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What is a Long Position?

A long position - or to be “long a stock” - means that an investor has share ownership and will receive economic benefit

What does “Buy to Close” Mean?

When an investor takes a short position on an option contract by selling (“writing”) a call or put option, he or she...

What is a Breakeven Price?

The breakeven price will be the strike price plus the amount of the investor’s premium or net debit. Breakeven price...

What is a Bear Squeeze?

Investors who were bearish on a stock may have chosen to short-sell shares in the hopes that they could cover at a...

What is a Long Squeeze?

A long squeeze is when shareholders feel the pressure of falling prices and themselves sell, causing the price to fall

What is a Margin Account?

A margin account is one in which an investor uses borrowed money to purchase additional securities

What is a Margin Call?

A margin call is a mandatory request by the custodian/broker for the account holder to add equity to the account

What Does Maintenance Margin Mean?

A maintenance margin is the minimum amount of equity an investor must keep in a brokerage account to cover margin balances

What is Minimum Margin?

Minimum margin is the minimum amount needed to open a margin account. The broker typically sets the minimum margin

What Does Mark to Market (MTM) Mean?

Mark to Market (MTM) is an accounting method meant to price an asset by its most recent market price

What Does it Mean to have a "Duty of Best Execution"?

To have a “duty of best execution” means that a broker or entity fulfilling a trade request has to do so at the best...

What is a Limit Order?

A Limit Order is a type of order to buy or sell a security, where the trader wants to set a specific price for the trade

What is After-Hours Trading?

After-Hours Trading on the Nasdaq can take place after market close from 4-8pm EST or in the pre hours from 4-9:30am EST

What is Margin?

The act of “going on margin” means borrowing money from the custodian of your account, in order to purchase...

What is an Alternative Trading System (ATS)?

An ATS is a platform separate from an exchange where securities are traded. ATSs provide marketplaces for buyers and...

What is an Electronic Communication Network (ECN)?

An ECN is an alternative platform to an index for making trades. An Electronic Communication Network is a type of...

What is Momentum Investing?

Momentum investors usually have their own models for determining whether they think a price trend (to the upside or...

What is a Money Market?

Money market securities are essentially IOUs issued by governments, financial institutions and large corporations

What does “Buy the Dips” Mean?

“Buying the dips” is a bullish description of investing in stocks whose prices have gone down

What does “Buy to Open” Mean?

If you buy a put or call option, your ticket with say “buy to open” since you are opening a position and increasing...

What does “Buying on Weakness” Mean?

Instead of waiting for confirmation of reversal, “buying on weakness” means to go ahead and buy a long position...

What is a Calendar Spread?

A calendar spread is a strategy also known as a horizontal/time spread, in which the investor uses two options contracts

What is a Buying Hedge?

Hedging against future price risk was the main reason Futures contracts came into being. Buying a hedge is a Forward...