The term “unwind” is used to describe the process of unwinding a trade. This can be done for a number of reasons, but the most common is to close out a position that has reached its maximum loss. When a trader unwinds a trade, they are essentially cancelling all of the open orders associated with … Read more
An overnight position is a position that is held overnight, which means that the position is opened at the end of the trading day and held until the following trading day. The overnight position is a type of long position, which means that the trader buys the security at one price and hopes to sell … Read more
Time and sales is a term used to describe the information that is displayed on a trading platform which shows the most recent trades that have taken place in the market, as well as the price, quantity and time of each trade. This information is useful for traders to assess market liquidity and make informed … Read more
Book-entry securities are financial securities that are not represented by a physical certificate. Instead, they are represented by an entry in a book of records maintained by the issuer or by a third-party depository. The advantages of book-entry securities include: – Reduced costs: There are no printing or engraving costs associated with physical certificates. – … Read more
Encumbered securities are securities that are held as collateral by a lender. The lender may be a bank, broker-dealer, or other financial institution. The borrower is typically required to post collateral in order to secure a loan. The collateral may be in the form of cash, securities, or other assets. Encumbered securities may be subject … Read more
The notional principal amount is the underlying value of a financial instrument. For example, the notional principal amount of a bond is the par value of the bond. The notional principal amount of a swap is the notional value of the swap, which is the underlying value of the swap contract. What does nominal amount … Read more
Underperform is a term used to describe a situation where a security or investment is not performing as well as its peers or the market as a whole. When a security is said to be underperforming, it means that it is not meeting the expectations of investors. There can be many reasons why a security … Read more
An ex-ante definition is a term used in trading to describe the act of setting a price or rate before a trade or transaction takes place. This is done in order to protect both parties involved in the trade from any potential losses that may occur as a result of fluctuations in the market. How … Read more
A nominee is a person or entity who is named to act on another person’s behalf. In the context of investing and trading, a nominee is typically used to hold securities in street name on behalf of the beneficial owner. The beneficial owner is the person who actually owns the securities, while the nominee is … Read more
Flash trading is a type of trading that occurs when a trade is executed at a price that is better than the prevailing quote or inside the bid/ask spread. A trade that occurs at a price that is worse than the prevailing quote or outside the bid/ask spread is considered a slow trade. Flash trades … Read more
