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brokerage Used interchangeably with broker when referring to a firm rather than an individual. Also called brokerage house or brokerage firm. |
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broker/dealer Any individual or firm, other than a bank, which is in the business of buying and selling securities for itself and others. Called an agent or broker when buying securities and a principal or dealer when selling them. Broker/dealers must register with the SEC as well as with the states in which they conduct business. |
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bull A person who expects the stock market to rise or the economy to accelerate. An investor who believes that a particular security, sector, or the overall market is about to rise. (Opposite of bear.) |
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bull market A prolonged period of rising prices, usually by 20 percent or more. A market that is on a consistent upward trend. A long-term rise in security prices. |
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bullish An attitude by traders who think prices are headed higher, whether pertaining to a particular stock or the market in general. |
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buy A term used by traders to indicate that they are bullish on a particular stock or the market in general. |
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buyout Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buyout is done with borrowed money. |
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buying power The total volume of open stock positions a trader may have at any one time. To calculate buying power, simply subtract the maintenance reserve from the cash equity in the account to find the excess maintenance. Excess maintenance is the amount of capital that is available for trading. Excess maintenance times two equals buying power. |
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CAC 40 Index of 40 leading stocks traded on the Paris Stock Exchange. |
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candlestick Japanese candlesticks is an art form that has been passed down from the 1600s, when it was used to trade Japanese rice futures. The name candlesticks is used because the resulting chart holds what looks like a series of candles with wicks. Plotting the daily candlestick line requires the daily open, high, low, and closing prices. The thick part of the candlestick is known as the real body and represents the range between the open and close prices. The longer or shorter the real body, the more bearish or bullish the market, respectively, because the length of the real body represents the distance in number of points from the open to the close price. The thin lines protruding from either side of the candle are called shadows. |
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capitalization The amount of money in the underlying stock of a company. |
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cash account A brokerage account in which the customer is required by SEC Regulation T to pay the full amount due by the settlement date for securities purchased; buying on margin is not permitted. Also called special cash account. Some types of accounts, such as IRAs and custodian for minor accounts, must be cash accounts. |
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channel The area between two parallel lines that contains prices. These lines are drawn across the edges of congestion zones, leaving out extreme prices |
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