What is Naked Short Selling?

Naked short selling, or naked shorting, is when a person or company performs a short sale on a stock without actually borrowing the stock or making sure that the stock can be borrowed. This means that the short has no cover and there may be issues when the time comes to cover if the trader cannot acquire the stock. If this happens, the result is known as a “failure to deliver”, and the transaction remains open...

What Is a Stock Loan?

A stock loan is a loan just like any other, that uses stock as collateral. It may also be referred to as “securities lending”, which is the same thing, from the different perspective: the entity that takes the stock is regarded as the borrower, and, using this approach, the cash amount is regarded as the collateral in the transaction. There are plenty of reasons why traders and investors may turn to stock loans. For...

Will it be risky to get a loan for trading stocks?

If you want to trade stocks, but you don’t have enough money to pay for them, you may consider taking a loan. Before you rush to the bank with your application (which will probably be denied anyway), you should know that there is an entire sub-specialty of stock trading that is based on loans, which is called margin trading. There are people who specialize in doing nothing but that, and they make a nice profit at the...

Introduction to ETFs

An ETF or an Exchange Traded Fund is an investment fund that trades on a stock exchange.  An ETF is designed to duplicate the performance of an index such as the Dow Jones Industrial Average or the S&P 500.  ETFs also exist that track commodities such as gold, silver, oil or corn. To get a better understanding of an ETF it’s important to explore what is an index.  An index is a method used to measure the value of a...

Introduction To Futures

A futures contract is a trade made in the present for an item that will be delivered in the future.  It is agreed that the seller will provide to the buyer the item in the future for the agreed upon price at the present time.  Items that are traded in the futures market include virtually every commodity and metal such as oil, gold, corn but this article will focus on contracts that relate to stock trading, specifically...

Stock Market Daily Schedule

The stock market is often very unpredictable in the sense that anything can happen at any time. However, for the most part, the schedule of the major exchanges more or less follows the same schedule and characteristics every day.  All times are New York City time – Eastern Standard Time (EST).  4:00AM- 9:30AM.  Many investors are surprised to learn that the ARCA exchange begins executing orders as early as 4:00AM.  The...