Active Trading FAQs

  1. If a LEAP option is purchased and held for more than 12 months, is the tax treatment long term?

  2. What happens if I cannot pay a margin call?

  3. How do I start using technical analysis?

  4. Where can I purchase options?

  5. How can I invest in a foreign exchange market?

  6. What is a derivative?

  7. How does margin trading in the forex market work?

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

  9. What are the rules for placing stop and limit orders in forex?

  10. Is it possible to trade forex options?

  11. I want to start buying stocks. Where do I start?

  12. I don't understand how a stock has a trading price of 5.97, but when I buy it I have to pay the asking price of 6.04. How can I be paying more than what the stock is trading for?

  13. Why can't I enter two sell orders on the same stock?

  14. What should I look for when choosing a forex trading platform?

  15. Is there a buy-and-hold strategy in forex, or is the only way to make money by trading?

  16. What is the difference between LIBOR, LIBID and LIMEAN?

  17. How much money do I need to start trading?

  18. What is the difference between the bond market and the stock market?

  19. Does a shareholder lose all of their equity once a Chapter 11 bankruptcy is filed by the company?

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

  21. After exercising a put option, can I still hold my option contract in order to sell it at a lower price?

  22. What are the requirements to be able to contribute to an HSA?

  23. What is a "wash sale"?

  24. If I buy a stock at $45 and I put a stop limit in to sell at $40, will I be guaranteed a sell once the stock has reached this price?

  25. Is life insurance good for mortgage protection?

  26. Why is Game Theory useful in business?

  27. What are the differences between AMEX and Nasdaq?

  28. What are the distribution options for an inherited annuity?

  29. Do stimulus checks work?

  30. What is the McGinley Dynamic?

  31. What's the difference between consumer confidence and consumer sentiment?

  32. My variable annuity account took a beating. Should I seek other alternatives?

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

  34. Why would you want a monthly benefit versus a daily benefit?

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

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

  37. Which of the following BEST describes tax treatment of a long option that expires without exercise?

  38. What is the difference between systemic risk and systematic risk?

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

  40. What are all of the securities markets in the U.S.A?

  41. What does "gather in the stops" mean?

  42. Which insurance policies do I really need?

  43. What happens to a stop order after a stock splits?

  44. What is an unregistered mutual fund?

  45. What is high-frequency trading?

  46. Is it possible to short sell real estate?

  47. A Straddle

  48. What is an alligator spread?

  49. All of these apply to an option exercise notice EXCEPT:

  50. What is "hammering"?

  51. Given the below information, all of the following statements are FALSE regarding this existing margin account EXCEPT:

  52. What is the Coppock curve?

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

  54. What does it mean when advertisers say that "financing is available"? Should I trust them to give me a good deal?

  55. A customer has the following in his long margin account. Market value: $18,000, debit balance: $10,000 and SMA: $2,000. How much of the SMA may be used to purchase additional securities?

  56. How do I use a premium put convertible?

  57. How did currency trader John Rusnak hide $691 million in losses before being caught for bank fraud?

  58. What is a vest fleece?

  59. Why should I invest?

  60. 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?

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

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

  63. What are the components of the risk premium for investments?

  64. Do I own a stock as of the trade date or the settlement date?

  65. What does it mean when the shares in my account have been liquidated?

  66. I want to try short selling, but how can I sell something that I don't own?

  67. What effect does a company's dividend reinvestment plan have on its stock price?

  68. Why do people say that September is the worst month for investing?

  69. Is it possible to buy mutual funds using a margin account?

  70. What are managed futures?

  71. What does it mean to have "dry powder"?

  72. What are some of the features and benefits of SEP IRAs and Roth IRAs?

  73. What does "buy and hold" mean?

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

  75. I own shares of a company that just received a delisting notice from Nasdaq. Does this mean I will lose my shares?

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

  77. What is the difference between a quote driven market and an order driven one?

  78. How does a stop-loss order work, and what price is used to trigger the order?

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

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

  81. 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?

  82. I just opened an IRA. What can I do to help my money grow?

  83. What is a gatekeeper?

  84. I do not want to totally get out of my retirement 401(k), but I want to take 72(t) distributions. What should I consider?

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

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

  87. Why does my broker allow me to enter only day orders for short selling?

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

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

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

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

  92. What is options backdating?

  93. How is the Parabolic SAR used in trading?

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

  95. Can I leave my pension to my spouse when I pass away?

  96. What does negative shareholder equity on a balance sheet mean?

  97. What is a margin account?

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

  99. My broker just sold securities out of my account without my permission. Is this legal?

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

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