A Glossary of terms and concepts

The first blog as you can tell was written in haste during the close of the market. Now that I have time on my hand I guess it is important to explain certain terms and concepts for those who are not familiar with the trading world.

Long or going Long: This is when you have bought a certain amount of shares of a stock (e.g AMD). This is the classic example of buy low sell high concept.

Short: A little trickier than the previous definition and the best way to explain this would be through an example. Basically this occurs when you know the price of a share is going down in value. So lets assume Mr. Sam has item X worth $10 today and you know that tomorrow it is going to go down to a market value of $5. You simply borrow item X from Mr. Sam (promising to return it to him tomorrow) and sell item X on the market today for $10. Tomorrow you simply go to the market and buy item X which has gone down in value for $5 and return the item X to Mr. Sam while pocketing that extra $5! That is how traders make money regardless of the market going up or crashing.

Rip: A rise in the price levels of a certain equity (stock value is going up)

Tank: A decline in the value of the equity (Stock value is going down)

Level 1:The current Bid and Offer price of the stock on the market (e.g Citigroup is currently 27.80 – 27.81; 27.80 is the Bid while 27.81 is the Ask).

Level 2: Orders sitting at prices below or above the Market price (Level 1) of the stock.

Punch: To hit into the next price level, indicating that you are willing to take the amount of shares instantly instead of waiting on the Bid or Ask level.

Ask Level: This is  the lowest price an investor will accept to sell a stock. In the case of Level 1 ask, that is the current price an investor will accept to sell a stock.

Bid: This is the current bid (level 1) or minimum bid that investors seek to buy a stock.  

Futures: Legally binding standardised agreements to buy or sell a commodity, currency or security at a fixed time in the future, at a price agreed upon today (source: www.nzsuperfund.co.nz/index.asp)

S&P: An Index of the 500 widely held US Stocks. (Standard & Poor; think of it as a basket of major stocks which may indicate the condition and movement of the market).

DOW: Same as the above but a different index.

Feel free to add any terms that you think are missing or unclear.

- Danial Jameel (www.daytraderlog.com)

The Volatile NYSE Market… and yes the introduction

Volatility: I guess the best way to start of this blog would be to scratch your head over the current market volatility. The Feds cut rate by .50 last week which did little to calm the market and so far no big push has been seen (however it did help the market recover and the S&P futures to a more bearable 1340-1390 range). It seems investors are playing it cautious and we see every big jump followed by profit taking. 

Today the futures seemd to be in the 1340-1360s range with no major moves on the stock apart from the massive dirty plays going on these days. For Day traders who are used to seeing fake size and pushers will be amused at the new heights this is being taking towards. Case in point: One gentleman/lady (yes girls trade too!) decided to put up almost a million shares on city group (Ticker: C), push it for two levels and then pull it a few seconds later after getting short on the other end (to our bitter amazement). This is just one example of the kind of games being played for those who play very short ranges. Now my question is have the traders gone so desperate to make some $$$ that we are seeing so much fake size all the time or have the day traders realized that the big guys (yes that includes the specialist) are in too much trouble these days and letting them get away with it.

Desperate times call for desperate measures i suppose.

And yes the introduction…

   This Blog is all about the NYSE and Day Trading. It is also a quasi personal journal which will record my daily progress/adventures into the crazy world of NYSE. Incase you are wondering who the hell I am, well simply put I began trading in the winter of 2005 for a major day trading firm in Canada (sorry no names). I will do my best to reveal what I see everyday in the market and document both my major successes (when I have them) and failures (we all loose sometimes). Also I will be dealing the NYSE market with major emphasis on stocks i trade (which is usually large caps or fast moving stocks).  I hope this blog will be useful to you guys for both entertaining and trading purposes ( and a learning curve so my mistakes are not repeated).

So Lets get the ball rolling with a Jim Cramer favourite quote:

“Bulls and Bears Make money. Only Pigs get slaughtered…”       

-Danial Jameel (www.daytraderlog.com)