CONTENTS
Introduction = xv
Chapter 1 The Stock Market : What the Stock Market Has to Offer = 1
Why Stocks Are Offered = 1
The Size of the Stock Market = 2
A Word About Bonds = 3
Why Individuals and Institutions Buy Stocks = 3
Dividends = 4
Capital Gains, or Growth = 5
Short Selling = 6
Risks and Rewards of Investing = 8
Common Stocks = 10
Preferred Stocks = 12
Stock Rights = 17
Stock Warrants = 18
Summary = 18
Chapter 2 Reading the Financial Press : Determining Share Value, Determining Your Investment Return = 20
Cash Accounts = 20
Margin Accounts = 21
Security Positions : Long, Short, Flat = 23
Pricing Stocks : Points and Fractions = 25
The Figuration of Current Yield = 27
Newspaper Listings = 28
Chapter 3 The Initial Public Offering : Getting the Stocks to the Marketplace = 32
The Primary Market - How Business Are Capitalized = 34
Incorporating the Business = 35
The Initial Public Offering(IPO) = 40
After the Offering Is Completed = 54
Chapter 4 Inside the Brokerage Firm : Who Does What? = 55
Full Service Versus Discount = 57
Selecting a Brokerage Firm and an Account Executive = 62
The Sales Assistant = 66
Chapter 5 The Secondary Market : Executing Orders on the Exchange Floor = 68
The New York Stock Exchange = 68
Listing Requirements and Criteria of the NYSE = 69
NYSE Maintenance Listing Requirements／Delisting from NYSE = 71
The NYSE Floor = 72
The Delivery of Orders to the NYSE : Superdot and the Broker Booth Support System = 78
NYSE's Online Comparison System = 80
The Auction System = 80
How Orders Are Executed in the Crowd = 83
Crossing Stock = 88
After (Off) Hours Trading - A／K／A Crossing Sessions = 89
The Short Sale = 91
Institutional Trades = 93
Decimalization = 95
Other Important Features of the NYSE = 95
AMEX - The American Stock Exchange = 101
Chapter 6 The Specialist : Riding the Bulls and Bears = 105
The Specialist's Role : As Dealer, as Broker = 106
The Role of Automation and Telecommunication = 110
Other Duties of the Specialist = 112
Odd-Lot Trading = 116
Assigning Securities to the Specialist = 120
Conclusion = 121
Chapter 7 The Secondary Market : Over-the-Counter Trading = 122
Following an Order Being Executed OTC = 126
The Over-the-Counter Bulletin Board : OTCBB = 130
Types of Orders = 133
Compliance Regulations of the NASD = 135
NASD Rules of Fair Practice = 137
Chapter 8 The Nasdaq : Ongoing Changes = 140
NASD : National Association of Securities Dealers, Inc. = 140
Requirements for Securities to Become Listed on Nasdaq = 142
November 1998 Merger with the American Stock Exchange = 146
Nasdaq-100 Index Tracking Stock(AMEX Symbol QQQ) = 147
The Major Nasdaq Stock Market Indexes = 147
Expansion of Nasdaq Worldwide : Globalization of Stock Trading = 149
Monitoring the Markets = 150
Other Major Developments with the Nasdaq = 151
Conclusion = 158
Chapter 9 Investment Companies : Closed-End and Open-End Funds - The "Package Plan" Approach = 159
Investment Companies = 160
Management Companies : Closed-End and Open-End Funds = 162
Pricing a Closed-End Fund = 163
Pricing an Open-End Fund = 163
Variety of Types of Open-End (Mutual) Funds for Bonds = 168
Conclusion = 169
Chapter 10 Stock Options : Multipurpose Instruments = 170
The OCC and the Exchanges That Offer Option Trading = 171
Options : A Definition and Explanation of How Stock Option Contracts Generally Function = 172
Types of Option Contracts : Puts and Calls = 176
Option Premium : The Price of the Option Contract = 182
Options as a Hedging Tool = 190
Miscellaneous Option Topics = 192
Conclusion = 193
Chapter 11 The Back Offices : Following the Long Paper Trail = 194
The Depository and Clearing House = 196
The Order Department = 198
P&S Department = 199
Margin Department = 206
Stock Record Department = 210
Accounting Department = 212
Dividend Department = 214
Proxy Department = 218
Chapter 12 Stock Market Theories : Can Prices Really Be Predicted? = 220
The First American Analyst = 222
The Analysts = 231
The Technical Approach = 241
Chapter 13 Analyzing Stocks : The Corporation's "Report Card" = 260
Current Assets and Current Liabilities = 261
Can the Corporation Pay Its Way? = 262
Using Debt and Capital Structure of a Corporation as Sources of Long-Term Funds = 263
The Income Statement = 264
Chapter 14 Online Trading in the Stock Market : How Technology Has Changed the Financial Landscape = 269
Brokerage Firms in the World of Online Trading = 270
How an Investor Establishes Online Trading = 273
Wireless and Touch Tone Trading = 274
The Risks of Online Trading = 275
Protection for Online Investors = 279
Conclusion = 281
Chapter 15 Globalization of the Stock Market : Expanding Opportunities for Investors = 282
Stock Markets Around the World = 283
Global Investing = 286
Effect of Extended／After-Hours Trading on Globalization = 287
Globalization : The Stock Exchanges = 288
Brokerage Firms and Online Access = 292
Conclusion = 293
Chapter 16 Taxation : How Dividends and Capital Gains Are Taxed = 294
The Taxation of Interest = 295
The Taxation of Dividends = 295
The Taxation of Capital Gains = 296
Multiple Positions = 297
Stock Gifts to Minors = 298
Stocks Received as Gifts and Inheritances : Taxable Amounts and Basis = 298
Chapter 17 In the Tank or, Even Worse, Crash, but Then a Reversal : How the Stock Market Works Under Pressure = 303
The Fair and Orderly Market = 306
Program Trading Myths = 313
The Global Crash = 314
The Stock Market and the Economy = 317
Conclusion = 319
Glossary = 320
Index = 399
About the Author = 423
