Investment Language 101 Series: TERM OF THE DAY: -- Getting to Know the Stock Exchanges | E.25 | Trading Candle Cheat Sheet Incl. Each Episode.
A series designed to help all the new people flooding into & entering Crypto/Investments daily who get thrown into the rabbit hole so to speak and everything is new to them.
It is a TLDR / Short Form Series, covering ONLY one thing each episode in blue collar, easy to understand language to give a SHORT OVERVIEW of the term or lesson of the day.
It is specifically designed this way to keep it short and simple.
People can then search out extra info if they wish.
I've never seen a regular series or resource running on Steemit to continually address this basic need so I decided to do it.
A stock exchange does not own shares. Instead, it acts as a market where stock buyers connect with stock sellers. Stocks can be traded on one or more of several possible exchanges such as the New York Stock Exchange (NYSE). Although you will most likely trade stocks through a broker, it is important to understand the relationship between exchanges and companies, and the ways in which the requirements of different exchanges protect investors.
How Does It All Start?
--
The primary function of an exchange is to help provide liquidity; in other words, to give sellers a place to "liquidate" their shareholdings.
Stocks first become available on an exchange after a company conducts its initial public offering (IPO). In an IPO, a company sells shares to an initial set of public shareholders (the primary market). After the IPO "floats" shares into the hands of public shareholders, these shares can be sold and purchased on an exchange (the secondary market).
The exchange tracks the flow of orders for each stock, and this flow of supply and demand sets the stock price. Depending on the type of brokerage account you have, you may be able to view this flow of price action. For example, if you see that the "bid price" on a stock is $40, this means somebody is telling the exchange that he or she is willing to buy the stock for $40. At the same time you might see that the "ask price" is $41, which means somebody else is willing to sell the stock for $41. The difference between the two is the bid-ask spread.
Auction Exchanges - NYSE
--
The NYSE is primarily auction-based, which means specialists are physically present on the exchange's trading floors. Each specialist "specializes" in a particular stock, buying and selling the stock in the auction. These specialists are under competitive threat by electronic-only exchanges that claim to be more efficient (that is, they execute faster trades and exhibit smaller bid-ask spreads) by eliminating human intermediaries.
The NYSE is the largest and most prestigious exchange. Listing on the NYSE affords companies great credibility, because they must meet initial listing requirements and also comply annually with maintenance requirements. For example, for U.S. companies to remain listed, the NYSE companies must keep their price above $4 per share and their market capitalization (number of shares times price) above $40 million.
Furthermore, investors trading on the NYSE benefit from a set of minimum protections. Among several of the requirements that the NYSE has enacted, the following two are especially significant:
Companies must get shareholder approval for any equity incentive plan (for example, stock option plan or restricted stock plan). In the past, companies were allowed to sidestep shareholder approval if an equity incentive plan met certain criteria; this, however, prevented shareholders from knowing how many stock options were available for future grant.
A majority of the board of directors' members must be independent. However, each company has some discretion over the definition of "independent," which has caused controversy. Furthermore, the compensation committee must be entirely composed of independent directors, and the audit committee must include at least one person who possesses "accounting or financial expertise."
The Nasdaq (an Electronic Exchange)
--
The Nasdaq, an electronic exchange, is sometimes called "screen-based" because buyers and sellers are connected only by computers over a telecommunications network. Market makers, also known as dealers, carry their own inventory of stock. They stand ready to buy and sell Nasdaq stocks, and they are required to post their bid and ask prices.
Nasdaq has listing and governance requirements similar to the NYSE. For example, a stock must maintain a $4 minimum price. If a company does not maintain these requirements, it can be delisted to one of the OTC markets discussed below.
Electronic Communication Networks (ECNs)
--
ECNs are part of an exchange class called alternative trading systems (ATS). ECNs connect buyers and sellers directly. Because they allow for direct connection, ECNs bypass the market makers. You can think of them as an alternative means to trade stocks listed on the Nasdaq and, increasingly, other exchanges as well (such as the NYSE or foreign exchanges).
There are several innovative and entrepreneurial ECNs, and they are generally good for customers because they pose a competitive threat to traditional exchanges, and therefore push down transaction costs. Currently, ECNs do not really serve individual investors; they are mostly of interest to institutional investors.
There are several ECNs, including INET (the result of an early 2004 consolidation between the Instinet ECN and Island ECN) and Archipelago (one of the four original ECNs that launched in 1997).
Over-the-Counter (OTC)
--
Over-the-counter (OTC) refers to markets other than the organized exchanges described above. OTC markets generally list small companies, and often (but not always) these companies have "fallen off" to the OTC market because they were delisted from Nasdaq.
Some individual investors will not even consider buying OTC stocks due to the extra risks involved. On the other hand, some strong companies trade on the OTC. In fact, several strong companies have deliberately switched to OTC markets to avoid the administrative burden and costly fees that accompany regulatory oversight laws such as the Sarbanes-Oxley Act. On balance, you should be careful when investing in the OTC if you do not have experience as several penny stocks trade over-the-counter. (To learn more about penny stocks, read our penny stock series).
-- There are two OTC markets:
--
Over-the-Counter Bulletin Board (OTCBB) is an electronic community of market makers. Companies that fall off the Nasdaq often end up here. On the OTCBB, there are no "quantitative minimums" (no minimum annual sales or assets required to list).
Companies that list on the OTC Pink are not required to register with the SEC. Liquidity is often minimal. Also, keep in mind that these companies are not required to submit quarterly 10Qs.
The Bottom Line
--
To be traded, every stock must list on an exchange where buyers and sellers meet. The two big U.S. exchanges are the NYSE and the fast-growing Nasdaq. Companies listed on either of these exchanges must meet various minimum requirements and baseline rules concerning the "independence" of their boards. But these are by no means the only legitimate exchanges. Electronic communication networks are relatively new, but they are sure to grab a bigger slice of the transaction pie in the future.
Finally, the OTC market is a fine place for experienced investors with an itch to speculate and the know-how to conduct a little extra due diligence.
Trading Candle Cheat Sheet:
--
Further Reading/Source/Resources
Friend of the People -- Enemy of the State.
--
I am leaving these images I made here until I figure out one that fits properly and looks right for the first/main image for the post/series.
--
Since Steemit dev's changed the size of the picture frame that shows, it has honestly been a real problem getting images to match the screen, it was perfectly fine months ago before they messed around with it.
SMH.
Thanks for reading, have a nice day.
PixaBay has tons of free pictures for us all to use!!!
Super Easy/Fast Picture Edits / Resizing at: http://www.picresize.com/ and also https://www298.lunapic.com/editor/
If you liked this blog post - please Resteem it and share good content with others!
--
Some of my recent blogs:
--
https://steemit.com/funny/@barrydutton/we-did-it-we-are-bitcoin-forkening-survivors-lol
Most Images: Gif's - via Giphy.com , Funny or Die.com / Pixabay. Today:
If you feel my posts are undervalued or you want to donate to tip me - I would appreciate it very much.
--
LiteCoin (LTC) - LKdsnvSXk9JW99EiNicFMGKc1FXiBo9tUE
Monero (XMR) - d8ecb02c09f70ec10504b59b96bc1f488af28b05933893dfd1f55b113e23fbff
EOS (EOS) - 0xD37bEFf5bf07E3aa432de00cE0AaA8df603A4fB0
Ethereum (ETH) - 0x3Ad69Ff057C9533ca667B2d7E3E557F5eeFd4477
Ethereum Classic (ETC) - 0x5ab2b08d4ce8d454eb9d1ecc65c6d8b0c5f9784c
Bitcoin (BTC) - 18J6RRuzX4V7b2CDbx7tWZYNBLkkGWsvWX
DASH - XgZvsvSZgPkNbmGbRhc3S1Pt2JAc7QHwiS
PIVX - DA3azxQqJiX9t7EviuacpamfNhMi2zGAUh
Stratis (STRAT) - SNsJp6v1jXvKWy4XcXSXfNQ9zhSJJppJgv
ZCash (ZEC) - t1aCPEYELkGaf3GtgGTiCEDo7XfPm4QEwmL
Please note -- I will have limited internet access for awhile -- so PLEASE do not be upset that I cannot reply right away, or to everyone. I am dealing with some changes, and will have limited time online and will be happy if I get a few blog posts up a week.
This has really upset some people but I do not force my opinions on others, or need to communicate every detail of my life or issues, most people do not care anyways. I invested around 10 hours or more a day on Steemit most of my first 13 mths here, trying to build community, put out content and engage people, help and donate to people, and I just do not have that time in my life right now, and that includes for replies and voting/curation.
I have done my best, sorry if you do not understand like some are clearly having a problem with. It's a blogging platform, and I will do my best at everything, and to keep blogging.
Carry On.
A series designed to help all the new people flooding into & entering Crypto/Investments daily who get thrown into the rabbit hole so to speak and everything is new to them.
It is a TLDR / Short Form Series, covering ONLY one thing each episode in blue collar, easy to understand language to give a SHORT OVERVIEW of the term or lesson of the day.
It is specifically designed this way to keep it short and simple.
People can then search out extra info if they wish.
I've never seen a regular series or resource running on Steemit to continually address this basic need so I decided to do it.
A stock exchange does not own shares. Instead, it acts as a market where stock buyers connect with stock sellers. Stocks can be traded on one or more of several possible exchanges such as the New York Stock Exchange (NYSE). Although you will most likely trade stocks through a broker, it is important to understand the relationship between exchanges and companies, and the ways in which the requirements of different exchanges protect investors.
How Does It All Start?
--
The primary function of an exchange is to help provide liquidity; in other words, to give sellers a place to "liquidate" their shareholdings.
Stocks first become available on an exchange after a company conducts its initial public offering (IPO). In an IPO, a company sells shares to an initial set of public shareholders (the primary market). After the IPO "floats" shares into the hands of public shareholders, these shares can be sold and purchased on an exchange (the secondary market).
The exchange tracks the flow of orders for each stock, and this flow of supply and demand sets the stock price. Depending on the type of brokerage account you have, you may be able to view this flow of price action. For example, if you see that the "bid price" on a stock is $40, this means somebody is telling the exchange that he or she is willing to buy the stock for $40. At the same time you might see that the "ask price" is $41, which means somebody else is willing to sell the stock for $41. The difference between the two is the bid-ask spread.
Auction Exchanges - NYSE
--
The NYSE is primarily auction-based, which means specialists are physically present on the exchange's trading floors. Each specialist "specializes" in a particular stock, buying and selling the stock in the auction. These specialists are under competitive threat by electronic-only exchanges that claim to be more efficient (that is, they execute faster trades and exhibit smaller bid-ask spreads) by eliminating human intermediaries.
The NYSE is the largest and most prestigious exchange. Listing on the NYSE affords companies great credibility, because they must meet initial listing requirements and also comply annually with maintenance requirements. For example, for U.S. companies to remain listed, the NYSE companies must keep their price above $4 per share and their market capitalization (number of shares times price) above $40 million.
Furthermore, investors trading on the NYSE benefit from a set of minimum protections. Among several of the requirements that the NYSE has enacted, the following two are especially significant:
Companies must get shareholder approval for any equity incentive plan (for example, stock option plan or restricted stock plan). In the past, companies were allowed to sidestep shareholder approval if an equity incentive plan met certain criteria; this, however, prevented shareholders from knowing how many stock options were available for future grant.
A majority of the board of directors' members must be independent. However, each company has some discretion over the definition of "independent," which has caused controversy. Furthermore, the compensation committee must be entirely composed of independent directors, and the audit committee must include at least one person who possesses "accounting or financial expertise."
The Nasdaq (an Electronic Exchange)
--
The Nasdaq, an electronic exchange, is sometimes called "screen-based" because buyers and sellers are connected only by computers over a telecommunications network. Market makers, also known as dealers, carry their own inventory of stock. They stand ready to buy and sell Nasdaq stocks, and they are required to post their bid and ask prices.
Nasdaq has listing and governance requirements similar to the NYSE. For example, a stock must maintain a $4 minimum price. If a company does not maintain these requirements, it can be delisted to one of the OTC markets discussed below.
Electronic Communication Networks (ECNs)
--
ECNs are part of an exchange class called alternative trading systems (ATS). ECNs connect buyers and sellers directly. Because they allow for direct connection, ECNs bypass the market makers. You can think of them as an alternative means to trade stocks listed on the Nasdaq and, increasingly, other exchanges as well (such as the NYSE or foreign exchanges).
There are several innovative and entrepreneurial ECNs, and they are generally good for customers because they pose a competitive threat to traditional exchanges, and therefore push down transaction costs. Currently, ECNs do not really serve individual investors; they are mostly of interest to institutional investors.
There are several ECNs, including INET (the result of an early 2004 consolidation between the Instinet ECN and Island ECN) and Archipelago (one of the four original ECNs that launched in 1997).
Over-the-Counter (OTC)
--
Over-the-counter (OTC) refers to markets other than the organized exchanges described above. OTC markets generally list small companies, and often (but not always) these companies have "fallen off" to the OTC market because they were delisted from Nasdaq.
Some individual investors will not even consider buying OTC stocks due to the extra risks involved. On the other hand, some strong companies trade on the OTC. In fact, several strong companies have deliberately switched to OTC markets to avoid the administrative burden and costly fees that accompany regulatory oversight laws such as the Sarbanes-Oxley Act. On balance, you should be careful when investing in the OTC if you do not have experience as several penny stocks trade over-the-counter. (To learn more about penny stocks, read our penny stock series).
-- There are two OTC markets:
--
Over-the-Counter Bulletin Board (OTCBB) is an electronic community of market makers. Companies that fall off the Nasdaq often end up here. On the OTCBB, there are no "quantitative minimums" (no minimum annual sales or assets required to list).
Companies that list on the OTC Pink are not required to register with the SEC. Liquidity is often minimal. Also, keep in mind that these companies are not required to submit quarterly 10Qs.
The Bottom Line
--
To be traded, every stock must list on an exchange where buyers and sellers meet. The two big U.S. exchanges are the NYSE and the fast-growing Nasdaq. Companies listed on either of these exchanges must meet various minimum requirements and baseline rules concerning the "independence" of their boards. But these are by no means the only legitimate exchanges. Electronic communication networks are relatively new, but they are sure to grab a bigger slice of the transaction pie in the future.
Finally, the OTC market is a fine place for experienced investors with an itch to speculate and the know-how to conduct a little extra due diligence.
Trading Candle Cheat Sheet:
--
Further Reading/Source/Resources
Friend of the People -- Enemy of the State.
--
I am leaving these images I made here until I figure out one that fits properly and looks right for the first/main image for the post/series.
--
Since Steemit dev's changed the size of the picture frame that shows, it has honestly been a real problem getting images to match the screen, it was perfectly fine months ago before they messed around with it.
SMH.
Thanks for reading, have a nice day.
PixaBay has tons of free pictures for us all to use!!!
Super Easy/Fast Picture Edits / Resizing at: http://www.picresize.com/ and also https://www298.lunapic.com/editor/
If you liked this blog post - please Resteem it and share good content with others!
--
Some of my recent blogs:
--
https://steemit.com/funny/@barrydutton/we-did-it-we-are-bitcoin-forkening-survivors-lol
Most Images: Gif's - via Giphy.com , Funny or Die.com / Pixabay. Today:
If you feel my posts are undervalued or you want to donate to tip me - I would appreciate it very much.
--
LiteCoin (LTC) - LKdsnvSXk9JW99EiNicFMGKc1FXiBo9tUE
Monero (XMR) - d8ecb02c09f70ec10504b59b96bc1f488af28b05933893dfd1f55b113e23fbff
EOS (EOS) - 0xD37bEFf5bf07E3aa432de00cE0AaA8df603A4fB0
Ethereum (ETH) - 0x3Ad69Ff057C9533ca667B2d7E3E557F5eeFd4477
Ethereum Classic (ETC) - 0x5ab2b08d4ce8d454eb9d1ecc65c6d8b0c5f9784c
Bitcoin (BTC) - 18J6RRuzX4V7b2CDbx7tWZYNBLkkGWsvWX
DASH - XgZvsvSZgPkNbmGbRhc3S1Pt2JAc7QHwiS
PIVX - DA3azxQqJiX9t7EviuacpamfNhMi2zGAUh
Stratis (STRAT) - SNsJp6v1jXvKWy4XcXSXfNQ9zhSJJppJgv
ZCash (ZEC) - t1aCPEYELkGaf3GtgGTiCEDo7XfPm4QEwmL
Please note -- I will have limited internet access for awhile -- so PLEASE do not be upset that I cannot reply right away, or to everyone. I am dealing with some changes, and will have limited time online and will be happy if I get a few blog posts up a week.
This has really upset some people but I do not force my opinions on others, or need to communicate every detail of my life or issues, most people do not care anyways. I invested around 10 hours or more a day on Steemit most of my first 13 mths here, trying to build community, put out content and engage people, help and donate to people, and I just do not have that time in my life right now, and that includes for replies and voting/curation.
I have done my best, sorry if you do not understand like some are clearly having a problem with. It's a blogging platform, and I will do my best at everything, and to keep blogging.
Carry On.
--
LiteCoin (LTC) - LKdsnvSXk9JW99EiNicFMGKc1FXiBo9tUE
Monero (XMR) - d8ecb02c09f70ec10504b59b96bc1f488af28b05933893dfd1f55b113e23fbff
EOS (EOS) - 0xD37bEFf5bf07E3aa432de00cE0AaA8df603A4fB0
Ethereum (ETH) - 0x3Ad69Ff057C9533ca667B2d7E3E557F5eeFd4477
Ethereum Classic (ETC) - 0x5ab2b08d4ce8d454eb9d1ecc65c6d8b0c5f9784c
Bitcoin (BTC) - 18J6RRuzX4V7b2CDbx7tWZYNBLkkGWsvWX
DASH - XgZvsvSZgPkNbmGbRhc3S1Pt2JAc7QHwiS
PIVX - DA3azxQqJiX9t7EviuacpamfNhMi2zGAUh
Stratis (STRAT) - SNsJp6v1jXvKWy4XcXSXfNQ9zhSJJppJgv
ZCash (ZEC) - t1aCPEYELkGaf3GtgGTiCEDo7XfPm4QEwmL
Please note -- I will have limited internet access for awhile -- so PLEASE do not be upset that I cannot reply right away, or to everyone. I am dealing with some changes, and will have limited time online and will be happy if I get a few blog posts up a week.
This has really upset some people but I do not force my opinions on others, or need to communicate every detail of my life or issues, most people do not care anyways. I invested around 10 hours or more a day on Steemit most of my first 13 mths here, trying to build community, put out content and engage people, help and donate to people, and I just do not have that time in my life right now, and that includes for replies and voting/curation.
I have done my best, sorry if you do not understand like some are clearly having a problem with. It's a blogging platform, and I will do my best at everything, and to keep blogging.
Carry On.
--
https://twitter.com/BarryDutton/status/939902378815389696