What Is a Bull Trap? A bull trap is a false signal. It refers to a declining trend in a stock, index, or other security. The reversal occurs after a convincing rally that breaks a prior support level. This scenario traps traders or investors who act on the buy signal. […]
Investing
221 posts
What Is the Security Market Line? The security market line (SML) is a theoretical representation of the expected returns of assets based on systematic, non-diversifiable risk. The security market line (SML) is a line investors calculate and plot on a trading chart. It serves as a graphical representation of the […]
What are Teenies in Stock Trading? Teenies were once the smallest measure of value in stock trading. Teenies were equal to one-sixteenth of one basis point. In April 2001, the Securities and Exchange Commission ordered all U.S. stock markets to use decimalization. As a result, stock quotes switched from using […]
What Are Flotation Costs in Finance? Flotation costs are non-recurring expenses that are paid to third parties to facilitate the issuance of new securities in the market. Flotation costs are incurred by publicly-traded companies when they issue new stock. They incur expenses, such as underwriting fees, legal fees, and registration […]
What is Time In Force in Stock & Options Trading? Time in force is a special instruction used when placing a stock or options trade. It specifies how long an order will remain active before it is executed or expires. These instructions are especially important for active traders and allow […]
What is a Reverse Merger? A reverse merger occurs when a smaller private company becomes a public company by purchasing control of a larger public company. The shareholders of the private company usually receive large amounts of ownership in the public company and control of its board of directors. Once […]