The hard-to-borrow list definition is a list of stocks that are difficult to borrow for short selling purposes. This list is typically maintained by brokerages and is used to help investors determine which stocks may be more difficult to borrow and therefore more expensive to short. What does borrow a stock mean? Simply put, when … Read more
An offering circular is a legal document that is issued by a company in order to sell securities to the public. The circular must contain certain information about the company and the securities being offered, as well as the risks involved in investing. The term “offering circular” is also used to refer to the process … Read more
A lock-up agreement is a contract between a company and its investors that restricts the sale of the company’s shares for a certain period of time. The purpose of a lock-up agreement is to prevent the company’s stock price from dropping due to a large number of shares being sold on the open market. Lock-up … Read more
Outstanding shares refers to the number of shares that are currently owned by shareholders, including both restricted and unrestricted shares. It is important to know the number of outstanding shares because it is used to calculate key ratios, such as earnings per share (EPS) and price-to-earnings (P/E) ratio. To calculate EPS, divide net income by … Read more
A short sale is the sale of a security that the seller does not own. The seller borrows the security from a broker and sells it, hoping to buy the security back at a lower price so they can return it to the broker and keep the difference as profit. How long can you hold … Read more
The National Market System (NMS) is a set of rules governing how stock exchanges interact with one another in order to provide the best possible price to investors. The NMS was created in 1975 in order to make the U.S. stock market more efficient. It was designed to end the practice of “competitive quotation,” in … Read more
The short interest ratio is the number of shares sold short divided by the average daily volume of shares traded. A high short interest ratio indicates that there is a large number of shares sold short relative to the average daily volume, and this can be interpreted as a bearish signal. What stocks are shorted … Read more
Preferred stock is a type of stock that gives holders priority over common stockholders in the event of a liquidation. Preferred stockholders also typically receive higher dividend payments than common stockholders. What are the three types of preferred stock? There are three primary types of preferred stock: 1. Cumulative preferred stock: This type of stock … Read more
Open interest is the number of outstanding contracts, including both long and short positions, that exist for a particular futures or options contract. It is a measure of market activity and liquidity and is used by traders to gauge the sentiment of the market. Open interest can be used to confirm trends, as well as … Read more
A capital pool company (CPC) is a type of special purpose vehicle/issuer that is created for the sole purpose of raising capital to invest in a new or emerging company. A CPC is typically sponsored by an investment dealer and is formed as a shell company with no significant operations or assets. The sole purpose … Read more
