Active Trading FAQs

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

  2. What is authorized stock?

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

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

  5. What was "Operation Wooden Nickel"?

  6. What is the chaos theory?

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

  8. What is the incentive to buy a stock without dividends?

  9. What is late-day trading? Why is it any different from buying and selling stocks in the after-hours market?

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

  11. How can a company trade more shares in one day than there are shares outstanding?

  12. Is finance an art or a science?

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

  14. How can I invest in gold?

  15. What are the risks of having both high operating leverage and high financial leverage?

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

  17. How can I use market breadth to my advantage?

  18. How is margin interest calculated?

  19. What is the "random walk theory" and what does it mean for investors?

  20. Why was Microsoft subject to antitrust charges in 1998?

  21. How do investors "chase the market"? It this a bad thing?

  22. What is earnings management?

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

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

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

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

  27. How do I measure option liquidity?

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

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

  30. Can an option have a negative strike price?

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

  32. Where do investors tend to put their money in a bear market?

  33. 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?

  34. Who is Mr. Copper?

  35. What is market capitulation?

  36. Where did the bull and bear market get their names?

  37. What is the difference between options and futures?

  38. I made involuntary contributions to a retirement plan while temporarily employed. Can I withdraw these funds without penalty?

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

  40. I am in the second year of taking SEPP distributions from my IRA. Can I transfer some of the funds to a new IRA with different investment options?

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

  42. How do speculators profit from options?

  43. What do the bracketed numbers following a technical indicator mean?

  44. I passed my Series 7 exam, but I terminated employment at my sponsoring firm before I received my license. Is my exam still valid?

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

  46. What do people mean when they say there is a "bubble" going on in the market, such as a "housing bubble" or a "technology bubble"?

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

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

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

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

  51. Is technical analysis used only to analyze stocks?

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

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

  54. How many types of markets can an investor choose from?

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

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

  57. How does the ISIN numbering system work?

  58. How can unethical executives use options backdating to evade taxes?

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

  60. How are stock warrants different from stock options?

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

  62. I'm about to retire. If I pay off my mortgage with after-tax money I have saved, I can save 6.5%. Should I do this?

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

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

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

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

  67. Why won't my broker allow me to sell one stock and buy another on the same day?

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

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

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

  71. How can a futures trader exit a position prior to expiration?

  72. What is the difference between a Keogh and an IRA?

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

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

  75. Why can you short sell an ETF but not an index fund?

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

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

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

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

  80. Can an option be exercised on the expiration date?

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

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

  83. What do you call a candlestick with no shadows, and what does it mean?

  84. How do I calculate forex pivot points?

  85. What is variable life insurance?

  86. Use the following information about a customer’s margin account to answer the question.

  87. 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?

  88. If everyone is selling in a bear market, does your broker have to buy your shares from you? If so, won't he be losing his shirt?

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

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

  91. 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

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

  93. How is a put option exercised?

  94. What does the diluted share price reveal about a company's financial strength?

  95. What is relative strength?

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

  97. Who or what are the turtles?

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

  99. How does pyramiding work?

  100. Margin accounts are established to allow investors the ability to use leverage with their investments.

Trading Center