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Glossary


Market Holidays 2019

1/1---- New Years Day
1/21--- Martin Luther King Day
2/18--- Washington's Birthday/President Day
4/19---- Good Friday
5/27--- Memorial Day
7/4---- Independence Day
9/2---- Labor Day
11/28- Thanksgiving Day
12/25- Christmas Day


The markets will close at 1pm on July 3, Nov. 29 and December 24.
The markets will be open Columbus Day and Veterans Day

The Bullseye Bulletin will be closed between Christmas and New Years Day


Online Brokers


Below is a list of online brokers. You will need an online broker or traditional broker in order to use this site.


E*TRADE Financial
1-800-387-2331

Fidelity
1-800-343-3548

Firstrade
1-800-869-8800

Interactivebrokers
1-877-442-2757

MB Trading
1-866-628-3001

Merrill Edge
1-888-637-3343

Schwab
1-800-435-4000

Scottrade
1-800-619-7283

Muriel Siebert
1-800-872-0444

TD Ameritrade
1-800-454-9272

Tradeking
1-855-880-2559

TradeStation Securities
1-800-808-9336

USAA Brokerage
1-800-531-8722

The Bullseye Bulletin does not represent or is compensated in any way by any broker. The brokers above require a minimum of $25,000+ in the account at all times for active traders to trade on margin. Commissions for some of the brokers drop for accounts with high balances or for very active traders while others offer a flat fee. The brokers above are insured by SIPC.


Glossary


ADVANCE/DECLINE INDEX- The total number of advancing stocks compared to declining stocks. The advance/decline index is used to measure the breadth of the market.

AFTER-HOURS TRADING- Buying and selling stocks when the major markets are officially closed. Once reserved for institutional investors, individual investors may now participate. Stocks are traded after hours on a ECN, which match buyers and sellers with a computer system in order to execute trades.

AMEX- American Stock Exchange.

ARBITRAGE- Attempting to profit by simultaneously purchasing and selling the same or equal stocks in a manner which takes advantage of price differences prevailing in different markets.

ASK- Also known as the offer price, is the lowest price a broker will sell a stock. The ask will always be higher than the bid.

BEAR MARKET- A market where falling prices is the dominating trend.

BID- The highest price a broker will pay for a stock. The bid will always be lower than the ask.

BLOCK TRADE- An order/trade submitted for sale or purchase of a large quantity of stocks, generally $10,000 shares of stock or $200,000 worth of bonds.

BOTTOM- The lowest price or the lowest level of support when charting a stock, commodity, index or the overall market.

BOTTOM FISHING- An investor who looks for bargains among stocks whose prices have dropped dramatically. The investor believes that the stock price has hit a bottom and will recover.

BREAKOUT- When a stock rises above its resistance level or drops below its support level which is usually followed by heavy volume and increased volatility. A breakout is mostly used to refer to a situation where the price breaks above a level of resistance and heads higher rather than the reverse.

BULL MARKET- A market where rising prices is the dominating trend.

BUYING POWER- The money an investor has available to buy stocks. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available. The maximum margin rate is usually 50% so if you have $1,000 cash in a margin account your total buying power is $2,000. For a non-margin account, the buying power is equal to the amount of cash in the account.

CAPITULATION- Investors giving up any previous gains in stock price as investors sell equities to get out of the market and into less risky investments. Capitulation involves extremely high volume and sharp declines. Panic selling is usually a good indicator of capitulation. During this time, there are great bargains to be had.

CASH ACCOUNT- A brokerage account in which the customer is required by Regulation T to pay the full amount due by the settlement date for securities purchased. Buying on margin or borrowed money is not permitted.

CBOE VOLATILITY INDEX- There are three volatility indexes on the Chicago Board of Options Exchange. The VIX is the most widely used, tracking the S & P 500, the VXN tracks the Nasdaq, and the VXO tracks the DJIA. These indexes are a contrarian sentiment indicator that helps determine too much optimism or pessimism in the market.

CLOSING PRICE- The last transaction price for a stock at the end of a trading day.

CHICAGO BOARD OF OPTIONS EXCHANGE (CBOE)- an exchange where option contracts, including stock options, LEAPS, interest options, foreign currency options and index options are traded.


CONSUMER PRICE INDEX (CPI)- An inflationary indicator that measures the change in the cost of goods and services, including housing, electricity, food and transportation, that the average consumer purchases.

CORRECTION- A temporary reversal in the market, usually a price decline of at least 10% interrupting a period of rising prices. A correction is considered beneficial for the long term health of the market.

DAY TRADE- The buying and selling (or the short sale and cover) of the same stock on the same day.

DEAD CAT BOUNCE- A steep decline in the price of a stock followed by a quick moderate rise in the price of a stock followed by a major decline.

DEFLATION- The decline in prices of goods and services which in turn increases the purchasing power of money. Deflation is caused by a significant drop in demand. Deflation is the opposite of inflation.

DEPRESSION- A prolonged recession during which business activity drops significantly. Severe declines in productivity, investment, and high unemployment.

DIP- A small temporary drop in a stock price during an upward trend.

DIVERSIFICATION- A portfolio strategy designed to reduce risk by combining different kinds of investments.

DJIA- Dow Jones Industrial Average (referred to as the Dow) is the most widely used indicator of the overall condition of the stock market. It is a price weighted average of 30 actively traded stocks on the NYSE and NASDAQ.

DOLLAR COST AVERAGING- An investment strategy designed to reduce volatility in which stocks are purchased at a fixed dollar amount, on a regular schedule, regardless of the share price. More shares are bought when the prices are low and fewer shares are bought when prices are high.

DOUBLE BOTTOM- A technical analysis term used to describe the price drop of a stock, a rebound, and then another drop to approximately the same price level followed by another rebound. The double bottom looks like the letter "W" on a chart. The twice touched low is considered a support level.

DOUBLE TOP- A term used in technical analysis to describe two successive rises to approximately the same price level. On a chart this looks like the letter "M" because each rise is followed by a drop. The twice touched high is considered a resistance level.

DOUBLE WITCHING DAY- When option contracts and future contracts expire on the same day. Double witching day occurs eight times a year on the third Friday of every month except March, June, September and December.

DOWN TICK- A stock market transaction or sometimes a quote at a price lower than the preceding transaction for the same stock.

DOWNTREND- Downward price movement of a stock or the overall market.

DUE DILIGENCE (DD)- Researching a stock before buying it. Due Diligence is consisted of checking a company's operations, management, valuation ratios and technical indicators. An investigation or audit of a potential investment.

ECN (ELECTRONIC COMMUNICATIONS NETWORK)- An electronic system that brings buyers and sellers together for the electronic execution of trades. An ECN connects major brokerages and individual traders so that they can trade directly between themselves without having to go through a middleman, such as the market makers.

ENTRY PRICE- A price level predetermined as a setup point into a specific stock. Once the entry price hits the trader will enter the position determined by the setup. This could include shorting a stock if the Bullseye Bulletin thinks the price will drop or going long if we think the price will rise.

FLOAT- The number of shares publicly owned and available for trading. The float is calculated by subtracting restricted shares from outstanding shares.

FUNDAMENTALS- Information that contributes to the economics of a company such as growth revenues, earnings, management and cash flow which can be used as an investment strategy. A company with little debt and a lot of cash is considered to have strong fundamentals.

GAP- A break between prices on a chart that occurs when a price of a stock makes a sharp move up or down with no overlap in the trading ranges for two consecutive days.

GOOD TIL CANCEL ORDER (GTC)- Good Til Cancel order is an order to buy or sell a stock at a set price which remains in effect until it is executed or the investor decides to cancel it. GTC orders are canceled by the brokerage firms after 30-90 days. If the order is not a GTC order, the order will expire at the end of the trading day the order was placed.

GROSS NATIONAL PRODUCT (GDP)- The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. The GDP report is released at 8:30 am EST on the last day of each quarter and reflects the previous quarter.

HEDGE- An investment made in order to reduce the risk of adverse price movements in a stock, by taking an offsetting position in a related stock such as an option or a short sale. A perfect hedge reduces your risk to nothing, except for the cost of the hedge.

HOUSE MAINTENANCE REQUIREMENT- Level of equity that a brokerage house requires on a customer's margin account, it is usually higher than the level required by the exchange or Nasdaq in order to be able to borrow for short sales or other purposes.

INDICATOR- Indicators is a technical or fundamental measurement that securities analysts use to forecast the markets direction.

IPO- Initial Public Offering. The first sale of stock by a company to the public.

INFLATION- The prices of goods and services rise (measured by CPI and PPI) followed by purchasing power falling. Overtime, as the cost of goods and services increase, the value of the dollar falls and the consumer won't be able to purchase as much with that dollar than previously could. Inflation has historically occurred when a country prints too much of its currency in too short of time. Central Banks attempt to control inflation by raising interest rates which decreases the amount of money in circulation.

LEVEL 1- A trading service consisting of real time quotes of the best bid/ask prices for a given Nasdaq or OTCBB stock.

LEVEL 2- In addition to showing the real time bid/ask quotes (level 1), also shown are all the market makers and ECN's at different price levels on the bid and ask. Level 2 allows the trader to watch the trades being executed in real time.

LIGHT VOLUME PULLBACK- A technical correction toward an area of support in a stock that occurs on lower than average volume. The low volume is a signal to traders that the trend is not reversing.

LIMIT ORDER- An order to buy or sell a stock at a specified price or better. This ensures that the investor will never pay more/less for the stock beyond the set limit price.

LISTED SECURITY- A stock that is traded on a major exchange.

LIQUIDATION- Converting stocks to cash.

LIQUIDITY- The high level of trading activity which makes it easier to convert stocks or assets quickly into cash.

LONG (LONG POSITION)- The buying of a stock with expectation that the stock will go higher or rise in value.

LONG TERM EQUITY ANTICIPATION SECURITIES (LEAPS)- Leaps are identical to traditional exchange traded options except they expire up to three years in the future, where traditional options expire within nine months max.

MAINTENANCE CALL- See margin call.

MARGIN- Using money borrowed from a broker to purchase stocks.

MARGIN ACCOUNT- A brokerage account in which the broker lends the customer cash to purchase stocks. The loan in the account is collateralized by the securities and cash. If the value of the stock drops sufficiently, the account holder will be required to deposit more cash or liquidate a portion of the stock. The Federal Reserve limits margin borrowing to, at most, 50% of the amount invested.

MARGIN CALL- A brokers demand on an investor using margin to deposit additional money or liquidate stocks in their margin account in order to return the balance to its required level.

MARKET MAKER- A brokerage or bank that maintains a bid and ask price in a stock by being available to buy or sell stocks at publicly quoted prices.

MARKET ORDER- A buy or sell order in which the broker immediately executes the order at the currently available price.

MOMENTUM TRADING- This strategy relies on short term movement where investors capitalize on a sudden rise or drop in a stock price determined by technical indicators. Momentum trading involves market timing which is very risky and not recommended for novices.

MOVING AVERAGE- A technical analysis term showing the average price of a stock over a specified time period, the most common being 20,30,50,100 and 200 days. Moving averages are generally used to measure momentum and define areas of possible support and resistance.

NASDAQ- National Association of Securities Dealers Automated Quotations.

NASDAQ 100- An index which tracks the performance of a select 100 stocks listed on the nasdaq. Most of the companies are the largest on the exchange based on market capitalization. The stocks on the list is subject to change.

NYSE- New York Stock Exchange (also known as the "Big Board").

OPEN- The start of trading on a securities exchange

OPENING PRICE- The price at which a stock starts trading at the open of an exchange.

OPEN ORDER- An order to buy or sell a stock that remains in effect until its executed or canceled by the customer.

OVER-THE-COUNTER (OTC)- A stock which is not traded on a major exchange due to the inability to meet listing requirements. The phrase "over-the-counter" can be used to refer to stocks that trade by way of a dealer network as opposed to on a centralized exchange. Although Nasdaq operates as a dealer network, Nasdaq stocks are generally not classified as OTC because the Nasdaq is considered a stock exchange. OTC stocks are generally unlisted stocks which trade on the Over the Counter Bulletin Board (OTCBB) or on the pink sheets. The OTCBB stocks are either penny stocks or are offered by companies with bad credit.

OVERBOUGHT- The demand for a certain stock unjustifiably pushes the price to levels (usually on high volume) which do not support the fundamentals. A stock that has experienced an upward movement to far to fast is considered overbought.

OVERSOLD- The price of a stock is unjustifiably pushed to extremely low levels (usually on high volume) which do not support the fundamentals. the stock price falls to far to fast is thought to be oversold. This usually is a result of panic selling or market overreaction.

PAPER TRADE- Simulating trades without real money to practice or test theories.

PENNY STOCKS- High risk stocks that are usually under a dollar.

PINK SHEETS- A daily listing of bid and ask prices for over-the-counter stocks, not included in the Nasdaq OTC listings, published by the National Quotation Bureau and used by brokerages. The stock symbol will end in ".PK".

PORTFOLIO- Different investments owned by the same individual or organization.

PRE-MARKET TRADING- Buying and selling stocks before the major markets open. Once only available to institutional investors, individual investors can now buy and sell stocks between 8:00-9:15 am EST. Pre-market trading usually has limited volume and liquidity making large bid/ask spreads common. Pre-market trading sometimes allows the trader to judge the strength and direction of the market before regular trading hours. Trades are executed through a computer system known as ECN.

PRICE/EARNINGS RATIO (P/E RATIO)- A valuation ratio of a company's current share price to its per share earnings. Calculated as: Market Value per Share divided by Earnings per Share (EPS) equal P/E ratio. For example, if a company is currently trading at $52.00 a share and earnings over the last 12 months were $2.35 per share, the P/E ratio for the stock would be 22.12 ($52/$2.35). Companies with high P/E ratios are considered "risky" investments than those with low P/E ratios, since a high P/E ratio signifies high expectations. The last years P/E ratio would be actual, while current year and forward year P/E ratio would be estimates but in each case the P, in the equation is the current price. Companies that are not currently profitable (ones with negative earnings) don't have a P/E ratio at all.

PROFIT TAKING- The action taken by investors to sell when prices are rising in order to secure gains. Profit taking results in a temporary drop in market prices.

PRODUCER PRICE INDEX (PPI)- An inflationary indicator published by the US Bureau of Labor Statistics to elevate wholesale price levels in the economy. PPI measures price change from the perspective of the seller.

QUADRUPLE WITCHING DAY- A day in which contracts for stock index futures, stock index options, stock options and single stock futures (SSF) all expire. Quadruple witching days occur on the third Friday of March, June, September and December.

RALLY- A substantial rise in the price of the stock or the overall market, following a decline. This type of price movement can happen during either a bull or bear market, known as a bull market rally or bear market rally, respectfully.

RECESSION- Two or more consecutive quarters of negative growth measured by the country's gross domestic product (GDP-a technical indicator for inflation). Recessions are marked by declines in productivity, investment, and high unemployment.

RESISTANCE (RESISTANCE LEVEL)- The level at which the stock stops rising due to an increased selling interest which starts to develop during a rally.

SECURITIES & EXCHANGE COMMISSION (SEC)- A government agency created to regulate and supervise the securities markets and to protect investors.

SHAKEOUT- Smaller and weaker investors get driven out of a stock because of uncertainty or recent bad news in the stock or industry.

SHORT (SHORT POSITION)- The sale of a stock with the expectation that the stock will fall in value.

SHORT SELLING- The selling of a stock that the seller does not own with the intention of buying it back at a lower price for a profit.

SHORT SQUEEZE- When the price of a stock rises and investors who sold short rush to buy it to cover their short position and cut their losses. As the price of the stock rises more short sellers feel compelled to cover their positions.

SIDEWAYS TREND- The horizontal price movement that occurs when supply and demand are nearly equal. A sideways trend is regarded as a period of consolidation before the stock continues in the direction of the previous move. During this time stocks usually trade between their high and low prices, known as a trading range.

SIPC- Securities Investor Protection Corporation- A non-profit corporation created by an act of congress. It insures brokerage accounts up til $500,000 per customer and up to $100,000 on cash, in the event of brokerage bankruptcy.

SPREAD- The difference between the current bid and the current ask price of a stock in exchange trading or OTC trading.

STAGFLATION- Slow economic growth, rising consumer prices and high unemployment accompanied by inflation. A period of low GDP growth in a high inflaton period.

STAGNATION- A period of little or no economic growth. Economic growth of less than 2-3% is considered stagnation. A period of low trading volume or inactive trading in stocks.

STOCK SPLIT- A corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same, compared to pre split amounts, because no real value has been added as a result of the split. For example, the most common stock split is 2-1 in which each share becomes two shares and the stock price gets cut in half. This is done to make a stock with a very high price more affordable to small investors.

STANDARD AND POORS 500 INDEX (S & P 500)- An index of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value and its performance is thought to be representative of the stock market as a whole.

STOP LOSS LIMIT ORDER- This order combines a stop and a limit order. This type of order is used to sell or buy a stock no lower(for a sell) or higher(for a buy) then the preset price. A brokerage cannot guarantee that the order will be executed at the preset price in a fast moving market or it is possible to get a bad fill. If a stock gaps up or down, above or below the preset price, this type of order may execute if the stock "bounces back".

STOP LOSS ORDER- An order placed with a broker to sell or buy a stock when it reaches a certain price. A stop loss order is used to lock in profits or to avoid further losses.

SUPPORT (SUPPORT LEVEL)- The level at which a lot of buyers enter a stock making it difficult for the stock to fall below a certain price during a decline.

SWING TRADE- A trading strategy that attempts to create profits by holding positions for a short period of time, usually a couple of days to a week.

TARGET PRICE- Price of which the investor is hoping to make a profit.

TECHNICALS- Technical indicators do not analyze any part of the fundamental business like earnings and revenues. Technical indicators are used by active traders in the market, as they are primarily used for analyzing short term price movements of stocks and commodities. Technical analysis examines concepts like moving averages, support and resistance, advance and decline lines, relative strength, movement and volatility.

TOP- The highest price or the highest level of resistance when charting a stock, commodity, index or the overall market.

TRAILING STOP- A stop loss order set at a percentage level below the market price for a long position (above market price for a short position). If the market price rises, the stop loss price rises proportionately, but if the stock price falls, the stop loss price doesn't change (opposite for a short position). Using a trailing stop allows you to let profits run while cutting losses at the same time.

TRIPLE BOTTOM- A technical analysis term used to describe a chart in which the price of a stock has made three approximately equal bottoms over a period of time and then broken through the resistance level.

TRIPLE WITCHING DAY- An event that occurs four times a year on the third Friday of March, June, September and December in which stock options, stock index options, and stock index futures expire.

UPTICK- A stock market transaction (sometimes a quote) at a price higher than the proceeding transaction for the same stock.

UPTICK RULE- A former SEC rule requiring that every short sale transaction be entered at a price that is higher than the price of the previous trade. The uptick rule prevents short sellers from accelerating downward momentum when the price of a stock is already experiencing sharp declines.The SEC eliminated the rule on July 6, 2007.

UPTREND- Upward price movement of a stock or the overall market.

VOLATILITY- The relative rate at which the price of a stock moves up and down. Volatility is found by calculating the annualized standard deviation of daily change in price. If the stock price moves up and down rapidly over a short period of time it has high volatility. If the price barely moves, it has low volatility.

VOLUME- The number of shares traded in a stock or an entire market during a given period of time. It measures the activity that trade hands from sellers to buyers.

WASH SALE RULE- An IRS rule prohibiting a taxpayer from claiming a loss on a sale of an investment if that same investment was purchased within 30 days before or after the sale date. The rule was imposed to crack down on taxpayers trying to get a tax reduction from a wash sale.



The Bullseye Bulletin, Inc.