Market Mechanics Flashcards
1
Q
What is a stock order?
A
Buy / Sell Symbol Number Shares Limit or Market Order Price
2
Q
Market Order
A
Accept current price of market
3
Q
Limit Order
A
Only buy / sell when market reaches a certain point
4
Q
The Order Book
A
Compilation of Bids / Asks for a number of stocks at a given price used to track orders
5
Q
Ask
A
Sell Request
6
Q
Bid
A
Buy Request
7
Q
How do Hedge Funds Exploit Market?
A
HF observes order book
HF Buys (stock goes up)
HF Sells
HF sees order book sooner because it’s located closer, enabling it to react to market changes faster
8
Q
Short Selling
A
Borrowing shares from someone to sell to another, assuming price will drop (you keep the extra)
