Size of the Market The “size of the market” refers to the number of shares that a specialist or market maker is ready to buy or sell. This number is quoted in round lots of 100 shares; i.e., the last two zeros are dropped. The size of the market information is supplied with a quote
Short sale against the box, or simply short against the box, is the act of selling short securities that you already own. For example, if you own 200 shares of FON and tell your broker to sell short 200 shares of FON, you have shorted against the box. Note that when you short against the
What is Shorting Stock? Shorting means to sell something you don’t own. If I do not own shares of IBM stock but I ask my broker to sell short 100 shares of IBM I have committed shorting. In broker’s lingo, I have established a short position in IBM of 100 shares. Or, to really confuse
This article lists some of the identification systems used to assign unique numbers to securities that are traded on the various exchanges around the world. CUSIP A numbering system used to identify securities issued by U.S. and Canadian companies. Every stock, bond, and other security has a unique, 9-digit CUSIP number chosen according to this
There are some advantages to buying round lots, i.e., multiples of 100 shares, but if they don’t apply to you, then don’t worry about it. Possible limitations on odd lots (i.e., lots that are not multiples of 100) are the following: The broker might add 1/8 of a point to the price — but usually
Transaction notices from any broker will generally show a date called the process date. This is when the trade went through the broker’s computer. This date is nearly always the same as the trade date, but there are exceptions. One exception is an IPO; the IPO reservation could be made a week in advance and
In a nutshell, price improvement means that your broker filled an order at a price better than you might have expected from the bid and asked prices prevailing at the time you placed the order. More concretely, you were able to pay less than the asked price if you bought, and you received better than
A company whose shares are traded on the so-called “pink sheets” is commonly one that does not meet the minimal criteria for capitalization and number of shareholders that are required by the NASDAQ and OTC and most exchanges to be listed there. The “pink sheet” designation is a holdover from the days when the quotes
Day/GTC orders, limit orders, and stop-loss orders are three different types of orders you can place in the financial markets. This article concentrates on stocks. Each type of order has its own purpose and can be combined. Trade Order TypesContents There are three main types of trade orders listed below: Day/GTC orders Limit orders Stop-loss
Order Routing and Payment for Order Flow A common practice among brokerage firms is to route orders to certain market makers. These market makers then “rebate” 1 to 4 cents per share back to the brokerage firm in exchange for the flow of orders. These payments are known as “payment for order flow” (PFOF). (The