I recall being a stockbroker trainee who was confronted with new concepts and terminology. Then, most of the customers purchased individual stocks some bought bonds and a few purchased mutual funds. The types of orders a customer would give were linked to both his position in the stock market and the customer’s trading strategy and/or methodology. To the novice, these orders that sound simple can become complex and confusing when price and time qualifiers are added.

Market Order
A person wanting to buy or sell a specified number of shares of a specific stock immediately regardless of price would simply enter a market order. Read more »

Frequently in a hearing a witness when testifying about a managed account will refer to the cost in “bips.”  The statement might be “the management fee was 75 bips.”  A “bip” is securities industry trade jargon for a basis point.  A basis point is 1/100^th of a percent.  So, a fee of 75 basis points would be ¾ of one percent.

Portfolio management fees are expressed on an annual basis.  So, a $100,000 portfolio with a management fee of 75 basis points would cost the investor $750.00 annually.  Read more »