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What is a Range Order?

A "Range Order" lets the trader enter two orders at once. If long a stock, the range order would entail a Sell Stop order below the market (end the pain) and a Sell order (enjoy the gain) above the market. If short a stock, the range order would entail a Buy Stop order above the market (end the pain) and a Buy order (enjoy the gain) below the market.

By Moe S.

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What is a margin call?

For traders and investors, your margin account balance has to stay above a certain level known as a maintenance margin. If your account dips below this level, you will get a margin call, which means that your broker will be annoying you with e-mails and phone calls to bring your account up to or above the maintenance margin level.

By Bill W.

What is a publicly traded company?

Very simple. A company is considered a publicly traded company if it has raised money by selling its own stock to the general public in the form of an initial public offering (IPO). Once its' stock is sold to the general public, it can be resold infinitely from one investor to another. For this reason, stock exchanges were created to facilitate this process of continuous buying and selling.

By Bill W.

What is a daily loss limit?

TradeZero offers risk tools which enables a daily loss limit to your trading account. This tool can prevent you from making you from breaking your trading rules and by pass your daily losses.

By Moe S.

On taking profits and limiting exposure

One of the biggest problems in Day Trading is the inability to know when to take your losses and get out of a position. When someone shorts a stock and is looking for a profit of $1-2 you must also have a reasonable expectation on what you are willing to lose. To many times I see clients let their short positions ride well beyond where they should have gotten out. One way to avoid blowing up your account with a bad position is to use the TradeZero range orders. By doing this you can set up your profit price as well as your loss limits and avoid that one trade that blows up your account.

By Randy B.

What is Reg - T?

In a nutshell, the Federal Reserve Board created this rule to protect investors against amplified loss. Its goal was to regulate Cash accounts and the amount of credit brokerages can lend to investors for the purchase of securities. Currently, investors may borrow up to 50% of the purchase price of securities held overnight while the remainder must be paid for with cash.

By Bill W.

Why do some people call brokerage firms a broker/dealers?

As the name implies, a brokerage firm can act as both broker and dealer. If your broker decides to trade for you, then he is a broker. If your broker trades for itself, then it is a dealer. Easy Right!

By Bill W.

Bulls and Bears

Bull and the Bear are terms used to refer to investors perspective outlook of the market. A bullish outlook is an outlook that is optimistic (stock prices rising), while a bearish outlook means pessimistic (stock prices dropping). A bullish market refers to a scenario where the economy is experiencing growth, typically defined as a time period where prices are steadily increasing. Being bullish means you are optimistic that prices will go higher from where they currently are, while being bearish is the opposite; you think prices will trade lower from where they currently are. Bullish traders will look to take long positions by either buying stocks, call options or any other financial instrument that will appreciate as prices go up. Bearish traders are looking to take short positions where they will profit if the market or stock goes down from its current price. An old Wall Street saying that should be remembered is "Bulls make money, Bears make money, but Pigs get slaughtered".

John G.

What is an exchange traded fund (ETF)?

They are always mentioned in the business news. An exchange traded fund (ETF) is a basket of securities that can be traded throughout the day like a regular common stock. Often times, they are used to track certain industries and/or sectors. For example, a technology ETF would be comprised of different technology stocks inside the fund and is best used to track the technology sector. Why would anyone buy a technology ETF or any type of ETF? A person can be lazy and doesn't want to do the research on individual stocks. Also, it is more cost effective to buy a single ETF comprised of 10 different technology stocks, than to buy them individually.

By Randy B.