Chapter 9 Flashcards
What is a cash account?
+its a basic investment account
+ do not allow the usage of borrowed money to purchase securities
+ Must make full payment before maturity date
What is a margin accout?
Its the ID/brokerage firm that lends money to buy the securities
+ client must pay part of the security price
+ interest is charged on money owed
what does long position mean?
Its when you own the security
What does short position mean?
When you sell the securities
What is margin and what happens if it falls below level
Its the difference between market value and borrowed funds and they get a margin call which requires the borrower to pay money owed if not they sell the security
What is the short position?
When an investor sell a borrowed security to buy back at a lower price and earn the difference
What is a market order
Order executed at best available price
What is a limit order
A limit order is executed only at a specified price
What is a day order
makret order is only valid for a day
What is a GTC order
Good till cancelled is an order that remains until a specific date or executed
What is a AON order
All or none is when the order is executed when all shares for that order is bought
What is a APR order
An any part order is the opposite of all or none (accepts any amount of shares to go through)
What is a good through order
Only avilable for a specific period of time
What is a stop loss order
its a market order that occurs when a price drops below a certain level
What is a stop buy order
its a market order that occurs when a price rises above below a certain level
