Unit 16/17

sell 600 shares for $17 per share Customers can purchase at the offer (the lowest price someone else is willing to sell) and sell at the bid (the most someone else is willing to sell). With this in mind, the customer can buy up to 1,200 shares at $17.25 or sell up to 600 shares at $17

A customer is given a quote for ABC as: 17.00 - 17.25 6 × 12. This quote indicates the customer can

April; October

All GTC orders if unexecuted will be automatically canceled on the last business day of ______ and _______

drops to or through

Sell stop and sell stop limit orders are not triggered until the market _______________________ the stop price

known as a naked short sale and is prohibited.

Selling shares not yet borrowed or located to be borrowed is

Buys or sells

Stop or stop limit orders can be either ___ or ____.

Market

Stop orders become _________ orders once triggered

definition of the size of the quote

The number of shares the broker-dealer is willing to buy or sell at that price

100 Shares according to FINRA rule

Unless otherwise specified, the size of a firm quote is

Selling Long

When a customer owns a position and then sells that position, that is referred to as ___________ or selling to close.

the customer may still enter orders A trading authorization or limited power of attorney needed Not full power of attorney

With a discretionary account

Sell ABC to open; Because there are no other positions, this would be an opening transaction and selling the stock would be bearish

Your client, Alice Tate, with no other positions in her margin account, is bearish on ABC stock. Which of the following transactions would you recommend?

Good-til-canceled

_______________ orders historically have been canceled the end of April and October some firms will cancel them more frequently but for the order to stay in effect longer than six months the customer would need to reinstate the order

Sell limit orders

__________________ are placed above the current market price and fill at the stated price or higher

Sell stop orders

_____________________ are placed below the current market price and become market orders once the price touches or passes through the stop price.

Buy limit orders

________________________ are placed below the current market price and fill at the stated price or lower.

Market orders

always get the next available price, regardless of if it is a buy or sell and regardless of price

A buy stop order

becomes a market order and fills at the next available price once it touches or passes through the stop price

The spread

is computed as the difference between the lowest ask and the highest bid

The inside quote

is the highest bid (the highest price someone is willing to buy) paired with the lowest offer, or ask (the lowest price someone is willing to sell)

The inside bid

is the highest bid, or the most someone is willing to pay

Short against the box

is when a customer owns the shares she wants to sell but borrows some additional shares, sells the borrowed shares, and then covers the short position with shares already owned

Sell

stop limit orders become orders to _____ at the specified limit once triggered

Buy XYZ to open a long position; Caleb has no existing position. This would be an opening transaction and if bullish on the stock it would be a purchase

Caleb McCann got a tip from his brother Nate on XYZ stock two months ago Caleb hasn't previously been investing in the stock market but has been watching this stock since he got the tip from his brother. Caleb is now very bullish on XYZ and wants to place a trade. What would you recommend?

6 months

How long can a good 'til canceled order remain in force without being reconfirmed by the customer?

discretionary order

Each ___________________ must be identified as such at the time it is entered for execution - a principal, officer or a partner of the BROKER-DEALER must approve each order promptly and in writing, but not necessarily before order entry - a record must be kept of all transactions including discretionary ones - it is subject to frequent and systematic review by a designated supervisor or manager

Unsolicited

For a trade to be ____________ the client would need to specifically identify the bonds they wanted to purchase

ask; bid

Investors pay the current ___ price when purchasing and receive the current ___ price when selling

After

It is required that for a discretionary account, a pricipal approves the trade promptly _________ the trade

Bid; Ask

The broker-dealer buys at the ____ and sells at the ____

Ask; Bid

The customer buys at the ___ and sells at the ___