These Wall Street terms may sound a bit like dirty come-on’s, but they actually have important financial meanings. Here are just some of our favorites:
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1. Position: A position is the number of shares of a stock or commodity that a trader plans to buy, sell or short.
2. Long/short: A long bond refers to the 30-year Treasury bond. A short position is more complicated and involves a stock losing its value.
3. Spread: The spread typically refers to the amount the stock is selling for on the market and what a trader wants to pay for it or the difference between a stock’s value over a certain period of time.
4. Big swinging d—: This is the person on Wall Street who is able to bring in the largest client, close the insane deals and generate a huge bonus.
5. Straddle: Straddles allow traders to capitalize on big moves in either direction.
6. Strangle: A strangle is another options strategy when an investor purchases a call and a put with strike prices that are above and below the current stock, ETF or index price.
7. Butterfly spread: Start with a long call butterfly when you purchase one call at the lowest strike price, write two calls at the middle strike price and buy one call at the highest strike price, according to the Options Industry Council.
8. Fill-or-kill order (FOK): “A fill-or-kill order is similar to an all-or-none (AON) order,” according to the industry cooperative. “The difference is that if the order cannot be completely executed (i.e., filled in its entirety) as soon as it is announced in the trading crowd, it is killed (cancelled) immediately.
9. Swing trading: This occurs when someone is trading stocks or options and is attempting to capture short-term movements in the market, but it only last for a few days or up to a couple of weeks.
10. Reverse iron condor: The reverse iron condor is a long call spread and a long put spread designed to profit from a big move in the stock either way.
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