New Issues & The Primary Market
Follow-on offering or subsequent offering
Additional Public Offering (APO)
Created the Securities Exchange Commission
The Securities Act of 1934
If a person believes that a given market or stock is going to go down in value
Bearish
Authorized, Issued, Outstanding or Treasury
Classes of Common Stock
Dividend Preference
Priority at Dissolution Over Common Stock
Benefits of Owning Preferred Stock
Requires full and fair disclosure in connection with the sale of securities to the public
Securities Act of 1933
A place for the buyers and the sellers of securities to connect and transact securities
Secondary Market
The highest amount someone is willing to pay for the security
The Bid Price
An unlisted security trading at less than $5 per share
Penny Stock
created when common shares are purchased in the foreign company's home market
American Depository Receipt (ADR)
Income of at least $200,000 for the last 2 years or net worth $1 million or more
Accredited Investor
A BD that maintains inventory in a given security and buys and sells the security throughout the day
Market Maker
Buy to open, sell to close
&
Sell to open, buy to close
Long Position
&
Short Position
Large-cap companies that have a long history of steady dividend payments
Blue Chip Stocks
Accrues payments due to its shareholders in the event dividends are reduced or suspended
Cumulative Preferred Stock
Securities offerings up to $75 million in a 12-month period
Tier 2 Offering
A market for institutional investors in which large blocks of stock, both listed and unlisted, trade in transactions unassisted by BD's
Fourth Market
Day Order
Good-til-canceled (GTC) Order
Market-at-open or Market-on-close Order
Time Restriction
The date when a company's BOD approves a dividend payment
Declaration Date
A company can buy back from investors at a stated price after a specified date
Callable Preferred Stock
Distribution of registration statement, a cooling-off period, and the filing of a final prospectus
Steps the Securities Act of 1933 requires you to take before a new issue is brought to the market
Receives and delivers payments and securities on behalf of both parties (buyers and sellers)
Clearing Agency
Settlement occurs by the end of the business day either one or two days following the trade date
Regular Way Settlement
Value Risk
Decreased or No Dividend Income
Low Priority at Dissolution
Risks of Owning Common Stock
Applies to shares that are sold through a nonstandard offering and are subject to resale restrictions and to sales by persons who are classified as insider of the issuer
Rule 144