A Fibonacci trading tool used to aid investors in indentifying price movements. Essentially, using this model, investors attempt to buy high and sell low. One of its main uses is to indentify the underlying structures of price movements by analyzing the changing shape of the ellipse. The Phi Ellipse is normally drawn by a computer program due to its complexity. Generally speaking, a phi ellipses is used to detect price patterns so investors are better capable of forecasting pricing moves, and therefore, able to detect when a buy or sell is in order. These patterns found in the ellipses have practical application to many trading forums, such as Forex trading platforms.
Now known as the NYSE Euronext (NYX), the Paris Stock Exchange trades both equities and derivatives and posts the CAC 40 Index. This index is made up of French companies, although nearly half of these are owned by foreign entities. NYX seeks to offer the most modern and advanced trading platform and services available to traders. The NYX is the first European integrated stock exchange. It was created in 2000 when the Paris, Brussels and Amsterdam exchanges all merged. It employs the NSC system for trading and uses LCH Clearnet to clear its transactions.
The strategy of matching a long position with a short position in two stocks of the same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing on the two stocks; the stock you are long in versus the stock you are short in. It's the ultimate strategy for stock pickers, because stock picking is all that counts. What the actual market does won't matter (much). If the market or the sector moves in one direction or the other, the gain on the long stock is offset by a loss on the short.
1. A purchase of securities to offset a previously transacted sale of the same security. 2. A transaction in securities markets where off-setting buy and sell trades are settled in cash, based on the difference in the prices between the off-setting trades. No securities trade hands; instead the settlement difference between the trades is calculated, and a money wire is sent to the appropriate party. 1. The offsetting position is usually transacted within the same day of the original purchase. This is also referred to as crystallization. 2. Matching trades for pairoff can reduce settlement risks and security wire transfer fees. It is ultimately a form of speculation.
1. Excessive buying and selling of stocks by a broker on an investor's behalf in order to increase the commission the broker collects. This situation has been known to arise when brokers are pressured to place a newly issued security underwritten by a firm's investment banking arm. Also known as "churning".2. A situation in which a company is growing its sales faster than it can finance them. This usually leads to enormous accounts payable or accounts receivable and a lack of working capital to finance operations. 1. One way to protect yourself from overtrading (churning) is through a wrap account - a type of account that is manged for a flat rate rather than charging commission on every transaction. 2. Many businesses become insolvent because they try to accommodate everyone who wishes to purchase their products. This ultimately leads to not being able to pay for the financing costs used to produce the goods.
The risk that occurs as a result of conducting transactions between different time zones. More specifically, this refers to how the receiving party may not necessarily know whether the other party fulfilled its obligations until the next trading day. This risk is most evident when the time zone difference is the largest. For example, transactions that occur between a party from Tokyo and another party in New York could be a cause for overnight delivery risk. Since both locations are located in different timezones, the party in Tokyo would need to wait over night to receive confirmation that the transaction from the party in New York was completed. However, if the transaction did not go through, the partner in Tokyo would not find out until the next day, at which time it may be too late to conduct the transaction again.
A type of stock trader who holds a position for the long term (from months to years). Long-term traders are not concerned with short-term fluctuations because they believe that their long-term investment horizons will smooth these out. Many position traders will take a look at weekly or monthly charts to get a sense of where the asset is in a given trend. Position trading is the polar opposite of day trading because the goal is to profit from the move in the primary trend rather than the short-term fluctuations that occur day to day.
A type of transaction that occurs when a company issues public stock in Canada. A qualifying transaction occurs when a qualified Capital Pool Company (CPC) purchases all of the outstanding shares of a privately-owned company from the current shareholders. The private company then becomes a fully-owned subsidiary of the CPC. Because the capital pool company will, by nature, have no business of its own, whatever line of trade that the private company engages in becomes the business of the CPC. Qualifying transactions usually formally begin when the shareholders and the CPC create a Letter of Intent (LOI) outlining the terms of the agreement. Usually, the CPC must include a plan for financing the transaction in every LOI.