c12s3: investing in equities, futures, and options main idea: ▫equities, or stocks, represent...
TRANSCRIPT
C12S3: Investing in Equities, Futures, and Options•Main Idea:
▫Equities, or stocks, represent ownership of a corporation.
C12S3: Investing in Equities, Futures, and Options•Key Terms:
▫Efficient Market Hypothesis (EMH)▫Stockbroker▫Seat▫Dow-Jones Industrial Average▫Standard & Poor’s 500▫Spot market▫Futures market▫Options market
C12S3: Investing in Equities, Futures, and Options•Market Efficiency
▫Stocks should be traded at the correct value
▫You are expected to get a good deal
C12S3: Investing in Equities, Futures, and Options•Organized Stock Exchanges
▫Also called securities exchanges, this is where stocks are traded
▫New York Stock Exchange (NYSE) Oldest, largest, most prestigious Has 1,400 seats Lists stocks from about 2,800 companies
C12S3: Investing in Equities, Futures, and Options•Organized Stock Exchanges
C12S3: Investing in Equities, Futures, and Options•Organized Stock Exchanges
▫American Stock Exchange (AMEX) 750 stocks Smaller and more speculative stocks
▫Regional Exchanges Chicago, Pacific, Philadelphia, Boston, Memphis Share some stock listings with NYSE
▫Global Stock Exchanges Operate in large cities like Sydney, Tokyo, Hong
Kong People from around the world trade on them
C12S3: Investing in Equities, Futures, and Options•Over-the-Counter Markets
▫Electronic trade markets Most important: National Association of
Securities Dealers Automatic Quotation (NASDAQ)
Connects more than 80 countries Lists over 4,000 large and small companies
C12S3: Investing in Equities, Futures, and Options•Measures of Stock Performance
▫Dow-Jones Industrial Average Samples 30 stocks to give an idea of overall
performance Measures NYSE
▫Standard & Poor’s 500 Samples NYSE, AMEX and OTC markets
C12S3: Investing in Equities, Futures, and Options•Measures of Stock Performance
▫Bull vs. Bear Markets Bull markets are strong markets with prices
moving up Bear markets are mean markets with falling
prices
C12S3: Investing in Equities, Futures, and Options•Trading in the Future
▫Spot and Future Markets Spot markets allow trades to take place at
the current price Futures markets can drive up the price of
stocks that are expected to rise
C12S3: Investing in Equities, Futures, and Options•Trading in the Future
▫Options Markets Like futures markets, but you can back out of
the deal Call option lets you buy a share at some point
in the future Put option lets you sell a share of stock at
some point in the future
C12S3: Investing in Equities, Futures, and Options•Chapter 12 Quiz in 10 minutes•With a partner, answer “Reviewing the
Facts” 1, 3, 4, 7, 8, 12