Purchasing and selling the same security at the same time in different markets to take advantage of a price difference between the two separate markets. An arbitrageur would short sell the higher priced stock and buy the lower priced one. The profit is the spread between the two assets.
The physical MUN stock exchange was formerly located in Munich, Germany. The current computer trading network trades stock and fund shares as well as annuities using the MAX-ONE trading system. As with all other German exchanges, the MUN is owned by Borse. The Munich exchange is now operated entirely by computer and has no physical presence. Registered users can access real time quotes and other information directly online. Trading information such as morning news is available at 8AM each day.
A term employed by market technicians and day traders. Outside days are days where the chart bar is both higher and lower than that of the previous day. Outside days therefore mark greater volatility in the stock price for that day. Outside days apply to candlestick stock charts. When the bar is both higher and lower than the previous day's bar, it falls outside the trading range of the previous day. This may indicate a change in the general direction of the stock price.
1. A signed agreement between an investor who is seeking to open an options account and his or her brokerage firm. This agreement is used to verify the investor's level of experience and to ensure that the investor clearly understands the various risks involved when trading options. 2. An agreement between two parties that provides one of the parties with the right but not the obligation to buy, sell or obtain a specific asset at an agreed upon price at some time in the future. 1. This agreement illustrates that the investor understands the rules set forth by the options clearing corporation and that he or she will not be an undue risk to the brokerage firm. An investor is generally required to understand the option disclosure document, which highlights various options terminology, strategies, tax implications and unique risks, before the broker will allow the investor to trade options.2. A common type of option agreement is found in the real estate market, where one party buys the right to have the first chance of purchasing a piece of property at a specific price at some point in the future. Another common type of option agreement is a written outline that provides the details of an employee's ability to obtain stock options.
The act of placing buy/sell orders for financial securities and/or currencies with the use of a brokerage's internet-based proprietary trading platforms. The use of online trading increased dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers and internet connections.Stocks, bonds, options, futures and currencies can all be traded online. The use of online trades has increased the number of discount brokerages because internet trading allows many brokers to further cut costs and part of the savings can be past on to customers in the form of lower commissions. Another benefit of online trading is the improvement in the speed of which transactions can be executed and settled, because there is no need for paper-based documents to be copied, filed and entered into an electronic format.
In trading, an activity that exactly cancels the risks and benefits of another instrument in the portfolio. An offsetting transaction is used when it is not possible to simply close the original transaction as desired. This frequently occurs with options and other more complex financial instruments. In this way, a trader does not have to agree to close the option contract with the party on the other side of the options trade, but can simply cancel the net affect by entering into an offsetting transaction. The most basic example of an offsetting transaction occurs in options trading. Suppose you have sold a call option on 100 shares with a strike price of $35 and an expiration in three months. To close this transaction before three months is over, you can buy a call option with exactly the same features, thus exactly offsetting the exposure to the original call option. Offsetting transactions typically do not factor in transactions costs.
A securities exchange in the U.S. on which stocks and options are traded. The NYSE Arca, previously known as the ArcaEx or Archipelago Exchange, is owned by NYSE Euronext, which merged with Archipelago Holdings in a reverse merger in 2006. As of 2009, The NYSE Arca is the world's second largest electronic communication network (ECN) in terms of shares traded. It accounts for roughly 10% of NYSE-listed securities traded and 20% of Nasdaq-listed securities traded. Much like other ECNs, the NYSE Arca implements a liquidity fee/rebate program to improve overall market liquidity.
A market or limit order that gives the broker or floor trader both time and price discretion to attempt to get the best possible price. A person placing a not-held order exhibits great faith that the floor trader will be able to attain a better price than the current one. Although the floor trader has price and time discretion, he or she cannot be responsible for any losses that the shareholder may suffer as a result of this type of order. Often this type of order is applied to international equities to the fact that shareholders trust the trader's judgment more than they trust their own.