FAQs tagged as

Investing-Basics

  1. What is the difference between principles-based accounting and rules-based accounting?

  2. When should a company recognize revenues on its books?

  3. If a company moves its dividend record date forward, does the ex-dividend date change too?

  4. How does the ISIN numbering system work?

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

  6. My family owns an old railroad bond from 1938. Is there any way to find out whether this still has any value?

  7. What is a liquidity squeeze?

  8. What are the advantages of using a mini forex account for trading?

  9. How do proxy fights work?

  10. What is a blank-check company?

  11. What is dead money?

  12. How do companies use the Pac-Man defense?

  13. What is a margin account?

  14. What's the difference between the Dow Jones Industrial Average and the S&P 500?

  15. Why would a stock have no par value?

  16. What is the difference between the Dow and the Nasdaq?

  17. How do I find historical prices for stocks?

  18. What is the "percentage off the 52-week high or low"? How is this calculated?

  19. What are defensive stocks?

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

  21. How can you lose more money than you invest shorting a stock? If you have no money left in your account, how do you pay it back?

  22. If one of your stocks splits, doesn't that make it a better investment? If one of your stocks splits 2-1, wouldn't you then have twice as many shares? Wouldn't your share of the company's earnings then be twice as large?

  23. How can I hedge against rising diesel prices?

  24. What is the difference between IAS and GAAP?

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

  26. What is the difference between amortization and depreciation?

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

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

  29. Are ETFs subject to the short sale uptick rule?

  30. Is an earnings surprise priced into the opening value by market makers or does the buyer/seller response drive the price?

  31. Why do brokers ask for personal information before they make any trades?

  32. Why would a company make drastic cuts to its dividend payments?

  33. What is an Islamic investment policy?

  34. What is the difference between a collateralized mortgage obligation (CMO) and a collateralized bond obligation (CBO)?

  35. What is the best method of analysis for forex trading?

  36. How long does it take for a merger to go through?

  37. What is a "daisy chain"?

  38. How is something "brought over the wall" in an investment bank?

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

  40. Can you short sell ETFs?

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

  42. What is a wrap account and what are the advantages of using one?

  43. What is a penny stock?

  44. Can you short sell stocks that are trading below $5? My broker says that I can't.

  45. What is the best way to measure the total market?

  46. Why do accountants use debits and credits instead of simple pluses and minuses? Why is the notation for a debit "DR"?

  47. How does a pump and dump scam work?

  48. Why do you need a margin account to short sell stocks?

  49. Why are some shares priced in the hundreds or thousands of dollars, while other just as successful companies have more normal share prices? For example, how can Berkshire Hathaway's be over $80,000/share, when the shares of even larger companies are only

  50. 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?

  51. In an IPO, who is a greensheet distributed to and for what purpose?

  52. What causes a significant move in the stock market?

  53. What are the disadvantages of using net present value as an investment criterion?

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

  55. What are the determinants of a stock's bid-ask spread?

  56. Do noise traders have any long-term effect on stock prices?

  57. Do all international markets trade between 9:30am and 4pm local time?

  58. Where can I find the number of shares shorted on a specific stock?

  59. What are the fifth-letter identifiers on the Nasdaq?

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

  61. What are managed futures?

  62. How can I prevent commissions and fees from eating up my trading profits?

  63. What is a "dog and pony" show?

  64. What are the "big uglies"?

  65. What exactly is insider trading?

  66. What's the difference between publicly- and privately-held companies?

  67. What's the difference between a Nasdaq market maker and a NYSE specialist?

  68. Are my investments insured?

  69. I will be receiving monies from a QDRO executed pursuant to my divorce. I would like to take a portion of the money as a distribution to pay for a new home. What are the tax implications of doing this?

  70. What is a treasury stock?

  71. What is a pure play?

  72. Why did the New York Stock Exchange report prices in fractions before it switched to decimal reporting?

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

  74. What is the ideal number of stocks to have in a portfolio?

  75. I have only $500 to invest, am I limited to buying only penny stocks?

  76. I live in the U.S. How can I trade stocks in China and India?

  77. What methods can be used to measure and profit from investor sentiment?

  78. How are foreign exchange rates affected by commodity price fluctuations?

  79. What are reverse stock splits?

  80. Why are options very active when they are at the money?

  81. What are the three phases of a completed initial public offering (IPO) transformation process?

  82. What does "buy on the cannons, sell on the trumpets" mean?

  83. What is authorized stock?

  84. If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?

  85. What happens when a circuit breaker is put into effect?

  86. How do you determine a company's percentage of credit sales?

  87. What is securitization?

  88. Where can I find information on different companies so that I won't have to read every earnings report?

  89. What is a typical day in the life of someone in M&A? How long does a project last?

  90. How does pyramiding work?

  91. What is an echo bubble?

  92. What is earnings management?

  93. Why do stock prices change following news reports?

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

  95. 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?

  96. Why do companies report earnings at different times?

  97. Please explain what a short seller is on the hook for when he or she shorts a stock (i.e. dividends, rights offerings, etc.).

  98. What does it mean when someone says that a stock went up X points? Does this refer to a percentage or numerical value?

  99. What is a boiler room operation?

  100. Is technical analysis used only to analyze stocks?

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