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Meaning / Definition of

FTSE

Categories: Business and Management, Global, Stocks,

An abbreviation of the financial times stock exchange (Index), commonly referred to verbally as 'footsie'. There are various FTSE indices (indexes), including most notably the FTSE 100, which is the index of the top 100 shares on the london stock exchange, whose movement is regarded as an important indicator of national (and wider) economic health and buoyancy. The FTSE 100 represents about 80% of the market capitalization of all shares listed on the london stock exchange, which is interesting considering over 3,000 companies are listed in total. For Pareto enthusiasts (the '80-20 Rule') that's 3.3% of listed companies, accounting for 80% of total market value of companies listed on the london stock exchange, which is even by Pareto standards an extreme ratio of concentration. When economic commentators say the "...the footsie is up/down (a number of points)..." this is a reference to the relative movement of share prices among the companies listed in (usually) the FTSE 100. The 'footsie' is owned and operated by FTSE Group, which is basically a provider of economic information and data services, especially about stock and commodity exchanges. FTSE Group was until 2012 50% owned by Pearson Group (owners of the financial times newspaper group) and 50% by the london stock exchange, the latter buying full ownership from Pearson in 2012. It is not likely that the 'financial times' origins of the FTSE abbreviation will be strongly acknowledged in future, given its change of ownership.

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Definition / Meaning of

Stop Order

Categories: Investing and Trading, Brokerages,

You can issue a stop order, which instructs your broker to buy or sell a security once it trades at a certain price, called the stop price. Stop orders are entered below the current price if you are selling and above the current price if you are buying. Once the stop price is reached, your order becomes a market order and is executed.For example, if you owned a stock currently trading at $35 a share that you feared might drop in price, you could issue a stop order to sell if the price dropped to $30 a share to protect yourself against a larger loss. The risk is that if the price drops very quickly, and other orders have been placed before yours, the stock could actually end up selling for less than $30. You can give a stop order as a day order or as a good 'til canceled (GTC) order. You might use a buy stop order if you have sold stock short anticipating a downward movement of market price of the security. If, instead, the price rises to the stop price, the order will be executed, limiting your loss. However, there is a risk with this type of order if the market price of the stock rises very rapidly. Other orders entered ahead of yours will be executed first, and you might buy at a price considerably higher than the stop limit, increasing your loss.

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