Investing in Equities, Futures,

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Presentation transcript:

Investing in Equities, Futures, And OPTIONS

Efficient Market Hypothesis The argument that stocks are always priced about right, and bargains are hard to find.

Portfolio diversification Strategy of holding several investments to protect against risk.

Stockbroker Person who buys or sells securities for investors.

Securities Exchanges The physical place where buyers and sellers meet to exchange securities.

New York Stock Exchange The oldest, largest and most prestigious of the organized stock exchanges.

American Stock Exchange The fourth largest exchange. Companies represented tend to be smaller, and more speculative.

Regional Stock Exchanges This includes exchanges such as Chicago, Pacific, Philadelphia, Boston, and Memphis. Serves small to middle size companies.

Global Stock Exchanges Such as Sydney, Tokyo, Hong Kong, Singapore, Johannesburg and Frankfurt.

Over the Counter Market (OTC) An electronic marketplace for securities that are not listed or traded on an organized exchange.

Dow Jones Industrial Average (DJIA) The most popular and widely publicized measure of stock market performance. 30 representative stocks

Standard and Poor’s 500 A popular measure of stock performance using 500 representative stocks.

Spot Market A market in which a transaction is made immediately at the prevailing price.

Futures markets Contracts to buy or sell at a specific date in the future or at a specified price.

Options Market Options are closely related to futures; the main difference being that options will give one of the parties (buyer or seller) the opportunity to back out of the future delivery.