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FAQ


General FAQ
What is a short sale? Can you give me an example?
What does "cover" mean in relation to a short sale?
What does "or better" mean when you give instructions to buy or sell a stock?
What does a "protective stop" mean?
What is leverage?
What is the difference between debt and equity financing?
What is Hacker Safe?
Are all option contracts based on 100 shares?
What are futures contracts?
What is a derivative security?
What exactly are derivatives?
What is the difference between a Treasury Bill, a Treasury Note, and a Treasury Bond?
Treasury-only funds invest in derivatives, right? That makes them risky.
Most of my retirement is in a Treasury-only money market fund and a "prime" or general purpose money market fund. Since these are not insured, are they absolutely safe?
My banker says a CD is better than a short-term Treasury security because it's insured. How do you respond to that?
Can U.S. government securities be used as a substitute for Treasury securities? What does it mean to be backed by the "full faith and credit of the U.S. government"?
My broker has assured me that my Treasuries, which are held in my broker's name, are safe, even if the firm should fail. That's because of SIPC insurance, which insures accounts up to $500,000, the SIPC is a branch of the government similar to the FDIC.
I've heard that the Federal Deposit Insurance Corporation (FDIC) only insures the bank holding company, and not individual depositors. Is that true?
Are zero-coupon bonds backed by the full faith and credit of the U.S. government?
My broker and my friends tell me the only stock market strategy that works is the long-term "buy-and-hold" approach. Do you agree?
My broker says that if I want safety, I should dump all stocks but the blue chips. Then he wants me to take the proceeds and buy more blue chips. What do you think?
What is the difference in risk between "street name" and "book entry" accounts at a brokerage firm?
Can you recommend a broker?
Why do you and your staff sign pledges NOT to buy the stocks or other investments you recommend in Safe Money Report and your other services? I don't think of this as insider trading. In fact, I think you ought to put your money where your mouth is.
I have a simple question: Exactly when is the next crash going to take place?
If people lose trillions of dollars in the stock and bond markets, who gained all that money? The government? Bond dealers and stockbrokers?
The P/E (price-to-earnings) ratio doesn't match other quotes that I've seen from other sources? Why the discrepancy?
Can you evaluate my portfolio and tell me which investments I should keep and which to sell?
When I buy an option, who do I buy it from?
What does it mean to exercise an option?
Since options depreciate in value over time, is it better to buy a nearby option or a longer dated option?
What events would cause options to make a big move?
What is the contract size of an equity option?
What are the types of orders used to trade options?
What is the "bid" and "ask"?
What is more accurate — the last sale or the closing price?
How many stock option exchanges are there in the United States?
What is an option's "open interest"?
What happens to my order after I enter it with my broker?
When a stock pays a dividend, who gets it?
Do dividends influence option prices?
When a stock splits, how are options on that stock affected?
What will happen to an option if the company spins off one of its divisions?
Can I trade options on an IPO?
What is a "triple-witching" day?
What is the VIX Index that I read about in various option articles?
What is an American-style option?