Securities Markets

Question 1

OATS

Answer 1

Order audit trail system - tracks life of order entered OTC both listed and unlisted

Question 2

GTC

Answer 2

Good Till Cancelled - expired last day of April or October

NYSE and Nasdaq no longer allow

Question 3

SEC act of 1934 regulates:

Answer 3

Exchanges
Margin
Registration
Price manipulation

Question 4

Stop limit order

Answer 4

Combination of both stop and limit orders, a first, then process

Question 5

ACT

Answer 5

Automated confirmation transaction system - verifies details of all ORC transactions After execution

Question 6

Limit orders

Answer 6

Executed at specific price or better

Question 7

Manning rule

Answer 7

Customer Limit order protection rule, must execute order w/in 60 seconds, fill customer orders upto as many shares executed for own acct

Question 8

Stop orders

Answer 8

Used for protection, only available through OTC, triggers then executes immediately

Question 9

Exchanges

Answer 9

Auction markets, centralized trading, trading floor

Question 10

AON

Answer 10

All Or Nothing - entire order executed same time, same price

Cannot break it up

Question 11

Secondary market

Answer 11

Exchange or OTC

4 categories:
1st mkt - listed, on an exchange
2nd mkt - unlisted, OTC
3rd mkt - listed, OTC
4th mkt - ECN

Question 12

Market order

Answer 12

Buy or sell a security, immediately, at best price available

Question 13

Consolidated tape

Answer 13

Reports trades of Listed securities on different markets

Includes exchanges mkt and 3rd & 4th mkt,

does not include primary mkt or options mkt or bonds

ALREADY EXECUTED

Question 14

SEC rule 104 stabilization

Answer 14

UW can buyback at or below POP for stabilization, no time limit

Question 15

Stopping stock

Answer 15

DMm guarantees price up to 2 minutes

Question 16

FOK

Answer 16

Fill or Kill - entire order executed, same time, same price or cancelled

Cannot be broken up

Question 17

ECN

Answer 17

Electronic communication network - 24 hrs, lower cost, more liquidity

Question 18

BLiSS

Answer 18

Stretch

Question 19

Inside market

Answer 19

Highest bid, lowest ask

Question 20

Threshold security

Answer 20

Heavily borrowed, difficult to borrow

Question 21

SEC rule 201 stock decline

Answer 21

10% stock decline - no more short selling the following day

Question 22

SLoBS

Answer 22

Stretch

Question 23

Broker

Answer 23

Stretch

Question 24

Size of the market

Answer 24

Shares available at the highest bid and the lowest ask

Question 25

Spread

Answer 25

Difference between highest bid and lowest ask

Question 26

Types of quotes

Answer 26

1. Firm - market maker, guaranteed execution, used for OTC, exchanges 2. Subject - nominal, subject to change, not guaranteed 3. Fast market - high level of trading/volatility, may sell lower or higher 4. Firm w/recall - i.e. 1 hr 5 min recall, give another dealer a chance to sell

Question 27

OTC

Answer 27

Negotiated markets, no location, no electronic exchange, brokerage to brokerage Any security may trade otc

Question 28

NASDAQ access levels

Answer 28

1. Shows inside market 2. Quotes by all mkt makers 3. Mkt maker entry

Question 29

IOC

Answer 29

Execute as much is possible and cancel the rest Can be broken up

Question 30

Day order

Answer 30

Cancelled by end of day

Question 31

Selling short against the box

Answer 31

Shorting a security you own for tax deferral

Question 32

CQS

Answer 32

Consolidated Quotation Service - lists all OPEN TRADES, listed, bid/ask, all mkts All trades reported w/in 10 seconds of execution

Question 33

Order of trading

Answer 33

1. Priority - price 2. Parity - time 3. Precedence - size

Question 34

Dealer

Answer 34

Stretch

Question 35

UTP

Answer 35

Universal trading platform - keeps track of all stop and limit orders

Question 36

OTC pink mkt

Answer 36

Electronic quotes are firm Printed are subject Not an exchange No 10k or 10q

Question 37

How long must UW keep prospectus available after public offering becomes available

Answer 37

40 days

Question 38

Reverse split impact on orders

Answer 38

All orders cancelled i.e 1 for 2