Transcript View a PPT show on Buying and Selling Stocks
Slide 1
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 2
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 3
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 4
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 5
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 6
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 7
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 8
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 9
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 10
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 11
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 12
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 2
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 3
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 4
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 5
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 6
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 7
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 8
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 9
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 10
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 11
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short
Slide 12
Buying & Selling Stocks
Mrs. Wilson: Career & Financial Management
The Securities Market
• Consists of channels through which you can buy
an sell securities:
– Stocks
– Bonds
• Trading Agent
– You need a trading agent to buy and sell common
and preferred stock
Securities Exchange
• A marketplace where brokers who are representing
investors meet to buy and sell securities
• The largest organized exchange in the US is the NY
Stock Exchange (NYSE)
• The smaller American Stock Exchange (AMEX) is also
in NY City
• Regional exchanges are located throughout the country
NYSE Building
• Trading Floor
– Where stocks are bought and sold
– Two-third the size of a football field
– Around the edge are the booths with computer
terminals that are open at both ends
• There is room inside each booth for a dozen or more floor
brokers
• Floor Brokers
– Buy and sell stocks on the exchange
Over-the-Counter Market (OTC)
• When securities are bought and sold through brokers but not
through a stock exchange, the transaction is over-the-counter
(OTC)
• It is a network of brokers who buy and sell the securities of
corporations that are not listed on the securities exchange
• They do not deal face-to-face
• Trades are completed by telephone and a computerized system
displays current price quotations on a terminal in the broker’s office
NASDAQ
• This is the electronic quotation system for brokers operating in the
OTC market
• Acronym
National Association of Securities Dealers
Automated Quotation System
• To be listed with NASDAQ, companies must have issued at least
100,000 shares of stock worth $1 M.
Bull & Bear Markets
• Bull Market
– Prolonged period of rising stock prices and a general feeling of investor
optimism
– Confidence about how the country is doing also servers to drive up
stock prices
• Bear Market
– Prolonged period of falling stock prices and a general feeling of
investor pessimism
– Stock prices may fall 20 percent or more
– Bear markets are usually short and savage
• Average Bull Market often lasts three to four times as long as a
Bear Market
Investing Strategies
• Speculator/Day Trader
– Buying and selling stock within a short period of time.
• Investor
– Holding your investment for a long period of time (a year or
more)
Short-Term Techniques
• What is the goal?
– To buy a stock that will soon increase in value
• Buy on Margin
– Borrowing money from your broker
• You must deposit a minimum of $2000 in cash or eligible
securities (collateral)
Buying on Margin Example
• You want to buy 100 shares of XYZ Corporation at
$20/share ($2,000)
• You could use $1,000 from your margin account and
borrow $1,000, with interest, from your broker
• This strategy is called leverage or the sue of borrowed
money to buy securities
• When you sell the stock, you repay the loan with interest
Short Selling
• Selling stock borrowed from the broker that must be
replaced at a later time
• You borrow a certain number of shared from the broker
• You then sell the borrowed stock, knowing that you must
buy it back later and return it to the broker
• You are betting the price will drop, so that you can buy it
back at a lower price than you sold it for
Assignment
• Work in class together to complete page 121 in
your workbook
– Activity 12.3 Buying on Margin
– Activity 12.4 Selling Short