what happens to my stock?

  84. Why do companies merge with or acquire other companies?

  85. I keep hearing about the 50-day, 100-day and 200-day moving averages. What do they mean, how do they differ from each other, and what causes them to act as support or resistance?

  86. When computing the PEG ratio for a stock, how is a company's earnings growth rate determined?

  87. What is a stock-for-stock merger and how does this corporate action affect existing shareholders?

  88. Which is the best index to use to study the possible future price action of a given small-cap stock?

  89. Where can I find information about pre- and after-hours trading on the NYSE and the Nasdaq?

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

  91. Where do I place my target when the price of a stock breaks out of a technical chart pattern?

  92. Why would my stock's value decline despite good news being released?

  93. What is the difference between leverage and margin?

  94. In M&A how does an all-stock or all-cash deal affect the equity of the buying company?

  95. Why do some stock quotes appear in bold print in the newspaper?

  96. Can an option have a negative strike price?

  97. How can I determine a stock's next resistance level or target price?

  98. What is the best time of the day to trade?

  99. Is maximizing stock price the same thing as maximizing profit?

  100. What do the numbers that follow the bid and ask numbers in stock quotes represent?

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Last Questions Asked:
  1.

    How do I start using technical analysis?

  2. What is the difference between weighted average shares outstanding and basic weighted average shares?

  3. What does it mean when there is "price action"?

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