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What is a 12b1 fee? A 12b1 fee is paid on mutual funds. The fee is paid by investors and is used to market the mutual fund to other potential inves...

What are moving averages? Moving averages are calculated using past stock prices in an attempt to determine future trends. It’s calculated by ave...

What is the difference between load and no load? Load and no load are terms used for different mutual funds. Load mutual funds charge a fee or comm...

What is an Alternative Investment? Alternative investments are just different types of investments that are a little more complicated in nature. Th...

What is Electronic Communication Network (ECN)? In order to facilitate the exponential increase of trading volume in the markets, any financial ins...

What does a financial analyst do? Financial analysts research the market and recommend investments. There are quite a few licenses required to be a...

What is Good Delivery? Good delivery just means that nothing gets in the way of a security transfer after a transaction is made. It’s kind of a d...

What is a Busted Convertible? A busted convertible is a convertible bond that will never be converted to stock because the underlying stock price i...

What are the different types of mutual funds? There are many different types of mutual funds, including bond funds, equity funds, money market fund...

What is the difference between mutual funds and index funds? Mutual funds are professionally managed. Those investors trade shares and realize taxa...

What are ETFs? They are Exchange Traded Funds, and unlike index funds, they don't really change, or rebalance, based on the industries represented...

What are mutual funds? Mutual funds are an aggregation of stocks, professionally managed for a "small" fee. Investors wanting exposure to a given a...

What is a Chartist? A chartist is a trader and/or analyst who relies on technical analysis and charts in order to make decisions for trading the ma...

What is Diversified Mutual Fund? Diversified mutual fund allow individual investors to obtain the benefits of risk mitigation through diversificati...

What are systematic and unsystematic risk? Take a risk on this video and hit play.

Modern Portfolio Theory claims there's a smart way to invest. If it's not "put all your money under your mattress," we might be doing it wrong...

What does it mean to rebalance an account, and will we need a yoga mat? Hit play to find out.

What is a portfolio? Hit play to find out.

What are NASDAQ and the NYSE? NYSE stands for New York Stock Exchange, and NASDAQ is more or less a component of this. The stock exchange is where...

What's the SEC? Easy. Seals Eating Candy. Or maybe Silly Elephants Canoodling? We can never remember. Guess it's time to watch this video and refre...

A liquid market is a market featuring high trading volumes, i.e. investors actually want to put their cash to work.

Painting the tape is an illegal way to manipulate stock prices. And yes, it’s still illegal, even if you paint it super pretty.

What is a whisper number? The rumor mill. The gossip chain. The whisper number is the Wall Street version of those word of mouth speculations. Whisper numbers are allegedly rumored earnings numbers that large producing producers tell their high net worth clients in advance of quarterly report announcements. Of course, whether or not these whisper numbers are genuine insider information or just estimated rumors, they can still raise or lower expectations before official announcements and can thus move markets. Sarbanes-Oxley rules make leaking of actual information from companies much more difficult to maintain without penalty, so whisper numbers are more likely opinion and speculation now more so than ever before.

Financial projections are calculations for profit and loss after factoring in expenses, gross revenues, cash flow, debt, and a host of pertinent financial circumstances that apply to a particular company and/or project. The projections may be broken down into micro level, as daily and weekly...to macro level, as 5 to 10 years+. Financial projections are key to managing expectations, and for managerial decisions that will affect risk, speed of growth, schedules for different project implementation steps, and many other project management related criteria. They are also key to assessing how long a company in an industry with a long pre-revenue cash burn R&D period, such as Biotech, may take to finally become profitable. Most public companies’ stock prices are very dependent upon quarterly projections and whether or not the company surpassess, falters, or meets the projected numbers that analysts have calculated and published.

What is a Buy and Hold Strategy? A buy and hold strategy can be thought of as what someone might use in a retirement account or college account (comprised of stock) for a young child. They make investments and let them sit there without changes for a long time regardless of any movements in price because these movements should be short-term.

What is Good ‘Til Cancelled (GTC)? GTC orders are trade orders that may be filled at any time unless the investor cancels it. Good til cancelled orders are different from day orders that must be filled by market close otherwise they are cancelled; these are only cancelled if the investor decides to do so.

What is a limit order, and how can we be sure we never have one of those in place when we go to a doughnut shop?

What does “Away from the Market” mean? Away from the market just means that a stock is moving away from its benchmark. This happens when the buy or sell price does not match the benchmark; it can be caused by things like an offering of new shares in which the offer price is higher than the price that the share is actually trading at.

What are Buy Stop and Sell Stop Orders? An investor makes a buy stop order; the buy stop tells the broker to purchase an asset when its price becomes higher than the current trading price. This price is referred to as the strike price and when this strike price is reached, the buy stop becomes a regular order to buy. A sell stop order is the same thing but rather than buying, the investor is selling. It tells the broker to sell a security when a certain price is reached (usually below the current trading price), in order to ensure the investor doesn’t lose too much money on an investment.

What are At-the-Close Orders and At-the-Opening Orders? At-the-Close orders are given to brokers and the brokers can only fill them at the close of market. On the other hand, at-the-opening orders can only be filled right when the market opens. They are made because it’s expected that some substantial change will happen at the end or beginning of the trading day.

When-issued is a trading condition that applies to structural changes in companies that result in a new entity with its own set of trading rules.

What is a Dutch Auction? A Dutch Auction is either one where closed quantity and price bids are entered and the price is set at the highest price that will allow for the entire quantity to be cumulatively purchased. The Google IPO was a Dutch Auction example. Numerous bids and quantities were proffered and the stock wound up opening at 85 instead of the expected 108. The other Dutch auction version is when a price starts high and is lowered until the first open bid is entered, which would win the entire amount.

What is an Auction Market? Auction markets are the common stock exchanges. They allow buyers and sellers to enter bids and offers; trades occur when the highest price a buyer will pay or the lowest price a seller will take is reached.

What does “Called Away” mean? Calling away means that an option has been called and exercised and the writer is now responsible for giving the person who bought the option the underlying asset (or responsible for buying the asset as would be the case with a put). This term is also used with the trading of other securities like bonds.

Selling away is the practice of selling securities that aren't under the seller's auspices to sell.

Sandbagging is the practice of keeping financial estimates conservative so that they are more likely to exceed expectations. We do a similar thing at work. Always under promise, always over deliver.

What is a Delayed Opening? When a publicly traded company makes an announcement or if a news item concerning the company comes out after market close or before market opening times, it is not uncommon for trading of the stock the next trading day to be delayed. This is for the traders and general public to absorb and assess the news, and the exchange assists in trying to give market makers or specialists a chance to prepare for the presumed flood of buy and sell orders beyond normal trading activity.