key concepts

Brokerage account: prefunded arrangement that allows you to buy/sell investment assets
- Full-service brokerage firms: provide professional guidance
  - Stockbrokers: aka investment representatives, registered representatives, account managers
- Self-directed brokerage account: make own investment decisions
Cash account: pay in advance for all securities purchased
Margin account: can buy stocks, bonds, and assets with borrowed money
Securities Investor Protection Corporation (SPIC) insurance: covers up to $500, 000 p erc u s t o m er, p er f i r m, w i t h$ 250,000 limit for cash
- Covers brokerage firm going out of business or experiencing theft
- Does not cover market losses
Orders
- Market order: buy/sell at current ask/bid price
- Limit order: buy/sell at specific price or better
  - Important if trading stock with little buyers/sellers or with large daily price swings
- Stop order (aka stop-loss order): only buy/sell if price falls below set point

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