Tag: Buying

Falling Knife definition explanation

What is Falling Knife?
A slang phrase for a security or industry in which the current price or value has dropped significantly in a short period of time. A falling knife security can rebound, or it can lose all of its value, such as in the case of company bankruptcy where equity shares become worthless.

A falling knife situation can occur because of actual business results (such as a big drop in net earnings) or because of increasingly negative investor sentiment. Read more for examples and further explanation including related video clips and also comments
Continue reading “Falling Knife definition explanation”

Long (or Long Position) definition explanation

What is Long (or Long Position)?
1. The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value.

2. In the context of options, the buying of an options contract.

Opposite of “”short”” (or short position). Read more for examples and further explanation including related video clips and also comments
Continue reading “Long (or Long Position) definition explanation”

Trading Floor definition explanation

What is Trading Floor?
The floor where trading activities are conducted. Trading floors are found in the buildings of various exchanges, such as the New York Stock Exchange and the Chicago Board of Trade. These floors represent the area where traders complete the buying or selling of an asset. Read more for examples and further explanation including related video clips and also comments
Continue reading “Trading Floor definition explanation”

Margin definition explanation

What is Margin?
1. Borrowed money that is used to purchase securities. This practice is referred to as “”buying on margin””.

2. The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.

3. In a general business context, the difference between a product’s (or service’s) selling price and the cost of production.

4. The portion of the interest rate on an adjustable-rate mortgage that is over and above the adjustment-index rate. This portion is retained as profit by the lender. Read more for examples and further explanation including related video clips and also comments
Continue reading “Margin definition explanation”

Triple Bottom definition explanation

What is Triple Bottom?
A pattern used in technical analysis to predict the reversal of a prolonged downtrend. The pattern is identified when the price of an asset creates three troughs at nearly the same price level. The third bounce off the support is an indication that buying interest (demand) is outweighing selling interest (supply) and that the trend is in the process of reversing. Read more for examples and further explanation including related video clips and also comments
Continue reading “Triple Bottom definition explanation”

Short Covering definition explanation

What is Short Covering?
Purchasing securities in order to close an open short position. This is done by buying the same type and number of securities that were sold short. Most often, traders cover their shorts whenever they speculate that the securities will rise. In order to make a profit, a short seller must cover the shorts by purchasing the security below the original selling price.

Also referred to as “”buy to cover”” or “”buyback””. Read more for examples and further explanation including related video clips and also comments
Continue reading “Short Covering definition explanation”

Escrow Agent definition explanation

What is Escrow Agent?
An entity that has fiduciary responsibilities in the transfer of property from one party to another. Typically associated with selling or buying a home or other property, the escrow agent will secure the property and examine documents to make sure that the terms of the sale are met on each end, serving both the buyer and seller in the transaction. Read more for examples and further explanation including related video clips and also comments
Continue reading “Escrow Agent definition explanation”