The act of completing a transaction in order to remove any obligations. Cover is a general term used in many different instances. For instance, an investor that recently purchased a security will have to cover the purchase by depositing the necessary funds. Or, an investor may wish to cover his/her short position by purchasing the stock. Additionally, a portfolio manager may wish to cover his/her risk exposure by buying an offsetting position.
A method of transacting different securities orders. Continuous trading involves the immediate execution of orders upon their reception by market makers and specialists. Unlike batch trading, which collects similar orders and executes them all at once, continuous trading entails the immediate placement of orders to market. In the U.S., all trades occur on a continuous basis except at opening. For example, a limit order to sell a security is immediately sent to market and remains there until either the order expires or a buy order with a higher or equal buying price is sent to market.
A term used to refer to the open orders held by floor brokers on futures exchanges. The deck consists of buy and sell orders for futures and options.In equity markets, this is also known as "the book."
The process of closing out positions that were originally put in place to act as a hedge in one's portfolio. De-hedging involves going back into the marketplace and closing out hedged positions, which were previously taken to limit an investor's risk of price fluctuations in relation to their underlying asset. De-hedging is done when holders of an underlying asset have a bullish outlook on their investment. Therefore, the investor would prefer to remove their hedged position to gain exposure to the expected upward price fluctuations of their investment. For example, a hedged investor in gold who feels the price of their asset is about to go up would buy back any gold futures contracts they had sold in the futures market. By doing this, the investor will have positioned themselves to reap the rewards of an increase in the price of gold if their bullish prediction on gold is correct.
A measurement of a company's issued shares that are currently shorted, expressed as the number of days required to close out all of the short positions. For example, if a company has average daily volume of 1 million shares and 2 million shares are currently short sold, the shares have a cover rate of 2 days (2M/1M).Also referred to as the "short-interest ratio". This ratio is somewhat unique because it measures the future buying pressure on a stock that is virtually certain to happen - short sellers must buy back shares at some point if they are to close out their positions.If a stock's price begins to rise significantly, investors who have short sold the stock will quickly begin to close out their positions (by purchasing shares off the open market), creating buying pressure for the stock and driving the price up even more. If a previously lagging stock turns very bullish, the buying action of short sellers can result in extra upward momentum and increased losses for short sellers who are slow to close out their positions. The longer the days to cover, the more pronounced this effect can be.
A stock trader who holds positions for a very short time (from minutes to hours) and makes numerous trades each day. Most trades are entered and closed out within the same day. This is a highly speculative practice. The reality is that most day traders lose money.
The Borse-Dusseldorf exchange is located in Dusseldorf, Germany. It provides information and consulting services in addition to functioning as an exchange. It offers the QUOTRIX trading system for securities and GEFOX for closed-end funds. Most of the clients and members of the exchange are situated in North Rhine Westphalia. However, many companies in northern Germany also use them. Subscribers who join their free Quality Service Club can get real-time quotes from the exchange directly online.
An investment strategy where individual investors choose to build and manage their own investment portfolios. Do-it-yourself (DIY) investors commonly build and manage their portfolios with the use of discount brokerages, as opposed to full-service brokerages or money managers. It is common to find a sharp rise in the level of DIY investing following market downturns or economic uncertainty. The advent of discount brokerages and a multitude of online investment tools has led to a large increase in DIY investing in recent years. Individual investors will often choose to manage their own investments and leave their brokerages, portfolio managers and mutual funds due to the management fees associated with those investments, or the poor performance of their investments relative to the broader market. Although discount brokerages do not charge management fees, they still charge trading and maintenance fees which can eat away at an individual investor's portfolio.