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Meaning / Definition of

Brokerage Firm

Categories: Brokerages,

brokerage firms, also known as broker-dealers, are licensed by the securities and exchange commission (SEC) to buy and sell securities for clients and for their own accounts. When a brokerage firm sells securities it owns, it is said to be acting as a principal in that transaction.Firms frequently maintain research departments for their own and their clients' benefit. They may also provide a range of financial products and services, including financial planning, asset management, and educational programs.brokerage firms come in all sizes, from one- or two-person offices to huge firms with offices around the world. They are sometimes differentialed as full-service or discount firms, based on pricing structure and client relationships.Some brokerage firms exist entirely online, and nearly all firms offer you the option of placing orders electronically rather than over the telephone. In most cases, trading electronically is substantially less expensive than giving buy and sell orders by phone.

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Definition / Meaning of

Expiration Cycle

Categories: Finance,

The recurring cycle of expiry months for which options on a particular security can be available. Basic options are placed in one of three cycles; Cycle 1 (the January/April/July/October, or the first month of each quarter); Cycle 2 (the second month of each quarter); or Cycle 3 (the third month of each quarter).At any one time, a basic option has contracts with three expiration dates outstanding. For example, in mid-February, options trading on cycle 3 will have March, June and September expiries available. Late in March, after the March options expire, a December contract will be added, thus offering June, September and December expiries.Higher-volume equity options, index options, and LEAPS can trade on other cycles, such as Cycle 4, Cycle 5 or Cycle 6. Cycle 4, for example, offers options in the two nearest months plus two months from Cycle 3. For example, in mid-April, there would be April, May, June and September expires available. A month later, there would be May, June, September and December expiries available for trading.

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