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Active Trading FAQs

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

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

  3. How is the Parabolic SAR used in trading?

  4. Is scalping a viable forex trading strategy?

  5. What is a Bermuda swaption?

  6. What does "buy and hold" mean?

  7. What are the minimum margin requirements for a short sale account?

  8. Is finance an art or a science?

  9. 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?

  10. Can an option have a negative strike price?

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

  12. What are managed futures?

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

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

  15. How do I measure option liquidity?

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

  17. How do speculators profit from options?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  36. What is relative strength?

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

  38. 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"?

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

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

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

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

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

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

  45. Who or what are the turtles?

  46. How can I tell if I'm an emotional investor?

  47. What is the chaos theory?

  48. What is the homo economicus?

  49. What does it mean to book the basis?

  50. Which statements about fill-or-kill orders are FALSE?

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Last Questions Asked:
  1.

    What happens if I cannot pay a margin call?

  2. How do I start using technical analysis?

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

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