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What is the difference between a market and limit order?

A market order will guarantee an execution of the order but does not guarantee the execution price. At times, it will not be surprising to get an execution price that is different from the market (current bid- current ask), especially if it is a fast market for that particular stock.

A limit order will guarantee an execution price or better, but it does not guarantee the execution of the order. For example: If you place an order to buy 200 shares of XYZ at $5.00 limit for the day, your order will not be executed until the stock trades at $5.00 or lower. Or If you place an order to sell 200 shares of XYZ at $5.00 limit for the day, your order will not be executed until the stock trades at $5.00 or higher.

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Moe S.

What Is Margin?

Margin is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor's account and the loan amount from the broker. Buying on margin is the act of borrowing money to buy securities. The practice includes buying an asset where the buyer pays only a percentage of the asset's value and borrows the rest from the bank or broker. The
broker acts as a lender and the securities in the investor's account act as collateral.

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Bill W.

Methods to Deposit Funds into a Brokerage account

Listed below are 3 options in which you can deposit funds into a brokerage account. 

  1. Wire transfers- Funds are moved from one bank to another within one business day and the funds can even be available for use on the same day received.   Fees are paid to the bank to process the transfer, international transfers can cost more than a transfer within the US and can take extra day or two to be received.  

 

  1. Interac e-Transfer- Funds are transferred within 24 hours (one business day). You can transfer up to CAD 25,000 to your trading account.

 

  1. Money Transfer Services-  Money Transfer Services are not wire transfers, but do provide you with an electronic way to send funds.  Money Transfer Services transfers funds to an associated bank which in return transfers the funds to the beneficiary.  It can take anywhere from two to seven days to completed the transaction.  Some common money transfer services are:  TransferWise.com, CurrencyCloud.com and Revolut.com. 

 

 Here’s how the three options stack up:

  Wire Transfers e-Transfers Money Transfer Services
    
 Speed Same day 1 business days 2-7 business days
    
 Availability

Most banks and credit unions, 

but sometimes only for business accounts

 Most banks and credit unions Over 1,400 banks and credit unions
 International TransfersYes Yes Yes

 

 

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Marcy B.

What is a Range Order?

A "Range Order" lets the trader enter two orders at once. If long a stock, the range order would entail a Sell Stop order below the market (end the pain) and a Sell order (enjoy the gain) above the market. If short a stock, the range order would entail a Buy Stop order above the market (end the pain) and a Buy order (enjoy the gain) below the market.
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Moe S.

What is a margin call?

For traders and investors, your margin account balance has to stay above a certain level known as a maintenance margin. If your account dips below this level, you will get a margin call, which means that your broker will be annoying you with e-mails and phone calls to bring your account up to or above the maintenance margin level.
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Bill W.

What is a publicly traded company?

Very simple. A company is considered a publicly traded company if it has raised money by selling its own stock to the general public in the form of an initial public offering (IPO). Once its' stock is sold to the general public, it can be resold infinitely from one investor to another. For this reason, stock exchanges were created to facilitate this process of continuous buying and selling.
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Bill W.

Why do some people call brokerage firms a broker/dealers?

As the name implies, a brokerage firm can act as both broker and dealer. If your broker decides to trade for you, then he is a broker. If your broker trades for itself, then it is a dealer. Easy Right!
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Bill W.

Bulls and Bears

Bull and the Bear are terms used to refer to investors perspective outlook of the market. A bullish outlook is an outlook that is optimistic (stock prices rising), while a bearish outlook means pessimistic (stock prices dropping). A bullish market refers to a scenario where the economy is experiencing growth, typically defined as a time period where prices are steadily increasing. Being bullish means you are optimistic that prices will go higher from where they currently are, while being bearish is the opposite; you think prices will trade lower from where they currently are. Bullish traders will look to take long positions by either buying stocks, call options or any other financial instrument that will appreciate as prices go up. Bearish traders are looking to take short positions where they will profit if the market or stock goes down from its current price. An old Wall Street saying that should be remembered is "Bulls make money, Bears make money, but Pigs get slaughtered".
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John G.

What is a daily loss limit?

TradeZero offers risk tools which enables a daily loss limit to your trading account. This tool can prevent you from making you from breaking your trading rules and by pass your daily losses.
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Moe S.

What is an exchange traded fund (ETF)?

They are always mentioned in the business news. An exchange traded fund (ETF) is a basket of securities that can be traded throughout the day like a regular common stock. Often times, they are used to track certain industries and/or sectors. For example, a technology ETF would be comprised of different technology stocks inside the fund and is best used to track the technology sector. Why would anyone buy a technology ETF or any type of ETF? A person can be lazy and doesn't want to do the research on individual stocks. Also, it is more cost effective to buy a single ETF comprised of 10 different technology stocks, than to buy them individually.
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Randy B.