Series 7 Equities

Short Against the Box

When a customer is long a stock in their account and sells the same stock short, this is considered to be a neutral market position.

Short position

Investor "borrows" stock from their B/D and then sells the stock that they borrowed.

Time and Price Discretion (Not Held Order)

Oorders where the RR determines the Time and Price ONLY. The RR cannot determine the Size of the order or the Security being traded.

Short Sale

attempts to make money by borrowing and then selling a company’s stock at a high price and then later buying and replacing that amount of stock at a lower price. Investors that sell stock short generally expect the market price of the stock to decline (bearish).

Short Sale

The sale of stock by a customer who has borrowed the stock from their Broker-Dealer. Customers intend to make money at a later date by buying the stock at a lower price and replacing the shares that they borrowed.

Long Position

When an investor "buys" and owns any security.

Discretionary Authority

When a person other than the individual who owns the account has discretion to make purchases and sales in an account. This can be a registered representative at the firm, or an investment adviser representative, etc. Prior to executing discretion, written authorization from the client is required.

Common stock

Equity security that represents ownership in a corporation. Those who purchase common stock are referred to as shareholders and have equity in the corporation.

Regular way settlement

Trade date plus three business days (T + 3).

The order of asset distributions upon liquidation

1. Taxes 2. Secured debt 3. Unsecured debt 4. Preferred stockholders 5. Common stockholders

Preferred stock

Equity security that represents ownership in the corporation and has priority over common stock in receiving dividends and sharing in assets if the company is dissolved. Typically pays a fixed dividend and generally classified as a fixed income security.

Record date

Date on which the corporation closes the updating of the stock record book.