Type of Equity Securities1. Common Stock- A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debtholders have been paid in full.2. Preferred Stock- A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.3. Convertible Security- An investment that can be changed into another form. The most common convertible securities are convertible bonds or convertible preferred stock, which can be changed into equity or common stock. A convertible security pays a periodic fixed amount as a coupon payment (in the case of convertible bonds) or a preferred dividend (in the case of convertible preferred shares), and specifies the price at which it can be converted into common stock.Equity Markets1. Primary Market- A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors.2. Secondary Market- A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchanges - such as the New York Stock Exchange and the NASDAQ are secondary markets.

Secondary markets exist for other securities as well, such as when funds, investment banks, or entities such as Fannie Mae purchase mortgages from issuing lenders. In any secondary market trade, the cash proceeds go to an investor rather than to the underlying company/entity directly.

Equity Trading1. OTC- A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" can be used to refer to stocks that trade via a dealer network as opposed to on a centralized exchange. It also refers to debt securities and other financial instruments such as derivatives, which are traded through a dealer network.2. PSE- is the nationalstock exchangeof thePhilippines, one of the oldest stock exchanges inSoutheast Asia, having been in continuous operation since its inception in 1927. It currently maintains two trading floors, one at its headquarters at the PSE Plaza Ayala Triangle,Ayala Tower OneinMakati City's Central Business District, and one at the Philippine Stock Exchange Centre (Tektite Towers),Ortigas CenterinPasig City. It also has an upcoming Philippine Stock Exchange office tower/building inBonifacio Global City, expected to be fully constructed by mid-2016.[2]The PSE is composed of a 15-man Board of Directors, chaired by Jos T. Pardo.Global Market1. Short Sale- A market transaction in which an investor sells borrowed securities in anticipation of a price decline and is required to return an equal number of shares at some point in the future.

The payoff to selling short is the opposite of a long position. A short seller will make money if the stock goes down in price, while a long position makes money when the stock goes up. The profit that the investor receives is equal to the value of the sold borrowed shares less the cost of repurchasing the borrowed shares.2. Market Order-An order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price. A market order is the default option and is likely to be executed because it does not contain restrictions on the buy/sell price or the timeframe in which the order can be executed.3. Limit order- An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Because the limit order is not a market order, it may not be executed if the price set by the investor cannot be met during the period of time in which the order is left open. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled.4. Stop Order- An order to buy or sell a security when its price surpasses a particular point, thus ensuring a greater probability of achieving a predetermined entry or exit price, limiting the investor's loss or locking in his or her profit. Once the price surpasses the predefined entry/exit point, the stop order becomes a market order.Regulation of Equity MarketDay TradingDay trading is the practice of buying and selling stock shares on the same day. While nearly anyone can buy stock to sell at a later time, day trading carries strict restrictions. This protects novice traders from themselves in a highly risky form of stock market participation, where ignorant traders can quickly lose extraordinary sums of money. Additionally, the restriction reduces use of the stock market as a form of gambling for the common man. Day traders are required to use only margin accounts, a type of brokerage account that gives clients access to cash on loan from the broker. Additionally, day traders must maintain a minimum daily balance of $25,000 in their brokerage accounts, which may be a combination of cash and stocks. If this is not met, the account is suspended until new funds are added or a period of 90 days passes.Going PublicThe stock market's primary purpose is to facilitate public ownership of a corporation. When a company chooses to "go public," it has access to large investment capital from the investing public. But to ensure that the public has accurate knowledge of a company's health, regulations require public businesses to disclose much more information than private companies. The company must file regular financial statements that provide a comprehensive look at the company's debt, earnings, salaries of its principal officers and other information.Related Reading:General Understanding of the Stock MarketBroker RegistrationBrokers are the middle men who provide the investing public with access to activity on a stock market exchange. Without a broker, most investors are unable to buy and sell shares. The government regulates the actions of brokers to ensure fairness in this large part of the stock market's industry. The most important regulation determines who in fact may operate as a broker. Registration with the Securities and Exchange Commission is a fundamental requirement for any company that engages in stock market transactions on behalf of a client. The regulations further distinguish between brokers and "dealers," who execute stock transactions for the own corporate accounts. Many companies operate as both brokers and dealers, which requires the corporation to file under both roles.Trading BusinessSome people earn their living mostly or entirely through stock market trading. For these individuals, the government regulates how their capital gains are taxed. The Internal Revenue Service provides a special "trader status" to individuals who meet certain criteria. Once granted trader status, these individuals are not restricted to many of the limitations associated with capital gains taxes. Instead, their trading activity is treated as regular income. To qualify, a trader must demonstrate that she earns the majority of her income from trading and that her profits are significantly affected by daily fluctuations in market activity. Her trading records must indicate a year-round daily participation in the markets to demonstrate full-time work.Equity Valuation BasicsCommon StockThere are 3 models used in the dividend discount model:1. zero-growth, which assumes that all dividends paid by a stock remain the same; Stocks Intrinsic Value = Annual Dividends / Required Rate of Return2. theconstant-growth model, which assumes that dividends grow by a specific percent annually;Constant-Growth Rate DDM Formula

Intrinsic Value=D1

k-gD1= Next Year's Dividendk = Capitalization Rateg = Dividend Growth Rate

3. and thevariable-growth model, which typically divides growth into 3 phases: a fast initial phase, then a slower transition phase that ultimately ends with a lower rate that is sustainable over a long period.Preferred Stock Valuation

where Pp= the preferred stock price, Dp= the preferred dividend, and r = the required return on the stock.Equity Riska. Systematic risk-The risk inherent to the entire market or an entire market segment. Systematic risk, also known as undiversifiable risk, volatility or market risk, affects the overall market, not just a particular stock or industry. This type of risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the right asset allocation strategy.b. Unsystematic Risk- Company- or industry-specific hazard that is inherent in each investment. Unsystematic risk, also known as nonsystematic risk, "specific risk," "diversifiable risk" or "residual risk," can be reduced through diversification. By owning stocks in different companies and in different industries, as well as by owning other types of securities such as Treasuries and municipal securities, investors will be less affected by an event or decision that has a strong impact on one company, industry or investment type. Examples of unsystematic risk include a new competitor, a regulatory change, a management change and a product recall.

Measuring Systematic Rsik1. Beta- A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns.2. Security Market Line- A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities.

Also refered to as the "characteristic line".3. CAPM- A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities.

The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is represented by the risk-free (rf) rate in the formula and compensates the investors for placing money in any investment over a period of time. The other half of the formula represents risk and calculates the amount of compensation the investor needs for taking on additional risk. This is calculated by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf).Stock Market Index1. Price Weighted Index- A stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index.2. Market Value Weighted Index- A type of market index whose individual components are weighted according to their market capitalization, so that larger components carry a larger percentage weighting. The value of a capitalization-weighted index can be computed by adding up the collective market capitalizations of its members and dividing it by the number of securities in the index.3. Dow Jones Averages- is astock market index, and one of several indices created byWall Street Journaleditor andDow Jones & Companyco-founderCharles Dow. The industrial average was first calculated on May 26, 1896.[1]Currently owned byS&P Dow Jones Indices, which is majority owned byMcGraw-Hill Financial, it is the most notable of the Dow Averages, of which the first (non-industrial) was first published on February 16, 1885. The averages are named after Dow and one of his business associates, statisticianEdward Jones. It is an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in thestock market.[3]It is the second oldest U.S. market index after theDow Jones Transportation Average, which was also created by Dow.4. Straight Through Processing- An initiative used by companies in the financial world to optimize the speed at which transactions are processed. This is performed by allowing information that has been electronically entered to be transferred from one party to another in the settlement process without manually re-entering the same pieces of information repeatedly over the entire sequence of events.5. NASDAQ- A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971. The term Nasdaq is also used to refer to the Nasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq exchange that includes the worlds foremost technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, Intel and Amgen.PSEBook history- The PSE Rule Book consists of five (5) volumes which are: (1) Corporate Rules, (2) Membership Rules, (3) Listing and Disclosure Rules, (4) Trading and Settlement Rules, and (5) Compliance and Surveillance Rules.Structure- Membership Department This department manages, implements and coordinates members requirements, planned activities and projects with the end in view of assisting PSE management in the expansion, consolidation and development of its membership. It also processes membership applications and various corporate changes of member-brokers for approval by the Membership Committee. It is in charge of circular preparations concerning membership, and the monitoring of financial statements of brokers and SEC licenses of its stock traders. In coordination with the Membership Committee, it facilitates memberships arbitration. Further, the Membership Department organizes and prepares social activities for all members.Human Resources Management Department This department, under the Office of the President, handles employee career management, administration of employee compensation and benefits, management of corporate culture and organization development, implementation of the companys performance management system and formulation and enforcement of company policies. To ensure continuing organization and employee development, this department integrates the organizational structure/processes and workforce issues into the business equation and evaluates group processes and dynamics to tailor-fit results with a corporate staff training and management development program.Office of the General Counsel The Office of the General Counsel renders corporate legal services and serves as the primary legal advisor to the Board of Governors, the President, the Chief Operating Officer, the various departments, officers and employees of the Exchange. It also coordinates with the external legal consultants on matters referred by the exchange; represents the Exchange before judicial and administrative/quasi-judicial bodies; and, attend legislative and administrative hearings or meeting as well as draft position papers and/or comments to pending legislation and administrative issuances.Shareholders Protection1. Prize freeze rule- Occurs when the trading price of the shares moves 50% upward or 40% downward from the previous closing price. Trading is still allowed but the movement of the price is not.2. Alert levels-When a company advises its earnings will not meet analyst expectations. The profit warning is made prior to the public announcement of the company's earnings.Selected Market IndicatorsA Trend-Following ToolIt is possible to make money using a countertrend approach to trading. However, for most traders the easier approach is to recognize the direction of the major trend and attempt to profit by trading in the trend's direction.A Trend-Confirmation ToolNow we have a trend-following tool to tell us whether the major trend of a given currency pair is up or down. But how reliable is that indicator? As mentioned earlier, trend-following tools are prone to being whipsawed. So it would be nice to have a way to gauge whether the current trend-following indicator is correct or not. For this, we will employ atrend-confirmationtool. Much like a trend-following tool, a trend-confirmation tool may or may not be intended to generate specific buy and sell signals. Instead, we are looking to see if the trend-following tool and the trend-confirmation tool agree.A Profit-Taking ToolThe last type of indicator that a forex trader needs is something to help determine when to take a profit on a winning trade. Here too, there are many choices available. In fact, thethree-day RSIcan also fit into this category. In other words, a trader holding a long position might consider taking some profits if the three-day RSI rises to a high level of 80 or more. Conversely, a trader holding a short position might consider taking some profit if the three-day RSI declines to a low level, such as 20 or less.Market SizeAshareclassification structure based on the number ofshares outstanding. This determines the number of shares that amarket makercan trade at the quoted price.Number of Listings and Market ValueRankCompanyCountrySalesProfitsAssetsMarket Value

1ICBC

China$148.7 B$42.7 B$3,124.9 B$215.6 B

2China Construction Bank

China$121.3 B$34.2 B$2,449.5 B$174.4 B

3Agricultural Bank of China

China$136.4 B$27 B$2,405.4 B$141.1 B

4JPMorgan Chase

United States$105.7 B$17.3 B$2,435.3 B$229.7 B

5Berkshire Hathaway

United States$178.8 B$19.5 B$493.4 B$309.1 B

6Exxon Mobil

United States$394 B$32.6 B$346.8 B$422.3 B

7General Electric

United States$143.3 B$14.8 B$656.6 B$259.6 B

8Wells Fargo

United States$88.7 B$21.9 B$1,543 B$261.4 B

9Bank of China

China$105.1 B$25.5 B$2,291.8 B$124.2 B

10PetroChina

China$328.5 B$21.1 B$386.9 B$202 B