Trading Mechanisms & Market Operations Flashcards
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Read the first 7 Trading Mechanisms & Market Operations flashcards as text
What is the name of the Saudi stock exchange where listed securities are traded?
Answer: Tadawul (Saudi Exchange)
Tadawul, officially known as the Saudi Exchange, is the principal stock exchange of Saudi Arabia and the venue for trading listed securities.
In the Saudi capital market, what does the term 'T+2' settlement cycle mean?
Answer: Settlement of securities occurs two business days after the trade date
T+2 means that the transfer of securities and cash between buyer and seller is completed two business days after the transaction date.
Which type of order instructs a broker to buy or sell a security immediately at the best available current price?
Answer: Market order
A market order is executed immediately at the prevailing best available price without specifying a price limit.
What is a 'limit order' in the context of securities trading?
Answer: An order to buy or sell at a specified price or better
A limit order sets the maximum price a buyer will pay or the minimum price a seller will accept, ensuring the trade occurs only at or better than that price.
During a trading halt called by the exchange, which of the following is TRUE?
Answer: All trading in the affected security is temporarily suspended
A trading halt suspends all buying and selling activity in the affected security until the exchange lifts the halt, typically to allow dissemination of material information.
What is the primary function of the Securities Depository Center (Edaa) in Saudi Arabia?
Answer: Maintaining the central registry of securities ownership and handling settlement
Edaa (Securities Depository Center) serves as the central securities depository, maintaining ownership records and facilitating the settlement and transfer of securities.
Which of the following best describes a 'short sale' in securities markets?
Answer: Selling borrowed securities with the intention of buying them back at a lower price
A short sale involves selling securities that the seller has borrowed, anticipating a price decline so they can repurchase at a lower price and return the borrowed shares.
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