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Flashcards in Trading & Brokerage Deck (14):
1

Market Making

Profit by buying the securities and selling it to the clients and profit from the bid/ask spread

2

What's a short-selling technique?

Borrow the shares from an investment bank and pay the commission and sell it in the market. Six months later, when it's time to give the share back to the investment bank, you buy it from the market and give it to them

3

Financial Instruments traded by Investment Banks

Equity,

4

Bluechip stocks?

Well recognized, large and established companies

5

Who are investment grade companies?

Companies that received high ratings from the credit rating agencies

6

What's the minimum market capitalization of a bluechip company?

5 Billion Dollars

7

What's the capitalization of a mid cap stock

Between 2 and 5 Billion Dollars

8

What's the capitalization of a small cap stock

Less than 2 Billion Dollars

9

Who are the typical investors in blue chip companies

Mutual and pension funds

10

What's fixed income

Bonds issued by Government and Companies

11

Credit for country issuing bonds...

Credit rating agency track the credibility of government and macroeconomic and assign a rating

12

Who are the typical buyers of government bonds

Mutual funds, pension funds and insurance companies

13

What are considered the traditional asset classes?

Stocks and Bonds

14

What are derivative contracts?

Like Options, futures, forwards and swaps