Active Trading FAQs

  1. What does it mean to be long or short a derivative?

  2. What is an over-the-counter derivative?

  3. What does the underlying of a derivative refer to?

  4. What kinds of derivatives are types of contingent claims?

  5. What does it mean to take delivery of a derivative contract?

  6. How can derivatives be used for speculation?

  7. What does it mean when I get a Fed margin call?

  8. What does it mean to roll a derivative contract?

  9. How can derivatives be used for risk management?

  10. How do I Implement a Forex Strategy when spotting a Sanku (Three Gaps) Pattern?

  11. How can I profit from monitoring open interest?

  12. How is liquidity risk captured by the cash conversion cycle (CCC)?

  13. What debt to equity ratio is common for a bank?

  14. What is the relationship between degree of operating leverage and profits?

  15. What's a good forex strategy to use when spotting a Wedge-shaped Pattern?

  16. Is the drugs sector better suited for active or passive investment?

  17. Why would a company issue a rights offering?

  18. What is the difference between share purchase rights and options?

  19. How do I perform a financial analysis using Excel?

  20. What are the tax benefits of establishing a sinking fund?

  21. What is the difference between an option-adjusted spread and a Z-spread in reference ...

  22. In what ways can a sinking fund affect bond returns?

  23. What are the pros and cons of using the fixed charge coverage ratio?

  24. What are the different types of margin calls?

  25. What debt/equity ratio is typical for companies in the insurance sector?

  26. Can delta be used to calculate price volatility of an option?

  27. How do I use Trade Volume Index (TVI) to create a forex trading strategy?

  28. Why is the Trade Volume Index (TVI) important for traders and analysts?

  29. What is the Trade Volume Index (TVI) formula and how is it calculated?

  30. How do I use Time Segmented Volume (TSV) for creating a forex trading strategy?

  31. Why should investors care about risk weighted assets of a bank?

  32. For what sorts of purposes can the funds in a share premium account be disbursed?

  33. If my brother-in-law, who works at a pharmaceutical company, tells me about his research ...

  34. What is the difference between a banker's acceptance and a post-dated check?

  35. How legitimate are companies that advertise debt consolidation for all my credit ...

  36. What is the average return on equity for a company in the electronics sector?

  37. How can a business eliminate deadweight loss from government regulation?

  38. When is a bond's coupon rate and yield to maturity the same?

  39. What are the benefits and shortfalls of the Herfindahl-Hirschman Index?

  40. What is the difference between a copay and a deductible?

  41. How can I calculate a company's forward p/e in Excel?

  42. How do unfunded capital expenditures and distributions affect the fixed charge coverage ...

  43. What are some examples of horizontal integration?

  44. How does debt affect a company's beta?

  45. How can I apply sensitivity analysis to my investment decisions?

  46. What is the average debt/equity ratio for the Internet sector?

  47. Why are coupon payments considered an annuity?

  48. How should a risk-averse investor build a retirement portfolio?

  49. Why is a company's diluted EPS always lower than its simple EPS?

  50. What is the difference between earnings per share (EPS) and diluted EPS?

  51. How do I change my strike price once the trade has been placed already?

  52. What happens when a security reaches its strike price?

  53. What are the most popular and useful measures of credit spread?

  54. In the context of a startup, what is sustainable growth?

  55. How can I evaluate if a stock is a short squeeze?

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

  57. How can I use simple moving averages to swing trade?

  58. How can I use simple moving averages to signal when to buy or sell stocks?

  59. How does days to cover a short position relate to a short squeeze?

  60. Is it better practice to use a stop order or a limit order?

  61. Are simple moving averages backward or forward looking?

  62. Are stop orders only used for stocks?

  63. What securities can I use to engage in speculation of an asset while limiting my ...

  64. How can I generate a yield from stocks in the Internet sector that do not pay a dividend?

  65. What does passing the Series 6 enable me to do?

  66. What are the benefits of using open interest as an indicator?

  67. How can I manage the three possible sources of business risk?

  68. How can I profit from a decline of stock prices in the insurance sector?

  69. What is the difference between open interest and volume?

  70. What does a rising open interest on a stock signal?

  71. How is the spot price related to a derivative's notional value?

  72. What options strategies are best suited for investing in the chemicals sector?

  73. Why are growth investors attracted to the chemicals sector?

  74. Which stage of the economic cycle is most favorable for the chemicals sector?

  75. What are some common markets where notional value is used?

  76. How does fundamental analysis differ from technical analysis?

  77. How does holding period return yield differ between short and long positions in the ...

  78. What is the difference between a buy limit and a sell stop order?

  79. How is a leveraged buyout different from a buyout?

  80. What risks are associated with a closed end investment?

  81. Is it better to use fundamental analysis, technical analysis or quantitative analysis ...

  82. How does operating leverage affect business risk?

  83. What are the benefits of investing in a cyclical stock?

  84. Why would growth investors be attracted to the electronics sector?

  85. What options strategies are commonly used for investing in the electronics sector?

  86. How can I calculate degree of operating leverage on Excel?

  87. How is the Dow Jones Industrial Average used in the Dow theory?

  88. How do day traders capture profits from the difference between bid and ask prices?

  89. Should I enter a limit order to buy a position with a bid and ask that are far apart?

  90. What are some examples of successfully executed leveraged buyouts?

  91. When is an options straddle deep in the money?

  92. How can I use equity options to protect my stock portfolio from downturns?

  93. When should I use a trailing stop order?

  94. What types of options positions create unlimited liability?

  95. What does high open interest tell you about an option?

  96. How can I use a stop order to limit my losses on a long stock position?

  97. What is the difference between a stop and a market order?

  98. How can I calculate the leverage ratio using tier 1 capital?

  99. What is the difference between a short squeeze and a long squeeze?

  100. What does a high degree of operating leverage indicate?

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