market mechanics
Educational articles in this subcategory.
Dark Pools and Off-Exchange Trading Basics
**Opening** Dark pools and off-exchange trading are critical tools for institutional investors seeking to buy or sell large blocks of stock without r...
Role of FINRA and SEC in Market Oversight
Market oversight by FINRA and the SEC ensures fair trading, protects investors, and maintains market integrity. These organizations enforce rules that...
Glossary: Market Structure and Trading Terms
Market mechanics form the foundation of how investments are bought and sold. Whether you're placing your first trade or analyzing execution quality, k...
Payment for Order Flow and Regulatory Debates
Payment for order flow (PFOF) is a practice where broker-dealers receive compensation from market makers for directing customer trades to them instead...
How ETFs Are Created and Redeemed
Exchange-traded funds (ETFs) are among the most popular investment vehicles globally, but their unique structure requires a specialized mechanism to m...
How the NYSE and Nasdaq Differ
Investors need to understand how stock exchanges operate to make informed decisions. The New York Stock Exchange (NYSE) and Nasdaq represent two disti...
Primary vs. Secondary Market Workflows
Investors often conflate stock markets as a single entity, but they operate through two distinct workflows: primary and secondary markets. These syste...
Order Types Used by US Investors
When buying or selling stocks, bonds, or ETFs in U.S. markets, investors use specific order types to control how and when trades execute. These tools ...
Bid-Ask Spreads and Liquidity in US Equities
Every trade in US equities involves two prices: what buyers pay and sellers accept. The gap between these prices—the bid-ask spread—is a foundational ...
Short Selling Mechanics Under Reg SHO
Short selling allows investors to profit from declining stock prices but involves unique mechanics and risks regulated under Rule 10b-18 (Reg SHO). Un...
Options Assignment and Exercise Logistics
Options give investors flexibility, but the logistics of exercising or being assigned can create unexpected obligations. When an option holder decides...
Market Makers, Specialists, and Wholesalers
Market participants rely on invisible infrastructure to execute trades efficiently. Market makers, specialists, and wholesalers form this backbone, en...
After-Hours and Pre-Market Trading Considerations
Investors often assume stock markets operate only between 9:30 AM and 4:00 PM EST. However, extended trading hours allow participation before and afte...
Stock Lending and Borrow Programs
Stock lending and borrow programs are foundational to modern markets, enabling liquidity, short selling, and income generation for shareholders. These...
Clearing, Settlement, and the Role of DTCC
When you buy or sell a stock, the transaction isn’t complete the moment you click "submit." Behind the scenes, two critical processes—clearing and set...
How Corporate Actions Flow Through Brokerage Accounts
Corporate actions—events like dividends, stock splits, or mergers—directly impact brokerage accounts. Investors must grasp how these actions flow thro...
Understanding Prospectuses and Offering Documents
**Investors must read prospectuses and offering documents to understand what they’re buying. These legal filings reveal a company’s financial health, ...
Circuit Breakers and Trading Halts Explained
Markets are designed to absorb shocks, but extreme volatility can disrupt orderly trading. Circuit breakers and trading halts are safeguards that paus...
Understanding Margin Requirements Regulation T
Regulation T, enforced by the Federal Reserve's Board of Governors, sets the baseline rules for margin accounts in U.S. brokerage accounts. It require...
Technology Behind Modern Brokerage Platforms
Modern brokerage platforms rely on advanced technology to execute trades efficiently, but their inner workings remain opaque to many investors. These ...