Ticker Tape Terms

You have probably seen the ticker tape moving at the bottom of the screen on your favorite news station and various other channels. It is this ticker tape that shows you the performance of certain stocks.

Basically, the ticker tape is used to relay financial information to investors anywhere in the world. The information that you will find on the ticker tape includes the stock symbol, the price, and the volume. These numbers continuously change.

There are a number of terms that you should be aware of so that you can totally utilize the ticker tape to your benefit when going through stock option ordering. Even if you are working in conjunction with a financial advisor, that doesn't mean that you don't have to pay attention to the ticker tape because anything can change at any time and that may signify it is time for you to make a move that could be profitable or one that could save your profits.

Broad Tape

Dow Jones News has created the Broad Tape to be placed on the screen within an investment firm's boardroom. This form of ticker tape keeps investors and brokers updated because of the continuous stream of financial and investment information that comes across it.

The broad tape, however, is not just found within boardrooms, but it is found on television and on the Internet. Individuals can also gain access by privately subscribing. Nevertheless, you will not find Broad Tape on the trading floor because it would be possible for traders to get news faster than the public and then the traders could react to that news rather than the public reacting to it. The public must be able to react first in order to make decisions that are right for them rather than the traders make influential decisions that could hurt a person's ability to choose. Plus, news does not always influence the outcome. Many times, it is just news, so one must identify what is influential and what isn't.

Fighting the Tape

You are fighting the tape if you make a trade that goes against what the ticker tape is saying. So if the market is failing and you still buy stocks, you are said to be fighting the tape. To many traders, they say that fighting the tape is an investment sin. Actually, some may more appropriately call it a "cardinal sin."

But when reading the tape, you are doing what is called "tape reading" and that is how you are going to evaluate stock size, orders, order speed, the condition of the order, the price, and other aspects that will help to execute a trade that will be profitable.

Painting the Tape

Painting the tape is something you should never have to worry about doing because this is a strategy that is used by market manipulators. These manipulators may buy and sell securities between themselves in an effort to manipulate stock performance. This improved performance can draw in other investors who see the stock growing. The truth, however, is that the activity is manipulative.

After the stock has moved, the manipulators will then work toward selling their investment for a profit. They drove up the price and now they want to sell so they can achieve a profit. Unfortunately, this is done under manipulative means.

There are a number of other ticker tape terms that you will learn along the way. Your certified financial advisor can help you understand how it is the ticker tape will make a difference in how you understand, follow, and manage your investments. That way you don't have to be sitting in your financial advisor's office to know what is going on.

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