History:
The Exchange traces its roots back to colonial times, when stock brokers created outdoor markets in
Market:
AMEX's core business has shifted over the years from stocks to options and Exchange-traded funds, although it continues to trade small to mid-size stocks. An effort in the mid-1990s to initiate an Emerging Company Marketplace ended in failure, as the reduced listing standards (beyond the existing lenient AMEX standards) caused penny stock promoters to move their scams to a national exchange. In the mid 1990s the exchange was dogged by allegations of trading scandals, which were highlighted by BusinessWeek in 1999.In 1998, the American Stock Exchange merged with the National Association of Securities Dealers (operators of NASDAQ) to create "The Nasdaq-Amex Market Group" where AMEX is an independent entity of the NASD parent company. After tension between the NASD and AMEX members, the latter group bought out the NASD and acquired control of the AMEX in 2004.
Out of the three major American stock exchanges, the AMEX is known to have the most liberal policies concerning company listing, as most of its companies are generally smaller compared to the NYSE and NASDAQ. The Amex also specialises in the trading of ETFs, and hybrid/structured securities. The majority of
In 2006, the AMEX attempted to popularize an American implementation of the Canadian income trust model. Listed Equity Income Hybrid Securities, (more commonly known as Income Deposit Securities) listed on the AMEX are B & G Foods Holding Corp. (BGF), Centerplate, Inc. (CVP), Coinmach Service Corp. (DRY), and Otelco Inc. (OTT). Recently Coinmach Service Corp, has been attempting to restructure itself away from being an income trust.
As of 31 December 2007, the AMEX had 592 listed companies with a combined market capitalization of $258 billion.
The AMEX also produces stock market indices; perhaps the most notable of these is an index of stocks of internet companies now known as the Inter@ctive Week Internet Index. Recently, the AMEX has also developed a unique set of indices known as Intellidexes, which attempt to gain alpha by creating indices weighted on fundamental factors. The AMEX Composite, a value-weighted index of all stocks listed on the exchange, established a record monthly close of 2,069.16 points on November 30, 2006.
Located near the
Hours:
The exchange's normal trading sessions are from 9:30am to 4:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance. listed ETFs are traded at the AMEX including the SPDR and most Powershares.
Monday, April 20, 2009
American Stock Exchange
American Stock Exchange
History:
The Exchange traces its roots back to colonial times, when stock brokers created outdoor markets in
Market:
AMEX's core business has shifted over the years from stocks to options and Exchange-traded funds, although it continues to trade small to mid-size stocks. An effort in the mid-1990s to initiate an Emerging Company Marketplace ended in failure, as the reduced listing standards (beyond the existing lenient AMEX standards) caused penny stock promoters to move their scams to a national exchange. In the mid 1990s the exchange was dogged by allegations of trading scandals, which were highlighted by BusinessWeek in 1999.In 1998, the American Stock Exchange merged with the National Association of Securities Dealers (operators of NASDAQ) to create "The Nasdaq-Amex Market Group" where AMEX is an independent entity of the NASD parent company. After tension between the NASD and AMEX members, the latter group bought out the NASD and acquired control of the AMEX in 2004.
Out of the three major American stock exchanges, the AMEX is known to have the most liberal policies concerning company listing, as most of its companies are generally smaller compared to the NYSE and NASDAQ. The Amex also specialises in the trading of ETFs, and hybrid/structured securities. The majority of
In 2006, the AMEX attempted to popularize an American implementation of the Canadian income trust model. Listed Equity Income Hybrid Securities, (more commonly known as Income Deposit Securities) listed on the AMEX are B & G Foods Holding Corp. (BGF), Centerplate, Inc. (CVP), Coinmach Service Corp. (DRY), and Otelco Inc. (OTT). Recently Coinmach Service Corp, has been attempting to restructure itself away from being an income trust.
As of 31 December 2007, the AMEX had 592 listed companies with a combined market capitalization of $258 billion.
The AMEX also produces stock market indices; perhaps the most notable of these is an index of stocks of internet companies now known as the Inter@ctive Week Internet Index. Recently, the AMEX has also developed a unique set of indices known as Intellidexes, which attempt to gain alpha by creating indices weighted on fundamental factors. The AMEX Composite, a value-weighted index of all stocks listed on the exchange, established a record monthly close of 2,069.16 points on November 30, 2006.
Located near the
Hours:
The exchange's normal trading sessions are from 9:30am to 4:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance. listed ETFs are traded at the AMEX including the SPDR and most Powershares.
Psychology of Trading ?
Trading Platforms
View real-time prices in 37 currency pairs and spot gold
Execute market orders with just one mouse click
Track P&L and open positions in real time
Perform technical analysis with our advanced charting tool
Choose from 8 available order types
Access a full suite of proprietary daily and weekly research reports
View up to the minute news headlines and market commentary
Psychology of Trading ?
Trading Platforms
View real-time prices in 37 currency pairs and spot gold
Execute market orders with just one mouse click
Track P&L and open positions in real time
Perform technical analysis with our advanced charting tool
Choose from 8 available order types
Access a full suite of proprietary daily and weekly research reports
View up to the minute news headlines and market commentary
Sunday, April 12, 2009
Forex Regulation
However, seeing as the internet is a vast informational space that is difficult to monitor and control, there will always be forex brokers and service providers who disregard forex regulations and get away with dealing in way contrary to the official policies of the regulatory bodies.
The following is a guide that you can refer to when checking up on a forex broker or service provider to make sure that they are indeed following official forex regulations.
The People in Charge of Forex Regulation
First things first - you must be familiar with the bodies administering the forex regulations we're about to discuss.
- The NFA – the National Futures Association. The NFA is a self-regulatory organization for the US futures industry. Its purpose is to safeguard market integrity and protect investors by implementing forex regulations. Membership in NFA is mandatory for any futures or forex broker operating in the US .It is an independent regulatory body with no ties to any specific marketplace.
- The CFTC – the Commodity Futures Trading Committee. Created by congress, the Commodity Futures Trading Commission (CFTC) was formed in 1974 as an independent agency with the mandate to issue forex regulations for financial markets in the United States. The CFTC's forex regulations assure the economic utility of the markets by encouraging their competitiveness and efficiency, and protecting market participants against and abusive forex trading practices.
- The FSA - The Financial Services Authority. This is a UK based independent body, given statutory powers by the Financial Services and Markets Act 2000. The FSA regulates the financial services industry in the UK, which is made possible by the FSA's regulation making, investigatory and enforcement powers. The FSA is obliged to have regard to the Principles of Good Regulation.
- Various National Authorities – each country has its own national body for regulating its financial service industry. These are the bodies that decide on forex regulations, you must therefore make sure that your forex broker is licensed in the country from which they operate. This ensures that they are obliged to operate in accordance to that country's forex trading regulations.
Forex Regulations for Forex service providers
- A forex broker/ dealer / service provider must be licensed in the country in which their operations are based. This is a very important forex regulation to look out for, since if the broker you are looking into isn't licensed, they are operating against the law.
- Being approved by the national regulatory institutions ensures that the broker must maintain strict quality control standards and that your business with the broker is safe, fair and honest.
- By regulation, licensed forex brokers are subject to periodical audits, reviews and evaluations which enforce their need to comply to industry standards.
- Forex brokers must maintain a sufficient amount of funds to meet their customers' needs. This forex regulation ensures that the forex broker is able to execute and complete forex contracts made with their clients.
- Forex brokers are in no way allowed to misrepresent their services or to solicit customers to trade forex without a fair representation of the risks involved. Be wary of brokers who promise profits in the forex market, since by forex regulation they are not in any position to do so. No broker can guarantee profits in the forex market.
- A Forex broker is obliged to honor each and every forex contract (position) opened by a client. Failure to complete the forex contract with a client will lead to the revoking of the broker's license.
Forex Regulation
However, seeing as the internet is a vast informational space that is difficult to monitor and control, there will always be forex brokers and service providers who disregard forex regulations and get away with dealing in way contrary to the official policies of the regulatory bodies.
The following is a guide that you can refer to when checking up on a forex broker or service provider to make sure that they are indeed following official forex regulations.
The People in Charge of Forex Regulation
First things first - you must be familiar with the bodies administering the forex regulations we're about to discuss.
- The NFA – the National Futures Association. The NFA is a self-regulatory organization for the US futures industry. Its purpose is to safeguard market integrity and protect investors by implementing forex regulations. Membership in NFA is mandatory for any futures or forex broker operating in the US .It is an independent regulatory body with no ties to any specific marketplace.
- The CFTC – the Commodity Futures Trading Committee. Created by congress, the Commodity Futures Trading Commission (CFTC) was formed in 1974 as an independent agency with the mandate to issue forex regulations for financial markets in the United States. The CFTC's forex regulations assure the economic utility of the markets by encouraging their competitiveness and efficiency, and protecting market participants against and abusive forex trading practices.
- The FSA - The Financial Services Authority. This is a UK based independent body, given statutory powers by the Financial Services and Markets Act 2000. The FSA regulates the financial services industry in the UK, which is made possible by the FSA's regulation making, investigatory and enforcement powers. The FSA is obliged to have regard to the Principles of Good Regulation.
- Various National Authorities – each country has its own national body for regulating its financial service industry. These are the bodies that decide on forex regulations, you must therefore make sure that your forex broker is licensed in the country from which they operate. This ensures that they are obliged to operate in accordance to that country's forex trading regulations.
Forex Regulations for Forex service providers
- A forex broker/ dealer / service provider must be licensed in the country in which their operations are based. This is a very important forex regulation to look out for, since if the broker you are looking into isn't licensed, they are operating against the law.
- Being approved by the national regulatory institutions ensures that the broker must maintain strict quality control standards and that your business with the broker is safe, fair and honest.
- By regulation, licensed forex brokers are subject to periodical audits, reviews and evaluations which enforce their need to comply to industry standards.
- Forex brokers must maintain a sufficient amount of funds to meet their customers' needs. This forex regulation ensures that the forex broker is able to execute and complete forex contracts made with their clients.
- Forex brokers are in no way allowed to misrepresent their services or to solicit customers to trade forex without a fair representation of the risks involved. Be wary of brokers who promise profits in the forex market, since by forex regulation they are not in any position to do so. No broker can guarantee profits in the forex market.
- A Forex broker is obliged to honor each and every forex contract (position) opened by a client. Failure to complete the forex contract with a client will lead to the revoking of the broker's license.
Forex Leverage Regulation
The retail forex market has long had significant leveraging allowances, but this has recently come under threat by FINRA, the largest independent securities regulator in the United States. Since the Internet retail forex boom, many forex brokers have been offering their clients anywhere from 50/1 to 400/1 leverage on their accounts. FINRA is claiming that the proposed change would serve to protect investors from excessive market risk.
This proposal, however, assumes that traders are not using leverage properly. Having leveraging capabilities isn't tantamount to over-leveraging one's positions, and this is what the FINRA proposal is failing to recognize; instead, leverage merely allows a trader to exercise exact risk management in relation to the size of their positions. For instance, if a trader wished to risk only 1% of their total capital per position, they would use leverage to determine the amount that they are willing to risk per pip, based on the size of thier stop loss. Having leveraging capabilities allows a trader to dynamically adjust the size of their stop, so as to accommodate the current volatility levels of the market, while still maintaining a fixed position risk, regardless of whether they are risking 10 pips or 1000 pips.
Conversely, not having such leverage available will likely negatively impact traders who are using appropriate risk management. Reducing the leverage means that you will have less available margin for active positions, even if you are risking the same amount in both scenarios. This means that such traders are more likely to experience a margin call, assuming a consistent position risk, if the leveraging allowances were to be reduced
The most unpalatable part is that FINRA not only wants to limit the leverage - they evidently intend to practically eliminate it. If FINRA simply wanted to bring forex leveraging limits to the levels of commodity futures it would be far more understandable. Under the proposal, however, forex brokers would only be able to offer leverage of 1.5:1. Anyone who trades the forex markets knows that this would effectively put an end to US-based retail forex trading, since very few people would be able to properly trade under such a mandate. US-based FCMs would go out of business, and US-based traders would invest their money with oversees brokers.
The FINRA proposal sadly appeals to the lowest common denominator: the people who over-leverage positions with inappropriate stop-losses. In doing so, they consequently hurt all of the traders who trade with appropriate risk management, and merely use leverage as a necessary and responsible tool.
For anyone that is worried about this, you can rest easy for the moment. As it thankfully turns out, FINRA does not have specific regulatory authority over the forex markets; that would increasingly be the domain of both the NFA and the CFTA, whose regulatory capacity is significantly expanding in forex. Further, it wouldn't be in the interests of the NFA and CFTA to support this proposal, not to mention the flagrant inconsistency it would create with currency futures: they have been working long and hard to exact more control over the domestic forex market. If it were to predominately move oversees, they would have lost the ability to effectively regulate such activities (not to mention the membership fee revenue that they would receive from Forex CTAs).
Forex Leverage Regulation
The retail forex market has long had significant leveraging allowances, but this has recently come under threat by FINRA, the largest independent securities regulator in the United States. Since the Internet retail forex boom, many forex brokers have been offering their clients anywhere from 50/1 to 400/1 leverage on their accounts. FINRA is claiming that the proposed change would serve to protect investors from excessive market risk.
This proposal, however, assumes that traders are not using leverage properly. Having leveraging capabilities isn't tantamount to over-leveraging one's positions, and this is what the FINRA proposal is failing to recognize; instead, leverage merely allows a trader to exercise exact risk management in relation to the size of their positions. For instance, if a trader wished to risk only 1% of their total capital per position, they would use leverage to determine the amount that they are willing to risk per pip, based on the size of thier stop loss. Having leveraging capabilities allows a trader to dynamically adjust the size of their stop, so as to accommodate the current volatility levels of the market, while still maintaining a fixed position risk, regardless of whether they are risking 10 pips or 1000 pips.
Conversely, not having such leverage available will likely negatively impact traders who are using appropriate risk management. Reducing the leverage means that you will have less available margin for active positions, even if you are risking the same amount in both scenarios. This means that such traders are more likely to experience a margin call, assuming a consistent position risk, if the leveraging allowances were to be reduced
The most unpalatable part is that FINRA not only wants to limit the leverage - they evidently intend to practically eliminate it. If FINRA simply wanted to bring forex leveraging limits to the levels of commodity futures it would be far more understandable. Under the proposal, however, forex brokers would only be able to offer leverage of 1.5:1. Anyone who trades the forex markets knows that this would effectively put an end to US-based retail forex trading, since very few people would be able to properly trade under such a mandate. US-based FCMs would go out of business, and US-based traders would invest their money with oversees brokers.
The FINRA proposal sadly appeals to the lowest common denominator: the people who over-leverage positions with inappropriate stop-losses. In doing so, they consequently hurt all of the traders who trade with appropriate risk management, and merely use leverage as a necessary and responsible tool.
For anyone that is worried about this, you can rest easy for the moment. As it thankfully turns out, FINRA does not have specific regulatory authority over the forex markets; that would increasingly be the domain of both the NFA and the CFTA, whose regulatory capacity is significantly expanding in forex. Further, it wouldn't be in the interests of the NFA and CFTA to support this proposal, not to mention the flagrant inconsistency it would create with currency futures: they have been working long and hard to exact more control over the domestic forex market. If it were to predominately move oversees, they would have lost the ability to effectively regulate such activities (not to mention the membership fee revenue that they would receive from Forex CTAs).
Forex Glossary
Ask (Offer) — price of the offer, the price you buy for.
Aussie — a Forex slang name for the Australian dollar.
Bid — price of the demand, the price you sell for.
Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.
Cable — a Forex traders slang word GBP/USD currency pair.
Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
Commission — broker commissions for operation handling.
CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.
ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
ECB (European Central Bank) — the main regulatory body of the European Union financial system.
Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
Flat (Square) — neutral state when all your positions are closed.
Fundamental Analysis — the analysis based only on news, economic indicators and global events.
GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.
GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
Hedging — maintaining a market position which secures the existing open positions in the opposite direction.
Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.
Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
Liquidity — the measure of markets which describes relationship between the trading volume and the price change.
Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.
Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.
Margin Account — account which is used to hold investor's deposited money for FOREX trading.
Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.
Market Order — order to buy or sell a lot for a current market price.
Market Price — the current price for which the currency is traded for on the market.
Momentum — the measure of the currency's ability to move in the given direction.
Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Offer (Ask) — price of the offer, the price you buy for.
Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.
Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).
Profit (Gain) — positive amount of money gained for closing the position.
Principal Value — the initial amount of money of the invested.
Realized Profit/Loss — gain/loss for already closed positions.
Resistance — price level for which the intensive selling can lead to price increasing (up-trend).
Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
Settled (Closed) Position — closed positions for which all needed transactions has been made.
Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
Spread — difference between ask and bid prices for a currency pair.
Stop-Limit Order — order to sell or buy a lot for a certain price or worse.
Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.
Support — price level for which intensive buying can lead to the price decreasing (down-trend).
Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.
Trend — direction of market which has been established with influence of different factors.
Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
Useable Margin — amount of money in the account that can be used for trading.
Used Margin — amount of money in the account already used to hold open positions open.
Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.
Forex Glossary
Ask (Offer) — price of the offer, the price you buy for.
Aussie — a Forex slang name for the Australian dollar.
Bid — price of the demand, the price you sell for.
Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.
Cable — a Forex traders slang word GBP/USD currency pair.
Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
Commission — broker commissions for operation handling.
CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.
ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
ECB (European Central Bank) — the main regulatory body of the European Union financial system.
Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
Flat (Square) — neutral state when all your positions are closed.
Fundamental Analysis — the analysis based only on news, economic indicators and global events.
GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.
GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
Hedging — maintaining a market position which secures the existing open positions in the opposite direction.
Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.
Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
Liquidity — the measure of markets which describes relationship between the trading volume and the price change.
Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.
Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.
Margin Account — account which is used to hold investor's deposited money for FOREX trading.
Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.
Market Order — order to buy or sell a lot for a current market price.
Market Price — the current price for which the currency is traded for on the market.
Momentum — the measure of the currency's ability to move in the given direction.
Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Offer (Ask) — price of the offer, the price you buy for.
Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.
Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).
Profit (Gain) — positive amount of money gained for closing the position.
Principal Value — the initial amount of money of the invested.
Realized Profit/Loss — gain/loss for already closed positions.
Resistance — price level for which the intensive selling can lead to price increasing (up-trend).
Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
Settled (Closed) Position — closed positions for which all needed transactions has been made.
Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
Spread — difference between ask and bid prices for a currency pair.
Stop-Limit Order — order to sell or buy a lot for a certain price or worse.
Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.
Support — price level for which intensive buying can lead to the price decreasing (down-trend).
Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.
Trend — direction of market which has been established with influence of different factors.
Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
Useable Margin — amount of money in the account that can be used for trading.
Used Margin — amount of money in the account already used to hold open positions open.
Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.
