to a cup and handle formation, but the saucer base is shallower and
rounder in shape and is not associated with the “cup”.
predictable price pattern based on historical analysis of
seasonal price tendencies.
Distribution or Offering
redistribution of a block of stock some time after it has been sold by
the issuing company. The
sale is handled off the exchanges by a securities firm or group of
firms, and the shares are usually offered at a fixed price that is
related to the current market price of the stock.
market where previously issued securities are bought and sold.
mutual fund that concentrates on trading a range of securities within a
broad industry group, such as technology, energy or financial services.
very long-term trend encompassing several business cycles. Secular
trends t7ypically last form 7-25-years or even longer.
or preferred stock; a bond of a corporation or government.
a security and then borrowing it with the intent of replacing it at a
lower price. Selling short
in a futures market occurs when the trader enters a position by assuming
responsibility of the seller.
scaling is used on the y or vertical axis to compare relative price
changes rather than physical point changes in price. Each vertical
distance measures a specific percentage move in the price, (1 inch
represents a doubling, 1/2inch represents a 10% price move etc.. This
compares to arithmetic scaling where a specific vertical distance
represents a specific absolute price change, 5 points, $10 etc.
last price paid for a commodity on any trading day. Also referred to as
settle or closing price.
risk of possible default by a counter-party at the time of settlement.
candlestick in which the shadows are almost or completely non-existent.
process of buying back stock that has already been sold short.
that have been sold short but not yet repurchased.
ratio that indicates the number of trading days required to repurchase
all of the shares that have been sold short for a specific security or
for all the securities listed on a particular exchange over a given time
(usually a month). For example. a short interest ratio of
2.0 would indicate that it would take 2-days, based on the
previous month’s volume to cover all shorts. A high short interest is
considered bullish because it represents stock that has to be purchased.
A high ratio also indicates pessimism and from a contrary aspect is also
bullish. This used to be a widely followed indicator, but the widespread
use of options and index futures have distorted the numbers.
total amount of short sales outstanding on a specific exchange at a
particular time. The short
position is published monthly.
selling is normally a speculative operation undertaken in the belief
that the price of the shares will fall.
It is accomplished by borrowing stock from a broker in order to
sell shares one does not own. Most
stock exchanges prohibit the short sale of a security below the price at
which the last board was traded.
wave whose amplitude varies as the sine of a linear function of time.
triggering devise used to generate buy and sell signals. Used most
commonly in conjunction with the MACD indicator.
arithmetic mean or average of a series of prices over a specific period
of time. Technicians use crossovers of the moving average by the price
to generate buy and sell signals.
mathematical technique that removes excess volatility and attempts to
reflect the underlying price trend.
trader on the market floor assigned to fill bids/orders in a specific
stock out of his/her own account when the order has no competing
bid/order to ensure a fair and orderly market.
participants who try to profit from buying and selling futures and
options contracts by anticipating future price movements. They assume
market price risk and add liquidity and capital to the futures markets.
nearby or front month of a futures contract.
the cash price.
trade in which two related contracts/stocks/bonds/options are traded to
exploit the relative differences in price change between the two.
positive square root of the expected value of the square of the
difference between a random variable and its mean. A measure of the
fluctuation in a stock's monthly return over the preceding year.
developed by George Lane and is an oscillator
that compares today's price to a preset window of high and low
prices. The calculation results in a an indicator that is plotted
between 0 and 100. Stochastics can be plotted for any time span and are
to measure and report value changes of a selected group of stocks. How
it is done depends on its composition–the sampling of stocks, the
weighing of individual stocks, and the method of averaging used to
establish an index.
A futures contract that uses a market index as the underlying instrument. The delivery mechanism is usually cash settlement.
and Reverse (SAR)
stop that, when hit, is a signal to reverse the current trading
position. (Also known as reversal stop).
stop order variation in which a trade must be executed at the exact
price or better. If the order cannot be executed, it is held until the
stated price or better is reached again.
order to buy or sell when the market reaches a specified point. A stop
order to buy becomes a market order when the futures contract trades (or
is bid) at or above the stop price. A stop order to sell becomes a
market order when the futures contract trades (or is offered) at or
below the stop price.
risk management technique in which an order is entered with a broker to
liquidate a position if the price reaches a specified level.
price per unit at which the holder of an option may receive or deliver
the underlying unit; also known as the exercise price.
concentration of demand that is sufficient to temporarily halt a
The measurement of movement of the price of a security between extreme highs and lows.
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