What Is a Commodity Pool Operator (CPO)? A commodity pool operator (CPO) is a money manager or investment fund (called a commodity pool) that oversees investments made in commodities securities such as futures and options contracts, or foreign exchange (forex) contracts. The commodity pool operator may also make trading decisions

What Is Short Interest? Short interest is the number of shares that have been sold short but have not yet been covered or closed out. Short interest, which can be expressed as a number or percentage, is an indicator of market sentiment. Extremely high short interest shows investors are very pessimistic

What Is Small Cap? The term small-cap describes companies with a relatively small market capitalization. A company’s market capitalization is the market value of its outstanding shares. The definition for small-cap varies, but generally means a company with $300 million to $2 billion in market capitalization. Understanding Small Cap The “cap” in small-cap

What Is After-Hours Trading? After-hours trading starts at 4 p.m. U.S. Eastern Time after the major U.S. stock exchanges close. The after-hours trading session can run as late as 8 p.m., though volume typically thins out much earlier in the session. Trading in the after-hours is conducted through electronic communication

When interest rates increase too quickly, it can cause a chain reaction that affects the domestic economy as well as the global economy. It can create a recession in some cases. If this happens, the government can backtrack the increase, but it can take some time for the economy to

What Is Dilution? Dilution occurs when a company issues new shares that result in a decrease in existing stockholders’ ownership percentage of that company. Stock dilution can also occur when holders of stock options, such as company employees, or holders of other optionable securities exercise their options. When the number

What Is Insider Trading? Insider trading involves trading in a public company’s stock by someone who has non-public, material information about that stock for any reason. Insider trading can be either illegal or legal depending on when the insider makes the trade. Insider trading is illegal when the material information

To calculate the gains or losses on a stock investment, one must first know the cost basis, which is the purchase price initially paid for the stock. Investors who neglected to record this information may find it on the order execution confirmation form or the brokerage account statement from the

The term float refers to the regular shares a company has issued to the public that are available for investors to trade. This figure is derived by taking a company’s outstanding shares and subtracting any restricted stock, which is stock that is under some sort of sales restriction. Restricted stock

The distinction between stocks and shares in the financial markets is blurry. Generally, in American English, both words are used interchangeably to refer to financial equities, specifically, securities that denote ownership in a public company. Nowadays, the difference between the two words has more to do with syntax and is