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Stock Analysis and Order Types

Fundamental analysis calculates a stock's intrinsic value using economic factors like financial statements and ratios, taking a long-term approach. Technical analysis uses historical price and volume data in charts to identify trends and predict future price movements, taking a short-term trading approach. Examples include evaluating AOL from 2001-2002 using technical analysis, and valuing the iPhone using fundamental analysis by looking at Apple's financials.

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Rambabu Undabatla
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113 views4 pages

Stock Analysis and Order Types

Fundamental analysis calculates a stock's intrinsic value using economic factors like financial statements and ratios, taking a long-term approach. Technical analysis uses historical price and volume data in charts to identify trends and predict future price movements, taking a short-term trading approach. Examples include evaluating AOL from 2001-2002 using technical analysis, and valuing the iPhone using fundamental analysis by looking at Apple's financials.

Uploaded by

Rambabu Undabatla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Fundamental Analysis

Technical Analysis

Calculates stock value using

Uses price movement of security to predict

Definition economic factors, known as

future price movements

fundamentals.
Data

Financial statements

Charts

When price falls below

When trader believes they can sell it on for a

intrinsic value

higher price

Long-term approach

Short-term approach

Investing

Trade

Return on Equity (ROE) and

Dow Theory, Price Data

gathered
from

Stock
bought

Time
horizon

Function

Concepts
used

Return on Assets (ROA)

iPhone Evaluation

AOL from November 2001 through August

([Link]

2002

Example [Link]/2012/08/applescrown-jewel-valuing-

([Link]
s#Prices_move_in_trends)

[Link] )
Vision

looks backward as well as


forward

looks backward

Types of Securities Orders


There are six types of securities orders:
1. A market order is the default; it is an order to buy or sell
securities at the current market price, and it will be filled as
long as there is a market for the security.

2. A limit order is an order to buy or sell securities at a specified


price. A limit order may also be placed "with discretion",
meaning the floor broker executing the order may use her
discretion to buy or sell at a set amount beyond the limit if she
feels it is necessary to fill the order.

3. A stop order is an order either to buy a stock at the market


price when the price rises to a certain level, or to sell a stock at
the market price when the price falls to a certain level.

4. A stop-limit order is similar to a stop order, but it becomes a


limit order, rather than a market order, when the security trades
at the price specified on the stop.

5. A day order expires at the end of the day.

6. A good-till-canceled (GTC)or open order remains in effect until


it is either filled or canceled. These orders must be renewed at
least twice a year - no later than the end of April and end of
October.
Not all exchanges accept all these types of orders. Furthermore,
option exchanges such as the CBOE or the Amex accept straddle
and spread orders, so that puts and calls do not have to be ordered
separately.
Four Types of Discretionary Order Execution Qualifiers
There are also four discretionary order execution qualifiers:
1. All-or-none orders are market or limit orders that must be
executed in their entirety or not at all.

2. Fill-or-kill orders must be executed immediately and in their


entirety or else the order is cancelled.

3. Immediate-or-cancel (IOC) orders are market or limit orders


that are to be executed immediately in whole or in part, and

any portion that cannot be executed as soon as the order hits


the trading floor is cancelled.

4. Not-held (NH) orders are market or limit orders in which the


customer gives the trader or floor broker time and price
discretion; this qualifier, often invoked for trading in overseas
markets when exchange hours are past your client's bedtime,
does not hold the broker responsible for missing the best price

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