Trading Channel

Trading Channel

When charting the price of an asset, this is the space on the chart between an asset's support and resistance levels. The price of the asset will stay within the support and resistance levels until a breakout occurs. Range traders will buy an asset when its price is near the bottom of the trading channel and sell it when the price gets close to the top of the trading channel, making a profit on the price spread. Trading channels may be flat, ascending or descending.

Trading Desk

Trading Desk

A desk where transactions for buying and selling securities occur. Trading desks can be found in most organizations (banks, finance companies, etc.) involved in trading investment instruments such as equities, fixed-income securities, futures, commodities and foreign exchange. A trading desk provides traders with access to instantaneous trade executions. Also known as "dealing desk". Trading desks can be either large or small depending on the organization and are occupied by licensed traders, usually specializing in trading one particular type of investment product (e.g. forex traders, commodities traders, stock traders, etc.). The instantaneous trade executions can be particularly important for day traders looking for arbitrage opportunities that usually last only minutes or even seconds.

Term Securities Lending Facility

Term Securities Lending Facility

A lending facility through the Federal Reserve that allows primary dealers to borrow Treasury securities on a 28-day term by pledging eligible collateral. The eligible securities under the term securities lending facility include 'AAA' to 'Aaa' rated mortgage-backed securities (MBS) not under review for downgrade, and all securities eligible for tri-party repurchase agreements. In exchange for this collateral, the primary dealers receive a basket of Treasury general collateral, which includes Treasury bills, notes, bonds and inflation-indexed securities form the Fed's system open market account.

Trading Range

Trading Range

The spread between the high and low prices traded during a period of time. When a stock breaks through or falls below its trading range after several days of trading in a range, it usually means there is momentum (positive or negative) building.

Trading Ahead

Trading Ahead

A trade transacted from a specialist's account even though there is a public order that offsets the trade. Trading ahead is a violation of a specialist's negative obligation to New York Stock Exchange customers. By trading from his or her own account rather than letting public orders match one another, the specialist is robbing the public of its opportunity to transact the security.

Stock Ahead

Stock Ahead

A situation in which an order is placed, but not executed, because of a previously sent order involving the same price. Depending on the exchange's priority rules, this can also happen when two bids are made at the same time with identical prices; only the larger order will be executed. For example, if two orders - one for 1,000 shares, the other for 500 shares - are placed for XYZ stock at the same price, the order for 1,000 shares would be executed and the order for 500 shares would not be made because there was a "stock ahead".

Payment Concentration

Payment Concentration

The process that takes payments from multiple banks and payment networks and consolidates them into one bank.

100 Fastest-growing companies

100 Fastest-growing companies
1.	Research In Motion
2.	Sigma Designs
3.	Sohu.com
4.	Ebix
5.	DG FastChannel
For Complete Detailed List...

 

Backtesting

Backtesting

The process of testing a trading strategy on prior time periods. Instead of applying a strategy for the time period forward, which could take years, a trader can do a simulation of his or her trading strategy on relevant past data in order to gauge the its effectiveness. Most technical-analysis strategies are tested with this approach. When you backtest a theory, the results achieved are highly dependent on the movements of the tested period. Backtesting a theory assumes that what happens in the past will happen in the future, and this assumption can cause potential risks for the strategy. For example, say you want to test a strategy based on the notion that Internet IPOs outperform the overall market. If you were to test this strategy during the dotcom boom years in the late 90s, the strategy would outperform the market significantly. However, trying the same strategy after the bubble burst would result in dismal returns. As you'll frequently hear: "past performance does not necessarily guarantee future returns".

Paper Trade

Paper Trade

Simulated trading that investors use to practice mimicking trades (buys and sells) without actually entering into any monetary transactions. Paper trading is a good way to learn the ropes without risking any money. You can do it simply by pretending to buy and sell stock, bonds, commodities and mutual funds and keeping notes of paper profits or losses. Or you can open an account with an online market simulator.

 

Pairs Trade

Pairs Trade

The strategy of matching a long position with a short position in two stocks of the same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing on the two stocks; the stock you are long in versus the stock you are short in. It's the ultimate strategy for stock pickers, because stock picking is all that counts. What the actual market does won't matter (much). If the market or the sector moves in one direction or the other, the gain on the long stock is offset by a loss on the short.

Post-Trade Processing

Post-Trade Processing

After a trade is complete, it goes through post-trade processing, where the buyer and the seller compare trade details, approve the transaction, change records of ownership and arrange for the transfer of securities and cash. Post-Trade processing is especially important in markets that are not standardized such as the over-the-counter (OTC) market. Post-trade processing is important in that it verifies the details of a transactions. Markets and prices move fast so at the time transactions must be executed quickly. Since many securities trades are done over the phone from party to party the ability for mistakes and human error exists. Post-trade processing allows the buyer and seller of securities to verify trade details or sort out any mistakes.

Out Trade

Out Trade

A trade that cannot be cleared by the associated exchange clearing house because of discrepancies between the data submitted by both parties on the opposite sides of a transaction. When an out trade occurs, it is returned to the two parties affected in order to have the inconsistency reconciled. Should the matter be resolved, the trade is resubmitted to the clearing house. If the matter cannot be resolved, it is then forwarded to the appropriate exchange committee for dispute settlements.

Regular-Way Trade - RW

Regular-Way Trade - RW

A type of trade that is settled through the regular settlement cycle required for the particular investment being traded. The settlement cycle is the time that the regulations of the securities market allows for the buyer to complete payment and for the seller to deliver the goods being purchased. The settlement cycle differs for different assets. Most trades are regular-way trades.

 

Sector ETF

Sector ETF

A class of exchange-traded fund that invests in the stocks and securities of a specific sector, typically identified in the fund title. Most sector ETFs focus on U.S.-based stocks, but several will invest globally in an attempt to capture the worldwide performance of the given sector. Assets will be passively managed around an underlying index; several use indexes provided from data services like S&P and Dow Jones. Leveraged sector ETFs are also available, which aim to achieve double the return of the underlying index, both on advancing and declining trading days.

 

Correction

Correction

A reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index. Corrections are generally temporary price declines, interrupting an uptrend in the market or asset.

 

Trade Resumption

Trade Resumption

To resume trading activities after having been shut down (halted) for some period of time. This can relate to trading between nations, or the resumption of open-market trading in a security such as a common stock or even an entire exchange.   Trading will be halted in a security if there is material information that needs time to disseminate, or fundamental questions have been raised about the reliability of previously-released information.

 

UN/EDIFACT

UN/EDIFACT

The United Nation's body that sets and administers international standards for Electronic Data Interchange usage.

 

Liquidity Path

Liquidity Path

The path taken by a company to provide liquidity for company founders or owners. The most common liquidity paths are through mergers and acquisitions to a larger company, and through initial public offerings (IPOs) of stock to investors.   This is a way of referring to the process of taking a company public. Without a path to liquidity, private company owners may not be able to convert their ownership in the company to any other means of currency or investment.

 

Panic Buying

Panic Buying

A situation in which prevailing interest rates are low and savings rates are high, making monetary policy ineffective. In a liquidity trap, consumers choose to avoid bonds and keep their funds in savings because of the prevailing belief that interest rates will soon rise. Because bonds have an inverse relationship to interest rates, many consumers do not want to hold an asset with a price that is expected to decline.