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
Category: Trading
Pink Sheet Stocks
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
3 Trade Order Types: Day, GTC, Limit, and Stop-Loss Orders
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 Types There are three main types of trade orders listed below: Day/GTC orders Limit orders Stop-loss
Payment for Order Flow
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
Stock Opening Prices
The previous day’s close, as well as any after-hour trading in a security may have significant effects on the opening price, but that isn’t the whole story. Here’s a quick summary of how the process for determining the opening price works. The basic problem is that the closing price from the previous trading day is
Over The Counter (OTC) Stock Trading
How to Trade Stocks Off Exchange Anyone can trade stocks off the current set of stock exchanges, if only on a person-to-person deal. This is not a far cry from the original trading under the Buttonwood tree in New York in the 18th century. Today, over 20% of the total volume on stocks traded on
Can Non-US Citizens Trade US Stocks?
Non-Resident Aliens and US Exchanges It is perfectly legal for non-resident aliens to trade equities on exchanges in the United States using US brokerage houses directly. (A “non-resident alien” (NRA) is the US government’s name for a citizen of a country other than the US who also lives outside the US.) The current surge in
How to Buy and Sell Stock Without a Broker
Yes, you can buy/sell stock from/to a friend, relative or acquaintance without going through a broker. Call the company, talk to their investor relations person, and ask who the Transfer Agent for the stock is. The Transfer Agent is the person who accomplishes the transfer, i.e., by issuing new certificates with the buyer’s name on
NASD Public Disclosure Hotline
The number for the NASD Public Disclosure Hotline is (800) 289-9999. They will send you information about cases in which a broker was found guilty of violating the law. I believe that the information that the NASD provides has been enhanced to include pending cases. In the past, they could only mention cases in which
Stock Trading Glossary
Stock Trading Jargon and Terminology Some common jargon that you should understand about trading equities is explained here briefly. See other articles in the FAQ for more detailed explanations on most of these terms. AON, “all or none” A buy or sell order with this designation loses normal order priority if the amount of shares