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correction Any price reaction within the market leading to an adjustment by as much as one-third to two-thirds of the previous gain. |
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cover To repurchase a previously sold contract. |
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crash A precipitous drop in market prices or economic conditions. |
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crossed market When one broker's bid is higher than another's lowest offer, or vice versa. While crossed markets sometimes occur, the National Association of Securities Dealers Automated Quotations prohibits brokers from intentionally crossing the market. |
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currency Any form of money that is in public circulation. |
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daily range The difference between the high and low price during one trading day. |
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DAX A price-weighted index of the 100 most heavily traded stocks in the German market. |
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day order An order that is canceled if it is not executed on the day it is entered. |
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day trader Originally, an individual who would not take the exposure of an open position overnight. The term is now also used to refer to an active stock trader who holds positions for a very short time and makes several trades each day. |
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dealer An individual or entity, such as a securities firm, when it acts as a principal and stands ready to buy and sell for its own account. More generally, an individual or entity that buys and sells products and holds an inventory. |
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dealer market Exchanges like the Nasdaq are dealer or negotiated markets; they have no physical trading floor. Dealers post prices and execute orders for securities electronically. In theory, a dealer market should help an investor get the ''best price." They afford day traders the ability to instantly identify and access the best market prices. |
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depth of market The number of shares of a security that can be bought or sold without causing an appreciable change in price. |
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display rule SEC regulation mandating that dealers must modify their quotes to represent the price and size of customer limit orders that would improve or equal their bid or offer. Requires market makers to publish immediately a bid or offer that reflects the price and full size of each customer limit order they hold that is priced better than their current quote. |
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dividend Distribution of a portion of a company's earnings, cash flow, or capital to shareholders, in cash or additional stock. |
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Dow Jones Industrial Average (DJIA) The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip NYSE stocks, primarily industrials. Also called the Dow. |
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downgrade A negative change in ratings for a security; two common examples are an analyst's downgrading a stock (such as from "buy" to "sell") and a credit bureau's downgrading of a bond. Opposite of upgrade. |
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downside The potential for loss for a given investment or activity. |
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