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Flashcards

Stock Trading

Node js English 63 cards

Cards in this deck (63)

  1. 1What is the interesting thing about the dance of Resistance and Support?The previous Resistance becomes the latter's support.
  2. 2What is the first step in trading?Find out Overall trend, Bearing or Bullish.
  3. 3What's is the next step after finding out the overall trend?Note the phase: Run-up or Pullback?
  4. 4What is a trading strategy?Series of patterns in the market that we build rules around it.
  5. 5What is something unexpected about support and resistance?They can also be angular.
  6. 6What is the first movement called before the RUN and PULL-BACK?Phase 1
  7. 7What is an angular ceiling?Sometimes when you line al the ceilings, the line can be angular.
  8. 8After Condition > Phase > what do you think about next? What tools do you use?Where is price going to roll-over?
    Support and Resistance.
  9. 9What is the ultimate goal of looking at candle charts?Calculate probability to get into the best point possible.
  10. 10What is a Doji candle?Thin candle. Opens and closes at the same place. Signifies indecision.
  11. 11What is Confluence?The mixture of confirmation and confidence about an opportunity, because nothing is 100%
  12. 12How do you apply Fibonacci analysis?Draw a line from the recent pullback to the recent low (for a Bearish trend)
  13. 13What is a 382 retracement?When you apply the fibonacci retracement, it will create an triangle with several horizontal lines. People look for 382 at the point of change of price. Indication of a strong trend.
  14. 141.1000, 50, 1.2000 are examples of?Even-handed numbers?
    They appear when you draw the Ceiling lines.
  15. 15What is the cause of preference for even-handed numbers?Human psychology loves neat-cut numbers.
  16. 16What is "Confluence"Multiple signals pointing at an imminent change in stock trend.
  17. 17Suppose, there is a bearish trend, and a pull-back, and there might be a reversal, how do you choose how to enter?Enter at a stock value lower than the opening, Set stop loss at a higher point.
  18. 18What is a 3-bar Reversal?When you have Long green - short green - and Long Red, OR
    When you Long Red - short red - Long Green
  19. 19What is Buy-Limit?Setting a limit, if the price of the stock falls below that, your broker will buy that.
  20. 20What is Sell-Limit?Setting a limit, if the price rises above that, your brokers will sell that stock.
  21. 21What is Buy-Stop order?If you hit a certain level (higher than the current price), you buy the stock, thinking it will go higher further. Thinking the market will continue going up.
  22. 22What is Sell-Stop order?If you hit a certain level(lower than currently trading number), sell that position. Thinking the market will continue go down
  23. 23What is at-market?Instant buy or sell, at a given rate at that exact moment.
  24. 24What can the five types of orders be used for?1. Target positioning
    2. Getting into a trade
    3. Stop loss
  25. 25What are the elements of STOP LOSS?Entry order and Target order
  26. 26What is STOP LOSS?Tool to reduce loss by selling the stock if the hits a certain low.
  27. 27What are the different tools to execute STOP LOSS?Buy Limit, Sell Limit, At Market, Buy-Sell, Sell-Stop
  28. 28How many types of OPTIONS Trading are there?1. CALL options
    2. PUT Options
    3. Covered CALLs
    4. Cash-secured Puts
  29. 29What are Options, basically?Contracts, Deal with another person
  30. 30An example: Say the price of YELP is $36. Give me an example of an CALL Option.I offer you to buy YELP at $38 a share for the 30. For that, you pay me 80 cents per share.
  31. 31How is the YELP CALL option profitable?If the stock price of YELP goes higher than $38 in the next 30 days.
  32. 32When you buy an CALL OPTION contract, must you buy that share immediately at the strike price?No. Buying is not compulsory, and you decide based on the price of the share.
  33. 33When you goto the market for options, what are the different things you see?The OPTION contracts at different price points: Strike price, Breakeven, To breakeven, % change, Change, Ask Price(Premium)
  34. 34In terms of the stock price going up or down, if buy a CALL option, what do you want the stock to do?Go up
  35. 35What is convenient about OPTIONS contracts?You can simply sell the OPTIONs contract like as you are selling a stock. You don't have to buy and sell the underlying stock.
  36. 36When you would you wanna exercise your OPTIONs contract and not sell it immediately when the underlying stock value sky-rockets?When you want to hold on to the stock for the long-run.
  37. 37Which one is the more attractive CALL option: YELP is trading at $36. a. I offer you CALL option at $38. b. I offer you a CALL option at $39.a. CALL option at $38
    Therefore this has a higher premium
  38. 38Which one is more attractive and why? YELP is trading at $36. a. I offer you CALL option at $38 for 1 month. b. I offer you a CALL option at $38 for 1 year.b. CALL option at $38 for 1 year, Because it is uncertain, so longer time is more comfortable.
  39. 39What's the benefit of Covered Call for the seller?You get periodic income. You cannot lose money by selling the call option.
  40. 40What are the different scenarios for CALL option?1. Buy a call option and sell it.
    2. Sell a call option.
    3. Buy a stock and sell the call option on the stock.
  41. 41How is COVERED CALL option different from a normal CALL option?You buy a stock and sell the call option on that. You own the stock itself. You always get paid, but if the skyrockets, you won't be benefited.
  42. 42What happens to the value of unsold CALL options when the price of the stocks goes down?People will pay less and less for the premium
  43. 43What is the risk of a shorter call option than a longer one?If the price decreases after the shorter duration, people will pay less premium when the duration ends. In longer time frame, you know how much you are going to make in that duration.
  44. 44What is the minimum number of shares for call options?100 shares. Each 100 block is called a Contract.
  45. 45What is a technicality in terms of COVERED CALL option in many platforms?You buy the stock and sell the CALL option at the same time. When the customer exercises their option, the share is sold automatically without your involvement.
  46. 46How does higher volatility of the stock affect the call option premium?It goes up, to compensate you for the uncertainty.
  47. 47What is the downside of a COVERED CALL option?You are limiting your upside potential, i.e. if the stock skyrockets, you won't be benefited.
  48. 48What is a PUT option?Agreement, Seller says: "I give you the option that within the next month, sell me the stock at a lower price, at a premium"
  49. 49What are the perspectives you need to consider by considering CALL options?The perspective of the BUYER, The perspective of the SELLER of the OPTION.
  50. 50Suppose Yahoo shares are at $38. Give me a scenario about how you can make money by buying a PUT option of $35 for the next 30 days..You buy the option at $35 means you can sell the stock at $35 within the next 30 days. If the stock plummets to $20 per share, you can go to the market, buy the shares at $20 and sell it to the seller at $35 and make $15 profit.
  51. 51What is the number one criteria to decide profit/loss after you buy a CALL option.The price of the stock has to go below the strike price.
  52. 52If the Strike Price Increases, the PUT Option value.....Increases
  53. 53What are the two ways you can make money with OPTIONs trading?Either by buying the option or selling the option.
  54. 54What is the ACTION when you are selling a PUT option?SELL TO CLOSE
  55. 55What is Cash-Secured PUTS basically used for?Decrease risk, create passive income.
  56. 56What is the odd feature of Cash-secured PUTs?You can buy a stock at a discount. If not, you get paid some money.
  57. 57Suppose, SIRI is trading at $4.89. What does it mean when you sell a cash-secured PUT of SIRI for $4.50 for one month?It means, in the next 30 days, if SIRI falls to 4.50 or below, you will buy that share. If it does not, you will not buy it. Regardless, you get paid the premium.
  58. 58How is return on investment calculated for cash-secured put?Premium/Strike Price
  59. 59How is annualized rate of return calculated?Return on investment x 12 in percentages.
  60. 60What is the OPTIONS Strategy for Cash-secured PUT?Single Order
  61. 61What is ACTION for Cast-secure PUT?Sell to OPEN.
  62. 62What does TIme-in-Force DAY mean?That means if the order doesn't fill that day, than the order gets cancelled.
  63. 63How do you buy a stock for a discounted price?By Selling a Cash-Secured PUT for that stock.

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Flashcards on Stock Trading, created by Node js on 20/02/2025.
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