Accommodation trading occurs when a trader enters into a non-competitive purchase or sale order to accommodate another trader. 

Accommodation trading is a type of trading in which one trader accommodates another by entering into a non-competitive purchase or sale order. For Bob, the risk may be that when he goes to by the stock back from Jill that it has fallen in price below $25, but he is obligated to pay the higher price to Jill, and he won't be able to claim the actual capital loss he experienced. For example, a cabinet trade is a type of accommodation trade in which the option holders can erase an open position from their ledger for the price of 1 cent per share, or $1 per contract. In essence, the trade allows Bob to cheat the tax system because he never actually lost any real value on the stock; he manufactured the trade with the intent of paying less tax. Bob uses this technique to realize a capital loss of $15 per share on his taxes, and he uses it to lower the taxes paid on capital gains on his other investments.

Accommodation Trading

Active trading is the buying and selling of securities or other instruments with the intention of only holding the position for a short period of time.

Active trading refers to buying and selling securities for quick profit based on short-term movements in price. Day traders, scalpers, and swing traders are all considered active traders, with scalpers and day traders being more active than swing traders. Day traders that make tens or hundreds of trades per day would be very actively trading, while a swing trader that is opening or closing positions every few days may be considered by many to be an active trader as well. Active traders typically use a high volume of trades to make profits, since the price swings likely to occur over the short term tend to be relatively small. Similarly, they could place a limit sell order to exit the position at $31.
Such orders allow the active trader to buy and sell without having to watch the price every second of the day.

Active Trading

Active investing refers to an investment strategy that involves ongoing buying and selling activity by the investor.

Active investing refers to an investment strategy that involves ongoing buying and selling activity by the investor. Smart beta exchange-traded funds are a cost-effective way for investors to take advantage of active investing by considering alternative factors as opposed to simply tracking a benchmark index, such as selecting a portfolio based on company earnings or some other fundamental approach. Active investing allows money managers to meet the specific needs of their clients, such as providing diversification, retirement income or a targeted investment return. Unlike passive investors, who invest in a stock when they believe in its potential for long-term appreciation, active investors typically look at the price movements of their stocks many times a day. Active investing allows money managers to adjust investors’ portfolios to align with prevailing market conditions.

Benefits and Limitations of Active Investing

Aggressors are traders who remove liquidity from markets by entering orders that are immediately executed because they match the best bid or offer.

Aggressors are traders that take liquidity out of the markets. For example, if the bid-ask spread for a specific crude oil contract is ten contracts at $60.01 bid/15 contracts at $60.11 ask, an aggressor would immediately buy 15 contracts at the best asking price of $60.11 or instantly sell ten contracts at the best bid of $60.01. This immediate action means aggressors sell at lower and lower prices and buy at higher and higher prices, thereby pushing other traders out and taking liquidity out of the market. By taking immediate action at the current bid or asking price, aggressors continue to sell at lower and lower costs or buy at higher and higher prices. Aggressors are traders who remove liquidity from the markets by entering buy and sell orders at current at-market prices.

Aggressor

An alternative trading system (ATS) is a loosely regulated venue for matching the buy and sell orders of its subscribers. 

Responses to Frequently Asked Questions Concerning Rule 301(b)(5) under Regulation ATS 'Fair Access Rule'

Regulation of NMS Stock Alternative Trading Systems

SEC Adopts Rules to Enhance Transparency and Oversight of Alternative Trading Systems

An alternative trading system (ATS) is a trading venue that is more loosely regulated than an exchange. To comply with Regulation ATS, an ATS must register as a broker-dealer and file an initial operation report with the Commission on Form ATS before beginning operations. An ATS must file amendments to Form ATS to provide notice of any changes to its operations, and must file a cessation of operation report on Form ATS if it closes. Most ATS are registered as broker-dealers rather than exchanges and focus on finding counterparties for transactions.
Alternative trading system (ATS) is the terminology used in the U.S. and Canada. An ATS meets the definition of an exchange under federal securities laws but is not required to register as a national securities exchange if the ATS operates under the exemption provided under Exchange Act Rule 3a1-1(a).

Alternative Trading System (ATS)

Anonymous trading occurs when high profile investors execute trades that are visible in an order book but do not reveal their identity.

Table of Contents
What Is Anonymous Trading?
Understanding Anonymous Trading
Special Considerations
Example Small retail traders don't need to worry about anonymous trading since their orders have little price impact, other traders are not significantly concerned with other small trader's actions, and most retail traders trade through large brokers where there are thousands of traders so their identity is obscured to other traders anyway. No regulated order is truly anonymous since the trades still need to be settled and cleared, and regulators still need access to trade information if they want it.
Retail traders don't need to concern themselves with trading anonymously since they typically don't have a significant price impact and other traders aren't particularly concerned with smaller one-time orders. Many large stock exchanges started to offer anonymous trading when accessing the central order book due to competition from electronic communication networks (ECNs) that offer anonymous trading. For retail traders trading through a large broker, anonymous trading is not important because there are so many clients at the brokerage that the broker will be constantly making trades in most equities.

Anonymous Trading

An antedate is a date entered on a legal contract or check that is prior to the actual date of occurrence. 

An antedate is a date entered on a legal contract or check before the actual date of occurrence, also known as a"backdate." Situations where illegal antedating may be used can include antedating company stock options to provide an advantageous price or antedating documents past a specified due date that provides an associated party with advantageous benefits. Since options and futures offer an investor the chance to obtain rights either up to or on the date of expiration, any date prior to expiration may be considered an antedate. Since the term ex-dividend means without a dividend, an investor is required to own or buy shares by the end of the trading day prior to the ex-dividend date to receive the company’s dividend. An antedate is a date entered on a check or legal contract that is prior to the date of entry on the check or document.

Antedate Definiton

An arbitrageur is an investor who tries to profit from price inefficiencies in a market by making two simultaneous offsetting trades.

An arbitrageur is a type of investor who attempts to profit from market inefficiencies. An arbitrageur would, for example, seek out price discrepancies between stocks listed on more than one exchange by buying the undervalued shares on one exchange while short selling the same number of overvalued shares on another exchange, thus capturing risk-free profits as the prices on the two exchanges converge. For example, a takeover arbitrageur may use information about an impending takeover to buy up a company's stock and profit from the subsequent price appreciation. The trader exploits the arbitrage opportunity until the specialists on the NYSE run out of inventory of Company X's stock, or until the specialists on the NYSE or LSE adjust their prices to wipe out the opportunity. As the price of Bitcoin reached new records, several opportunities to exploit price discrepancies between multiple exchanges operating around the world presented themselves.

Arbitrageur

The ask is the price a seller is willing to accept for a security in the lexicon of finance.

SEC Concept Release: Request for Comment on the Effects of Decimal Trading in Subpennies

The ask is the price a seller is willing to accept for a security, which is often referred to as the offer price. The difference between a bid price and ask price is called the spread. A spread of two cents on a price of $10 is 0.02%, while a spread of two cents on a price of $100 is 0.002%. The bid/ask spread for cross-currency transactions such as the euro versus the Japanese yen or the British pound is usually two to three times as wide as spreads versus the dollar. The ask is the price a seller is willing to accept for a security, which is often referred to as the offer price.

Ask size is the amount of a security that a market maker is offering to sell at the ask price. 

The ask size is the amount of a security that a market maker is offering to sell at the ask price. When a customer order comes to the exchange, the order is filled by the market marker with the lowest ask price (for buy orders) or the highest bid price (for sell orders).
Ask price and bid price numbers are usually shown in brackets in a price quote. The market maker must state the price it is asking for a given security (the ask price) and the amount it is willing to sell at that price (the ask size). The bid price is the highest bid entered to purchase XYZ stock, while the ask price is the lowest price entered for this same stock. Also, the market maker must state the price at which it is willing to buy the security (the bid price) and the amount of securities it is willing to buy (the bid size).

Ask Size

Average daily trading volume (ADTV) is the average number of shares that change hands in a stock. The average can be calculated over any number of days, and is useful for determining which stocks are suitable for which investors/traders.

Average daily trading volume (ADTV) is the average number of shares traded within a day in a given stock. Many traders and investors prefer higher average daily trading volume compared to low trading volume, because with high volume it is easier to get into and out positions. Decreasing volume shows interest is waning, but even declining volume is useful because when higher volume returns there is often a strong price push as well. Therefore, monitor volume and average volume regularly to make sure that the asset still falls within the volume parameters you desire for your trading. Calculate average daily trading volume by adding up trading volume over the last X number of days.

Average Daily Trading Volume - ADTV

The ax is the market maker who is most central to the price action of a specific security across tradable exchanges.

Ax is the moniker given to the market maker who is most central to the price action of a specific security across tradable exchanges. In general, traders should keep an eye on how many shares the market maker shows as available, how many they actually sell, the bid-ask spreads, and how quickly the market maker permits the stock to move in either direction. The ax can be identified by studying Level II quotes and noting which market maker seems to have the greatest effect on the security’s price. The ax can be identified by studying Level 2 quotes and noting which market maker seems to have the greatest effect on the security’s price. Many day traders attempt to identify the ax in a given security and trade in the same direction as the market maker as a way to increase their odds of success.

An axe (or "axe to grind") is the interest that a trader shows in buying or selling a security that is typically already on the books.

An axe (or "axe to grind") is the interest that a trader shows in buying or selling a security that is typically already on the books. For instance, a trader may hold a long position and have an axe toward put options if nervous about the stock’s short-term prospects.
Having an axe is often kept secret because knowledge of that information can be used by other market participants to exploit the situation for their own gain, and at the expense of the axe holder. If that trader shops around for quotes with the intent of selling the stake, the trader who provides the quote may be at a disadvantage if they are unaware that the first trader has an axe with regard to the security. If a trader holds a long position but has short-term concerns, that trader’s axe toward short-term put options may be significant. The second trader may ask, “Do they have an axe on this security?” which means “Do they have plans to sell this security?”

A bearer form is a security not registered in the issuing corporation's books, but which is payable to its bearer, that is, the person possessing it.

A bearer form is a security that is not registered in the issuing corporation's books and is payable to the person possessing the stock or bond certificate. To transfer ownership of a bearer security, the owner signs the certificate and sends it to the issuer's transfer agent—the certificate is then canceled and a new certificate is issued to the new owner. A bearer form security is one that has no records of ownership in the issuer's books and the only evidence of ownership is physical possession of the certificate. Two types of bearer form certificates are bearer bond and bearer stock certificates. That is, whoever produces the bearer certificate is assumed to be the owner of the securities and can collect both dividends and interest payments tied to the security.

Bearer Form

In the UK, a bed and breakfast deal is when a trader sells a security at the end of the last day of the financial year and buys it back the next day.

In investing, a bed and breakfast deal is a practice in the United Kingdom whereby the holder of a security sells it at the end of the day on the last day of the financial year and buys it back the next morning. A bed and breakfast deal is an investing strategy in the United Kingdom where an investor sells a security at the end of the day on the last day of the financial year and buys it back the next morning. In investing, a bed and breakfast deal is a practice in the United Kingdom whereby the holder of a security sells it at the end of the day on the last day of the financial year and buys it back the next morning. Using a contract for differences (CFD) is a strategy that allows investors the opportunity to mimic a bed and breakfast deal without violating the 30-Day Rule. Remember that if you buy a CFD to reflect a long position of XYZ Group shares, the broker will normally go and buy those shares in the market.

Bed and Breakfast Deal

A beneficial owner is the true owner of an asset or security that is under a different legal name. 

A beneficial owner is a person who enjoys the benefits of ownership even though the title to some form of property is in another name. 1:00
For example, when shares of a mutual fund are held by a custodian bank or when securities are held by a broker in street name, the true owner is the beneficial owner, even though, for safety and convenience, the bank or broker holds the title. Wealthy individuals who are at risk of lawsuits, or simply want to protect their assets and plan their estate, generally use trusts to act as the legal owner of their property, often securities and money, while they and their families continue to be the beneficial owners. In most cases, the legal and beneficial owners are one and the same, but there are some cases, legitimate and sometimes not-so legitimate, where the beneficial owner of a property may wish to remain anonymous. Beneficial ownership is distinguished from legal ownership, though in most cases, the legal and beneficial owners are one and the same.

Beneficial Owner

The best ask is the lowest quoted offer price from competing market makers for a particular trading instrument.

A best ask (also known as a best offer) is the lowest offer price from competing market makers or other sellers for a quoted security. A best ask may also refer to the lowest price that a given individual market participant is willing to sell, in which case it would be their best ask, and not necessarily the market's best ask. The ask (offer) price is effectively the lowest price a seller is willing to take for an asset, and is the most favorable price a buyer could expect to pay using a market order at that time. This helps to level the playing field for retail traders who may not have the resources to always seek out the best prices across multiple exchanges.
The lowest ask price and the highest bid price are displayed in the NBBO and are not required to come from the same exchange. A best ask (also known as a best offer) is the lowest offer price from competing market makers or other sellers for a quoted security.

Best Ask

A bid tick is an indication of whether the latest bid price is higher, lower, or the same as the previous bid. 

A bid tick is an indication of whether the latest bid price is higher, lower, or the same as the previous bid. Bid ticks track movements of bid prices in an open market for all placed bid offers, giving real-time information to traders and market participants about the direction of bid prices over any given time period. The bid tick index is a popular indicator used by day traders to view the overall market sentiment at any point in time. A bid tick is an indication of whether the latest bid price is higher, lower, or the same as the previous bid. A bid tick tracks the movements in the bid price of a security over time.

Bid Tick

Blackboard trading involves writing bid and ask prices on chalkboards on the wall of an exchange.

Blackboard trading refers to an outdated practice where exchange trading relied upon handwritten bid and offer prices on blackboards. The advent of electronic trading eventually solved the efficiency problem, making floor trading, and by extension the personnel involved in floor trading such as specialists and runners, practically obsolete. Blackboard trading involved a laborious process whereby trading specialists manually wrote bid and offer prices on huge chalkboards that lined the walls of an exchange. Blackboard trading refers to an outdated practice where exchange trading relied upon handwritten bid and offer prices on blackboards. While a dwindling number of exchanges continue to rely upon floor trading, electronic options generally exist alongside them and carry the bulk of trading volumes.

Blackboard Trading

A block is a large amount of the same security bought or sold by institutional or other large investors. 

FINRA Publishes ATS Block-Size Trade Data

Sophisticated investors reduce costs with block trading

A block refers to a large order of the same security to be bought or sold by institutional or other large investors. Using block trades via block houses allows a fund manager to make the needed transactions in such a way that minimizes the impact on price volatility and achieves a better average price. When institutional investors use block trading to fill a large order over a period, the price will rally or decline accordingly. When a fund manager decides to acquire significant stock or seeks to liquidate substantial stock that is not performing, prudence demands that the transaction be conducted in a way that minimizes the adverse effects on the market price that the overwhelming disparity in supply and demand causes. Asset managers of large mutual funds, retirement funds, hedge funds, banks, and insurance companies take a longer-term view of markets when making investment decisions and take large positions in a stock once the decision is made.

Block

Book-entry securities are investments such as stocks and bonds whose ownership is recorded electronically, eliminating physical certificates.

Book-entry securities are investments such as stocks and bonds whose ownership is recorded electronically. Book-entry securities can also be referred to as uncertificated securities or paperless securities. Book-entry securities are settled by the Depository Trust Company (DTC), which is the Depository Trust & Clearing Corporation’s (DTCC) central securities depository. Stock in direct investment plans, Treasury securities purchased directly from the US Department of the Treasury, and recently issued municipal bonds are held in book-entry form. Individuals who still own old paper securities may exchange them for electronic, book-entry securities.

Book-Entry Securities

Break-even price is the amount of money for which an asset must be sold to cover the costs of acquiring and owning it.

A break-even price is the amount of money, or change in value, for which an asset must be sold to cover the costs of acquiring and owning it. Another way to compute the total breakeven for a firm is to take the gross profit margin divided by total fixed costs:
Business break-even = gross profit margin / fixed costs
​​For an options contract, such as a call or a put, the break-even price is that level in the underlying security that fully covers the option's premium (or cost). To formulate the break-even price, a person simply uses the amount of the total cost of a business or financial activity as the target price to sell a product, service or asset, or trade a financial instrument with the goal to break even. For example, the break-even price of a house would be the sale price at which the owner could cover the home's purchase price, interest paid on the mortgage, hazard insurance, property taxes, maintenance, improvements, closing costs, and real estate sales commissions. In manufacturing, the break-even price is the price at which the cost to manufacture a product is equal to its sale price.

Break-Even Price

In accounting and business, the breakeven point (BEP) is the production level at which total revenues equal total expenses. 

Table of Contents
What s the Breakeven Point (BEP)?
Understanding Breakeven Points
Stock Market Breakeven Points
Options Trade Breakeven Points
Business Breakeven Points The breakeven point (break-even price) for a trade or investment is determined by comparing the market price of an asset to the original cost; the breakeven point is reached when the two prices are equal. For a call buyer, the breakeven point is reached when the underlying is equal to the strike price plus the premium paid, while the BEP for a put position is reached when the underlying is equal to the strike price minus the premium paid. In accounting, the breakeven point is calculated by dividing the fixed costs of production by the price per unit minus the variable costs of production. For instance, the breakeven point in a property would be how much money the homeowner would need to generate from a sale to exactly offset the net purchase price, inclusive of closing costs, taxes, fees, insurance, and interest paid on the mortgage—as well as costs related to maintenance and home improvements.

Breakeven Point (BEP)

A buy quote is one way of describing the best available price to buy a particular security at any given time throughout a trading session.

A buy quote is a number that specifies the next available purchase price for a security. NBBO refers to both the highest bid price that a buyer is willing to pay for a given security and the best available ask price a seller would be willing to accept for a security. The information available will include the security's 52-week range (the highs and lows of the asset's price), the open price, previous day's close, dividend information if applicable, the volume traded, earnings per share (EPS), and the change in price. A buy quote, in forex specifically, is displayed on the right side of the price quote and represents the price at which customers can purchase the base currency. It is what the buyer will pay for when they acquire a security and it operates in conjunction with the best-published ask price, which is the price the seller is willing to offer the security for.

Buy Quote

A buy signal is an event or condition that alerts a person to place a purchase order for an investment.

A buy signal is an event or condition selected by a trader or investor as an alert for entering a purchase order for an investment. For example, contrarian investors may look at a significant sell off as a buy signal since the market may have overreacted, or a value investor may look at a price below net asset value per share as a buy signal. Some of the most common buy signals include:
**Chart Patterns:** Many chart patterns generate a buy signal when the price moves beyond a certain level. For example, a moving average crossover may generate a buy signal, but the trader may look for confirmation in the form of a breakout above a designated price level that implies increase value propositions. While many technical indicators generate buy signals, it's important to note that even the developers of these indicators don't advocate that anyone should blindly use these signals to automatically generate a purchase order.

Buy Signal Confirmation

Buying power is the money an investor has available to buy securities. It equals the total cash held in the brokerage account plus all available margin.

PART 220—Credit by Brokers and Dealers (Regulation T)

Buying power, also referred to as excess equity, is the money an investor has available to buy securities in a trading context. While a trader has to finance 50% of their stock positions in a standard margin account - which provides two times equity in buying power, they only have to fund 25% of the cost of securities purchased in a pattern day trading account – giving the trader four times equity buying power. For example, suppose Sam has $50,000 in a day trading account; they could purchase up to $200,000 worth of open trades within the trading day (50,000 x 4 = $200,000 buying power).
Let’s assume Alex has $100,000 in a brokerage margin account and wants to purchase shares in Apple Inc. (AAPL). Typically, equity margin accounts offer investors twice as much as the cash held in the account, although some forex broker margin accounts offer buying power of up to 50:1. For a non-margin account or cash account, the buying power is equal to the amount of cash in the account.

Buying Power

A call auction happens when participants buy or sell units of a good at a certain time at set buying or selling prices.

A call auction, or call market, is where market participants place orders to buy or sell at certain bid or offered (ask) prices, which are then batched together and matched at predetermined time intervals. The auctioneer will execute limit orders to buy at the clearing price or below and limit orders to sell at the clearing price or above.
Call markets are useful for illiquid securities or assets. Orders batched into call auctions are “priced” orders, meaning all orders are limit orders; there are no market orders involved. The stock's specialist gathers the following buy and sell orders beforehand:
Buy 50 shares at $885
Buy 75 shares at $875
Buy 100 shares at $870
Sell 100 shares at $870
Sell 75 shares at $880
Sell 50 shares at $890 A call auction, or call market, is where market participants place orders to buy or sell at certain bid or offered (ask) prices, which are then batched together and matched at predetermined time intervals.

Call Auction

Cash neutral is a strategy in which an investor manages an investment portfolio without adding capital to it.

Understanding Apple's New 'Net Cash Neutral' Goal

Apple now has $195.57 billion in cash on hand, up $3.7 billion

Table of Contents
Expand Sales and purchases in a cash neutral strategy effectively cancel each other out.
Keeping portfolios cash neutral means having the capital fully deployed in investments at all times. The term cash neutral refers to an investment strategy that involves the sale and purchase of securities in an investment portfolio that results in no net cash. Being cash neutral is an investment strategy involving the sale and purchase of securities in a portfolio that results in no net cash. To achieve its goal of net cash neutral, the company will need to reduce cash through dividends and share repurchases or by increasing its debt by issuing more commercial paper.

Cash Neutral

Cash trading requires that all transactions be paid for by funds available in the account at the time of settlement.

Updated Investor Bulletin: Trading in Cash Accounts

Cash trading requires that all transactions be paid for by funds available in the account at the time of settlement. Cash trading does not involve the use of margin, which means cash trades tend to be safer for brokers than margin trading accounts. For instance, the same dollar gain on a cash account and margin account could represent a difference in percentage return since margin accounts require less money down. When buying securities in a cash account, the investor must deposit cash to settle the trade—or sell an existing position two business days in advance to free up the necessary funds. For example, a cash trading account has $5,000 available cash and $20,000 tied up in ABC stock.

Cash Trading

A cash trigger is a condition that triggers an investor to make a trade, like buying or selling a financial product.

A cash trigger is a condition that triggers an investor to make a trade or take a specific action, such as buying or selling a financial product such as a stock, option, futures contract, bond, or currency. Self-imposed cash triggers are most common among retail investors and include deciding to make a purchase if a stock rises a pre-determined price, or to sell a stock if falls below a specific price.
Market imposed cash triggers can occur on over the counter options, when a transaction or action is taken, or when the price of an asset reaches a certain level.
A cash trigger is called that because it is an action, like a trade, that is triggered and adds cash to your trading account. The stop-loss order gets them out of the trade if the price drops below $15, with $15 being the trigger price as well as the order price in this case. A cash trigger is a condition that triggers an investor to make a trade or take a specific action, such as buying or selling a financial product such as a stock, option, futures contract, bond, or currency. In the case above, instead of placing an order the investor may simply watch the price and then execute a trade manually at the cash trigger level.

Cash Trigger

A central counterparty clearing house (CCP) is an organization that exists in European countries to help facilitate derivatives and equities trading.

A central counterparty clearing house (CCP) is an entity that helps facilitate trading in various European derivatives and equities markets. The CCR report factors in the following considerations:
A CCP’s management capabilities for obligation defaults and related protections
A CCP's business and financial basics
A CCP's operating environment
A CCP's quantitative measurements and qualitative issues, which Moody’s uses when determining a given CCP’s creditworthiness
Blockchain technology, which is described as an incorruptible digital ledger of economic transactions that can be programmed to record financial transactions, arguably represents a new frontier for CCPs. In the U.S., the equivalent of a CCP is known as a derivatives clearing organization (DCO) or a derivatives clearinghouse and is regulated by the Commodity Futures Trading Commission (CFTC).
In January 2016, Moody’s Investors Service made headlines by revealing its new methodology for rating CCPs worldwide. In its _Clearing Counterparty Rating (CCR)_ report, Moody’s evaluates how a CCP may meet its clearing and settlement obligations in an efficient manner, and how much money will likely be lost if a trader defaults on an obligation. A central counterparty clearing house (CCP) is an organization, usually operated by a major bank, that exists in European countries to help facilitate derivatives and equities trading.

Central Counterparty Clearing House—CCP

For a security, the change is the difference between the current price and the previous day's closing price.

In general, a change refers to a price difference that occurs between two points in time. To compare change, analysts divide the change in price by the price in the previous time period. For example, if a company is trading at $10 at the end of the first quarter and $20 at the end of the second quarter, the change in price over the time period is $20 minus $10, or $10. A positive change generally implies improved performance, while a negative change implies declining performance. 2.  For a stock or bond quote, change is the difference between the current price and the last trade of the previous day.

Change

Chasing nickles around dollar bills refers to when a foreign exchange (FX) trader chases the market, or when a business avoids upgrades due to the costs.

Chasing nickles around dollar bills is a slang term for when a foreign exchange (FX) trader pursues a trend in the currency market. Day traders with portfolios of $25,000 or more may be able to chase market profits, but overall, the efficiency of the market’s pricing of currency pairs, and other securities for that matter, makes pursuing short-term gains less attractive. Chasing nickles around dollar bills is a slang term for when a foreign exchange (FX) trader pursues a trend in the currency market. The term may also apply to a company's management focus on trimming small, trivial costs instead of cutting more severe and significant costs.
Chasing nickles around a dollar is a metaphor for losing sight of what's important and focusing too intently on minor details. A countertrend strategy is a speculation method that attempts to make small gains by trading against the current trend through the use of use momentum indicators, reversal patterns and trading ranges to determine the best areas to execute trades.

Chasing Nickles Around Dollar Bills

Chasing the market refers to entering or exiting an investment with the intention of profiting from an occurring development or trend. 

Chasing the market refers to entering or exiting an investment with the intention of profiting from an occurring development or trend. The problem is that market trading mechanisms and the efficiency of the market make it challenging for investors using chase-the-market strategies to identify substantial gains. Retail investors are often better off taking a long-term investing approach rather than chasing the market and attempting to capture gains on short-term trends. For retail investors, the efficiency of the market’s pricing of securities makes chasing short-term profits less attractive than investing with standard long-term goals. While markets are generally considered to be efficient both in valuation and market trading mechanisms, following new developments in the markets overall is what keeps prices fluid and creates profit in both the short and long term.

Chasing the Market

Clearing is when an organization acts as an intermediary to reconcile orders between transacting parties. A clearing bank approves checks for payments. 

Table of Contents
What Is Clearing?
How Clearing Works
Clearing Banks
Clearinghouses
Example of Clearing
Clearing Bank FAQs
The Bottom Line Clearing banks in the United States include the following: Bank of America; Bank of the West; Barclays; The Bank of New York Mellon; BB&T; Capital One; Citi; Citizens; Comeria; Deutsche Bank; AG Consultants, Fifth Third Bank; HSBC; JP Morgan Chase; Key Bank; M&T Bank; MUFG Union Bank; PNC; Regions Bank; Santander; State Street; SunTrust; TD Bank; UBS; U.S. Bank; and Wells Fargo. When a depository institution receives a check drawn on another institution, it may send the check for collection to the institution directly, deliver the check to the institutions through a local clearinghouse exchange, or use the check-collection services of a correspondent institution or a Federal Reserve Bank.
Nearly all the checks the Federal Reserve Banks process for collection are now received as electronic check images, and most checks are collected and settled within one business day.
For futures and options, a clearinghouse functions as an intermediary for the transaction, acting as the implicit counterparty to both the buyer and seller of the future or option. For example, if Bank A owes Bank B $2 million in cleared checks, But Bank B owes Bank A $1 million, Bank A only pays Bank B $1 million. Table of Contents
What Is Clearing?
How Clearing Works
Clearing Banks
Clearinghouses
Example of Clearing
Clearing Bank FAQs
The Bottom Line

Clearing

The close is the end of a trading session in financial markets, the process of exiting a trade, or the final procedure in a financial transaction.

The close is a reference to the end of a trading session in the financial markets when the markets close for the day. **Professional Competition**: Most after-hours traders are professional traders working for hedge funds or investment banks, which makes it hard to compete.
**No Guarantees**: There is no guarantee that after-hours prices reflect a security’s opening price the next day since they are entirely different sessions.
Most traders should stay away from after-hours trading unless they have a lot of experience and a compelling reason to trade after the close. The most common market holidays include:
New Year’s Day
Martin Luther King Jr. Day
Washington’s Birthday
Good Friday
Memorial Day
Thanksgiving Day
The closing price is the price of the final trade before the close of the trading session. Many markets also offer after-hours trading beyond the official close, although traders should exercise caution when transacting outside of traditional market hours. The most visible example of a market close is the close of the New York Stock Exchange (NYSE) when the closing bell is rung, but closing times vary between markets and exchanges.

Close

Closing a position refers to a security transaction that is the opposite of an open position, thereby nullifying it and eliminating the initial exposure.

Closing a position refers to executing a security transaction that is the exact opposite of an open position, thereby nullifying it and eliminating the initial exposure. The initial position that an investor takes on a security is an open position, and this could be either taking a long position or short position on the asset. For example, day traders generally close out trading positions on the same day that they were opened, while a long-term investor may close out a long position in a blue-chip stock many years after the position was first opened. Closing a long position in a security would entail selling it, while closing a short position in a security would involve buying it back. The difference between the price at which the position in a security was opened and the price at which it was closed represents the gross profit or loss on that security position.

Close Position

A closing quote reflects the final regular-hours trading price of a security and indicates to investors and listed companies interest in the security. 

A closing quote is a security's final regular-hours trading price for the day. DMMs set closing prices based on all interest expressed in the stock through closing market and limit orders and also step in to trade to offset any auction imbalances between buyers and sellers present at the closing bell. These funds attempt to track to a particular index and will attempt to reconcile the days trading with the closing quote, so it drives more volume to the closing price for the day. The extension of the trading day outside of standard market hours facilitates the trading of stock around events that typically result in significant price movements, such as the release of quarterly earnings reports, which occur before or after regular trading hours. For the NYSE and Nasdaq, these holidays are New Year's Day, Martin Luther King Jr., Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

Closing Quote

Even in the era of 24-hour trading, there is a closing price for a stock or other asset, and it is the last price it trades at during market hours.

The closing price is the raw price or cash value of the last transacted price in a security before the market officially closes for normal trading. The closing price on one day can be compared to the closing price on the previous day, 30 days earlier or a year earlier, to measure the changes in market sentiment toward that stock. Even in the era of 24-hour trading, there is a closing price for any stock or other security, and it is the final price at which it trades during regular market hours on any given day. When using line graphs to track the price of a stock, the data point most commonly used is the closing price of the stock. Major company announcements related to earnings, stock splits, reverse stock splits, and stock dividends are typically released after the close of the regular trading day in order to give traders a chance to digest the news before acting upon it.

Closing Price

Confluence employs several trading strategies and or ideas as one uniform strategy.

Confluence is the combination of multiple strategies and ideas into one complete strategy. For example, an investment adviser with an aggressive investment client may identify a 20/80 portfolio allocation that requires investing 20% of the portfolio in a risk-averse fixed income component while investing 80% in a high growth equities component. Confluence allows an investment adviser to combine multiple investment strategies into one portfolio that holistically represents the risk profile and goals of a client. This confluence of investing components allows the investment adviser to rely on the performance of the managed account strategy while also managing 40% of the equity portion of the portfolio based on their own individual discretion. The investment adviser may invest 20% of the portfolio in a low-risk bond mutual fund while investing the other 80% in a managed account with a high growth equities strategy.

Confluence

Consolidated tape is an electronic system that collates real-time exchange-listed data, such as price and volume, and disseminates it to investors.

Consolidated tape is an electronic system that collates real-time exchange-listed data, such as price and volume, and disseminates it to investors. Each entry on the consolidated tape displays the stock symbol for each company trading on the exchanges, the number of shares traded (volume), the price per share for each trade, and the current price compared to the previous day's close.
Also known as ticker tape, consolidated tape provides continuous, real-time data generated by various market centers, including stock exchanges, electronic communications networks (ECNs), and third-market broker-dealers.
Through the consolidated tape, various major exchanges, including the New York Stock Exchange (NYSE), the NASDAQ, and the Chicago Board Options Exchange (CBOE), report trades and quotes. Network A reports trades for securities listed on the NYSE, while network B reports trades from NYSE Amex, Bats, ECNs, regional exchanges, and the PHLX options exchange.
Each entry on the consolidated tape displays the stock symbol for each company trading on the exchanges, such as the number of shares traded (volume), the price per share for each trade, a triangle pointing up or down, showing whether the price per share is above or below the previous day’s closing price and another number showing how much higher or lower than trade’s price was than the last closing price. Consolidated tape is an electronic system that collates real-time exchange-listed data, such as price and volume, and disseminates it to investors. Consolidated tape is an electronic system that collates real-time exchange-listed data, such as price and volume, and disseminates it to investors.

Consolidated Tape

Contrarian investing is a type of investment strategy where investors go against current market trends.

Contrarian investing is an investment style in which investors purposefully go against prevailing market trends by selling when others are buying, and buying when most investors are selling.
Contrarian investors believe that people who say the market is going up do so only when they are fully invested and have no further purchasing power. Contrarian investing is similar to value investing because both value and contrarian investors look for stocks whose share price is lower than the intrinsic value of the company. Value investors generally believe that the market overreacts to good and bad news, so they believe that stock price movements in the short term don’t correspond to a company's long-term fundamentals.
Many value investors hold that there is a fine line between value investing and contrarian investing, since both strategies look for undervalued securities to turn a profit based on their reading of the current market sentiment.
The most prominent example of a contrarian investor is Warren Buffett. Contrarian investing is an investment style in which investors purposefully go against prevailing market trends by selling when others are buying, and buying when most investors are selling.
Contrarian investors believe that people who say the market is going up do so only when they are fully invested and have no further purchasing power. In essence, an abundance of pessimism among other investors has pushed the price of the stock below what it should be, and the contrarian investor will buy that before the broader sentiment returns and the share prices rebound. Contrarian investing is built around the idea that the herd instinct that can take control of market direction doesn't make for a good investing strategy.

Contrarian

A core liquidity provider acts as a middleman in the securities markets, buying securities from companies and distributing them for resale to investors.

A core liquidity provider is a financial institution that acts as a middleman in the securities markets. A key characteristic of core liquidity providers is that they continually provide liquidity in all market conditions, not just when they find it advantageous to buy or sell a security. The term core liquidity provider describes the function of these firms: They may simultaneously buy and sell shares of a security with the goal of ensuring that it is always available on-demand. Ideally, the core liquidity provider brings greater price stability to the markets, enabling securities to be distributed on-demand to both retail and institutional investors. The core liquidity provider makes a market for an asset by offering their holdings for sale at any given time while simultaneously buying more of them.

Core Liquidity Provider

A counterparty is the party on the other side of a transaction, as a financial transaction requires at least two parties.

A counterparty is the other party that participates in a financial transaction, and every transaction must have a counterparty in order for the transaction to go through. A counterparty is the other party that participates in a financial transaction, and every transaction must have a counterparty in order for the transaction to go through. However, in many financial transactions, the counterparty is unknown and the counterparty risk is mitigated through the use of clearing firms. However, in many financial transactions, the counterparty is unknown and the counterparty risk is mitigated through the use of clearing firms. Having an idea of your potential counterparty in a given environment can provide insights into how the market is likely to act based on your presence/orders/transactions and other similar style traders.

Counterparty

The term "cover" in the context of finance is used to refer to any number of actions that reduce an investor’s exposure.

The term _cover_ in the context of finance is used to refer to any number of actions that reduce an investor’s exposure. Sell to cover refers to employees with stock options that are in the money cashing them in and then immediately selling a portion of the stock to cover the cost of buying them. Covering is different than closing a position, in that with covering, an investor might choose to keep a position open, but just have enough stock on hand to compensate for any risk. The term cover is different from coverage, which, in the world of finance, refers to insurance coverage in addition to referring to the financial ratios that measure a company's margin of safety in servicing its debt and making dividend payments. In short selling, a cover refers to buying the security you sold short in order to close out the position.

Cover

A crossed market is a situation arising when the bid price of a security exceeds the ask price.

A crossed market is the name traders and market makers give to a circumstance where a market's bid price exceeds its ask price. A crossed market is the name traders and market makers give to a circumstance where a market's bid price exceeds its ask price. A crossed market order occurs when a bid price exceeds an ask price resulting in unfavorable terms for the market maker. A crossed market order occurs when a bid price exceeds an ask price resulting in unfavorable terms for the market maker. Crossed markets usually happen during extremely fast trading conditions in volatile markets, or extremely slow movement in illiquid markets that may create situations where bid prices are higher than ask prices temporarily.

Crossed Market

A cross trade is when a buy and sell order are matched without the transaction being posted to the exchange or made available to other traders.

A cross trade is a practice where buy and sell orders for the same asset are offset without recording the trade on the exchange. For example, if one client wants to sell and another wants to buy, the broker could match those two orders without sending the orders to the stock exchange to be filled but filling them as a cross trade and then reporting the transactions after the fact but in a timely manner and time-stamped with the time and price of the cross. However, cross trades are permitted in select situations, such as when both the buyer and the seller are clients of the same asset manager and the price of the cross trade is considered to be competitive at the time of the trade. While a cross trade does not require each investor to specify a price for the transaction to proceed, matching orders occur when a broker receives a buy and sell order from two different investors both listing the same price. Cross trades are often performed for trades that involve matched buy and sell orders that are linked to a derivatives trade, such as the hedge on a delta-neutral options trade.

Cross Trade

Curbs in is a term used in investing to signify when trading curbs are active. 

Part II: Commodity Futures Trading Commission, 17 CFR, Part 20

Stocks Plunge 508 Points, A Drop of 22.6%, 604 Million Volume Nearly Doubles Record

Curbs in is a phrase used to indicate the temporary condition of a market that may have moved too quickly in one direction. The phrase indicates that trading curbs are in effect and active on one or more securities exchanges; curbs are restrictions or limits on trading a specific security, basket of securities, index, or even the entire market. Since that time, other trading curbs have been instituted and have come in and out of use, including a program trading curbs that lasted for five days in November 2007. Some analysts believe that curbs keep the market artificially volatile by causing momentum when the market hits a limit and trading stops. Curbs are restrictions or limits on trading a specific security, basket of securities, index, or even the entire market.

Curbs In

The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange.

The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange and is the most reliable indicator of that security's present value. These include:
Current value, an accounting method in which assets are priced according to their replacement value rather than their original costs.
Current yield, an estimate of the annual income of an investment that is based on dividing the total income by the current price.
Cash price is the latest quoted price on an exchange and is thus synonymous with current price.
When a security is sold over-the-counter (OTC) rather than on an exchange, the current price is based on the current bid price listed by buyers and the current ask price listed by sellers. The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange and is the most reliable indicator of that security's present value. Current price is an indicator of current value, but the real price of the next sale may be higher or lower depending on supply and demand. If the item is on sale, the current price will be lower than the retail price for that item.

Current Price

Dash to trash refers to a situation where investors rush to invest in a class of securities or other assets, bidding up prices to beyond what is reasonably justified.

Dash to trash is what happens when investors flock to a class of securities or other assets, bidding up prices to a point beyond what can be justified by valuation or other fundamental measures. Dash to trash can refer to any security that investors purchase and bid up the price to a point that does not reflect its true value, however, it is most closely associated with stocks that are of low quality, cheap, and where investors believe a profit is possible. If investors hold on to these assets for a prolonged period of time, they are most likely to witness a loss as the price of the stock comes crashing down to reflect its true value; a point after investors have flocked to it and bid up the price. A bunch of investors rush to invest in the company because of the positive name association, bidding up the price to $15 per share, where more investors continue to purchase the stock, bidding it up to $20, even though the fundamentals of the stock don't place its value anywhere near that high. If investors don't exit a dash-to-trash investment before the asset's upward trend is over, they will most likely incur a loss as the asset's price comes crashing down to a value that is reflective of its fundamentals.

Dash to Trash

A deal ticket, commonly known as a trading ticket, is a record of all the terms, conditions, and basic information of a trade agreement.

A deal ticket, commonly known as a trading ticket, is a record of all the terms, conditions, and basic information of a trade agreement. A deal ticket commonly includes the following information: transaction type, security's name, order type, order duration, quantity, price, commission, names of involved parties, date, and time of transaction. A deal ticket, commonly known as a trading ticket, is a record of all the terms, conditions, and basic information of a trade agreement. A deal ticket, commonly known as a trading ticket, is a record of all the terms, conditions, and basic information of a trade agreement. Type of transaction: Information covers execution of the specific trade and the intention of the trade, including the order to buy, sell, buy to close, or sell short.

Deal Ticket

Decimalization is a system where security prices are quoted using a decimal format rather than fractions.

Commission Notice: Decimals Implementation Plan for the Equities and Options Markets

Testimony Concerning the Effects of Decimalization on the Securities Markets

Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto by the American Stock Exchange LLC Amending Exchange Equities and Options Rules to Provide for Decimal Pricing

Securities Markets: Decimal Pricing Has Contributed to Lower Trading Costs and a More Challenging Trading Environment

Decimalization is a system where security prices are quoted using a decimal format rather than fractions. The New York Stock Exchange and the American Stock Exchange switched to decimalization on Jan. 29, 2001. The U.S. Securities and Exchange Commission (SEC) mandated all exchanges convert to a decimalization system no later than April 9, 2001. The U.S. Securities and Exchange Commission (SEC) ordered all stock markets within the U.S. to convert to decimalization by April 9, 2001. With decimalization, the minimum price movement is now one cent, or $0.01, providing a greater number of price levels and allowing for tighter spreads between the bid and the ask levels for trading instruments.

Decimalization

Definitive securities are securities issued in the form of a paper certificate as opposed to book-entry securities, which are digital.

Tax Equity and Fiscal Responsibility Act of 1982

Apples Issues 2.8 Billion Euros in Euro Bonds

Definitive securities are securities issued with a paper certificate. Even when definitive securities are issued now, they are normally backed up with a digital version, so as to protect against theft or loss.
Bearer bonds, now out of use in the United States, are a type of definitive security, issued on paper and not connected to an investor's name. Bearer bonds were last issued in the United States in 1982 after the Tax Equity and Fiscal Responsibility Act (TEFRA) imposed penalties against their issuers and buyers.﻿﻿ The act effectively put an end to these types of bonds. Bearer bonds are a type of definitive security since they are issued in certificate form and not attached to an investor's name. Investors today see this process as inefficient, a reason why bearer bonds are no longer issued in the U.S., though the primary reason was to prevent fraud.

Definitive Securities

Depressed is a state or condition of a market characterized by slumping prices, low volume, and lack of buyers.

The U.S. housing bubble andbust: impacts on employment

Employment outlook: 2008–18: The U.S. economy to 2018: from recession to recovery

Great Depression and World War II, 1929-1945: Overview

U.S. Worse Off Than Russia, Mexico in 2020 Economic Misery Ranking

Depressed refers to a state or condition of a market, product, currency, or security characterized by slumping prices, low volume, and lack of buyers. Entire economies can also be depressed, the most famous case being the Great Depression, which lasted in the United States from 1929 until the start of World War II.﻿﻿ Economic depressions are characterized by a severe and prolonged contraction of economic output in a particular economy or economies and typically lead to excess supply, lower demand, unemployment, and the bankruptcy of private businesses. In a severely depressed market, like the U.S. real estate market from 2008 to 2012, the market is defined not just by low prices, but also by low transaction volume. Often the conditions which lead to the depressed market, or depressed prices, are due to activities of banking and financial crisis or the drastic change in the political structure of an area. The global market for commodities is one market that saw a depressed movement between 2008 and 2018.﻿﻿ The Dow Jones-UBS Commodity Index lost more than half its value, reflecting a prolonged period of oversupply and declining demand for raw materials.

Depressed

Delivered Ex Ship (DES) is a trade term. It requires sellers to deliver goods to a buyer at an agreed port of arrival. A seller meets its obligation upon delivery of uncleared goods.

Delivered Ex Ship (DES) is different from Delivered Ex Quay (DEQ), which says the seller ships the goods to the wharf at the destination port, and Delivered Ex Works (DEW), which says the seller must have the goods available for pickup at the site of its business. Delivered ex-ship (DES) was a trade term that stated that a seller had to deliver goods to a buyer at a certain port of arrival, as specified in an international shipping contract. Delivered Ex Ship (DES) stipulates that the seller has a legal obligation to deliver the goods to port and to ensure the goods' arrival there, but not to a wharf. Delivered ex-ship (DES) was a trade term that required a seller to deliver goods to a buyer at an agreed port of arrival.

Delivered Ex Ship (DES)

Getting rid of an asset or security through a direct sale or some other method is known as a disposition.

SEC Amends Financial Statement Requirements for Business Acquisitions and Dispositions

A disposition is the act of selling or otherwise "disposing" of an asset or security. If the sale results in any sort of capital gain, then the investor will have to pay capital gains tax on the profits of the sale if they meet the requirements set by the Internal Revenue Service (IRS).
Other types of dispositions include transfers and assignments, where someone legally assigns or transfers particular assets to their family, a charity, or another type of organization. If the disposition is not reported in the financial statements of a company, then pro forma financial statements are required if the disposition meets the requirements of a significance test. For example, if an investor purchased stock for $5,000 and the investment grew to $15,000, the investor can avoid the capital gains tax on their profit by donating it to a charity. If they decide to exit the investment, it would amount to a disposition of that investment—a disposition of shares.

Disposition

Don't Know (DK) is a slang expression for a disputed or rejected trade that is used when there is a discrepancy in the details of a trade. 

https://www.sec.gov/pdf/nasd1/11000ser.pdf

"Don't know (DK)" is a slang expression for an out trade that is used when there is a discrepancy in the details of a trade. A DK'd trade can result when one of the parties to a trade has a dispute or rejects a trade for any number of reasons. When an exchange receives a DK'd trade, it cannot execute the trade because of contradictory information associated with the trade. When firm X delivers the stock to firm XYZ, firm XYZ might reject the trade (DK it) if the terms of the delivery (price, quantity, or specific security) don't match their records, or if the trade is not on their records at all. The exchange's clearing house will not be able to settle a DK'd trade because the terms of the trade are conflicting or inconsistent.

Don't Know (DK)

A downgrade occurs when an analyst's estimates for a stock's outlook turns more negative.

A downgrade is a negative change in the rating of a security. Beyond an outright downgrade event, credit rating agencies and equity valuation shops both publish watchlist or similar lists indicating securities or companies prime for a downgrade. A downgrade refers to a negative change in an analyst's outlook of a particular security's valuation based primarily on that security's improving fundamentals. An analyst may downgrade a stock from a buy to a sell after the issuing company releases information about a Securities and Exchange Commission investigation into the company's operations. The biggest drawback of a downgrade is that it increases a company's cost of capital, for both debt and equity, and often results in an immediate hit to share price.

What Is a Downgrade?

A downtick is a transaction on an exchange that occurs at a price below the previous transaction.

A downtick is a transaction for a financial instrument that occurs at a lower price than the previous transaction. A downtick is a natural part of market fluctuations and can have a number of causes, including an increase in supply over demand for a given stock or a lowered valuation of a company, though a downtick does not necessarily indicate an economic downturn or that a company is performing poorly.
Short selling a stock is not allowed on a downtick, as stipulated by the Securities and Exchange Commission (SEC) uptick rule.
A short sale, or the sale of an asset that a seller does not own, is only permitted when the transaction is entered at a higher price than the previous trade. While the uptick rule was eliminated in 2007, in 2010, the SEC instituted an alternative uptick rule to restrict short selling on a stock price that drops more than 10% in one day. While many of these restrictions are executed when the market experiences a significant downturn, the NYSE used to implement one restriction in a market upturn, which was known as the downtick-uptick test, or Rule 80A, under the NYSE. A downtick refers to a transaction of a financial instrument that occurs at a price lower than the previously transacted price.

Downtick

A drawdown is a peak-to-trough decline during a specific period for an investment, fund, or trading account. Drawdowns help assess risk, compare investments, and are used to monitor trading performance.

Table of Contents
What Is a Drawdown? Most traders view a drawdown as a peak-to-trough metric, while losses typically refer to the purchase price relative to the current or exit price. Stock price drawdowns or market drawdowns should not be confused with a retirement drawdown, which refers to how retirees withdraw funds from their pension or retirement accounts. Many look at the drawdown of their investments, from stocks to mutual funds, and consider their maximum drawdown (MDD) so they can potentially avoid those investments with the biggest historical drawdowns. 1:08
A drawdown refers to how much an investment or trading account is down from the peak before it recovers back to the peak.

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