A stop order is a type of order placed by traders to buy or sell a security once its price reaches a specified level, known as the stop price. Stop orders are commonly used for risk management and automation in trading, helping traders enter or exit positions efficiently. Understanding how stop orders work, their types, […]
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The stock market operates on supply and demand, and one of the most crucial aspects of this dynamic is opening and closing imbalances. These imbalances provide traders with insight into institutional activity and potential price movements at the start and end of the trading day. Understanding these imbalances can help traders identify opportunities and risks
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Introduction Options trading can be complex, but understanding the Greeks—key risk measures—can help traders make informed decisions. The Greeks provide insights into how an option’s price is expected to change based on various market conditions. The five main Greeks are Delta, Gamma, Theta, Vega, and Rho. Each of these measures different aspects of risk in
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Introduction When opening a brokerage account, traders must choose between a cash account and a margin account. Both account types allow investors to buy and sell securities, but they have key differences in terms of capital requirements, leverage, risks, and trading flexibility. Understanding these differences is essential for traders to make informed decisions based on
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What is Short Interest? Short interest is a key metric used in stock market analysis that represents the total number of shares of a particular stock that have been sold short but have not yet been covered or closed out. Essentially, it indicates how many shares investors have borrowed and sold in anticipation of a
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What is the Pattern Day Trading (PDT) Rule? The Pattern Day Trading (PDT) rule is a regulation established by the Financial Industry Regulatory Authority (FINRA) to protect retail traders from excessive risk-taking. It applies to traders using margin accounts who execute four or more day trades within five business days, provided these trades make up
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What is Float in Stocks? A stocks Float refers to the number of shares of a company’s stock that are available for trading by the public. It excludes restricted shares held by company insiders, executives, and major institutional investors. The float is an important metric as it influences a stock’s liquidity, volatility, and overall trading
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What is Relative Volume? Relative Volume (RVOL) is a key trading metric that measures the current trading volume of a stock or asset compared to its average trading volume over a specified period. It is expressed as a ratio and helps traders determine whether a stock is experiencing unusual trading activity. A higher-than-normal relative volume
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What is a Margin Call? A margin call is a demand from a broker requiring a trader to deposit additional funds or securities into their margin account to maintain a minimum required balance. This occurs when the value of the trader’s margin account falls below the broker’s required maintenance margin due to market losses. If
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What is a Short Squeeze? A short squeeze occurs when a stock unexpectedly rises quickly, forcing short sellers to buy their shares back. This sudden buying activity drives the price even higher, creating a feedback loop that can push shares to extreme levels. Short squeezes are often triggered by unexpected news or hot market cycles.
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