Security Futures Training - Module 1:  Stocks and Stock Options

Introduction to Stocks

Capital formation
Shares in Corporate Ownership
Common Stock
Preferred Stock
Restricted Stock

  • Corporate Actions
  • Stock splits
  • Reverse stock splits
  • Mergers and takeovers
  • Spin-offs

Stock and Stock Options Markets and Clearing Organizations

The Nasdaq Stock Market
NYSE, AMEX and Regional Stock Exchanges
Intermarket Trading System
Electronic Communications Networks
Options Exchanges
Options Clearing Corporation
Product fungibility

Trading Stocks

Price quotation conventions
Short selling

  • Uptick rule
  • Stock loan
  • Affirmative determination
  • Dividends

Types of orders (different than those in the futures markets)

  • All-or-none orders

Immediate-or-cancel orders
Fill-or-kill orders
Trade settlement
Insider trading
Delayed openings
Trading halts
Circuit breakers


Stock Options and Stock Index Options


Basic description


Stock Market Analysis and Related Statistical Measures


Stocks by sector
Stocks by strategy and Industry outlook

  • Growth stocks
  • Value stocks
  • Income stocks

Stocks by market capitalization

  • Large Cap
  • Mid Cap
  • Small Cap

Statistical measures

  • Alpha
  • Beta

Corporate Announcements and Other News and Information


Quarterly earnings reports
Corporate statements between reports
Insider filings
Short interest reports


Income Statement and Balance Sheet


General description
Earnings per share
Price/Earnings ratio
Dividend yield)
Book value
Liquidity measures

  • Current assets
  • Quick assets
  • Current liabilities
  • Working capital
  • Current ratio
  • Acid-test ratio
  • Cash flow

Margin for Stocks and Stock Options


Initial and maintenance margin for stock purchases
Initial and maintenance margin for short stock positions
Options margin

  • Premium payments
  • Margin for short positions

Securities Investor Protection Corporation


Purpose of SIPC
Coverage limits
Coverage amounts