Securities and Exchanges Overview

Securities

• Securities are investments used to grow money or earn income, including equities (stock ownership), debt (bonds), and hybrids (mix of both).
• Equity securities represent company ownership, potentially including dividends (company payments to shareholders).
• Debt securities involve lending money to a company or government, with interest payments.
• Hybrid securities combine characteristics of both equity and debt.
• Securities are traded in financial markets regulated by organizations like the SEC.
• Companies use securities to raise capital for projects or to pay debts.
• Investors can choose securities based on their risk tolerance and financial goals.

Exchanges

• Exchanges are marketplaces for buying and selling securities (like stocks).
• Stock exchanges connect buyers and sellers and determine prices based on supply and demand.
• Initial Public Offerings (IPOs) are when companies first sell their shares.
• Major exchanges include the NYSE and Nasdaq.
• Exchanges ensure fair transactions and prevent fraud through regulation by organizations like the SEC.

Candlesticks

• Candlestick charts represent stock price movements over time.
• Green candles indicate closing prices higher than opening prices (buyers were stronger).
• Red candles indicate closing prices lower than opening prices (sellers were stronger).
• Candlesticks have bodies (showing the opening and closing prices) and wicks (showing the high and low).
• Patterns like "hammer" and "pin" candlesticks can indicate potential trends or reversals in prices.
• These patterns help investors understand the market trends.

Selling Short

• Selling short involves betting against a stock's price, expecting it to go down.
• Investors borrow shares, sell them immediately, and buy them back later to profit if the price drops.
• Short selling can be profitable, but there is risk as prices could rise.

Exchange Traded Funds (ETFs)

• ETFs are investments that contain a collection of other investments.
• Investors can buy or sell ETFs on stock exchanges.
• ETFs often mirror specific indices or sectors to achieve particular investment goals.
• ETFs provide a way to invest in many investments at once, which can be used to reduce overall risk.

Call Options

• Call options give investors the right, but not the obligation, to buy a stock at a certain price (called the strike price) within a specific period.
• A call option's value is based on the underlying stock price.
• Investors can profit if the underlying stock price rises above the strike price, but they risk losing the premium paid for the option if the stock price doesn't rise.
• Options are contracts between two parties.

Volatility Index (VIX)

• The VIX is a measure of expected stock market volatility over the next 30 days.
• A higher VIX indicates greater expected price swings and increased market uncertainty.

Registered Accounts

• Registered accounts (e.g., RRSP, TFSA) offer tax advantages for saving to help with goals like retirement or education.
• Different accounts may have restricted uses or limitations.

Dividends and Dividend Aristocrats

• Dividends are payments companies make to shareholders.
• Dividend aristocrats are companies that consistently increase their dividends for a prolonged period.
• Investing in dividend stocks may be a way of receiving income passively from a company's revenue.

Blue-Chip Stocks

• Blue-chip stocks represent well-established, large companies with a history of profitability.
• They are generally considered stable investments.
• Blue-chip stocks are often included in major market indexes. They are useful in providing a form of stable growth.