Buy Break
Buy Break sounds like the old "You break it, you buy it" rule, but it actually refers to buying a share or asset at the breaking point.
Often, a stock will hover around a certain value, say, between $100 and $110. It might bounce between those for months, even years. That range is the zone of resistance. The share just can't quite make it over the hump. It might bump up to $110 periodically, but it just can't get the momentum to go past it, and ends up falling to $100 again.
The lower area of its average, $100 in this case, is the support level. That's the soft, cushy floor for the price to fall to, but not sustain any harm. Once the stock breaks over that $110 threshold though, it's breaking free to a new range. Once it gets to, for instance, $125, and it stays there a bit, investors then regard that $125 as the new support level, and anticipate it going up from there.
It's hard to spot a true breakout though. A false one is called a "fakeout." Think about the last time you heard of a big merger or new product. The announcement goes out Monday morning. By Monday afternoon, the stock is flying high. Tuesday morning it opens above the resistance level (in our example, above the $110). Wall Street goes nuts, thinking it's a breakout and buys, buys, buys. But...late Tuesday, the CEO of one of the companies merging is proven to be guilty of a super skeezy crime...and the stocks plummet, well below what was formerly the resistance range and the support level.
That's a fakeout. It started out looking like a great breakout, but then...bombed.
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Finance: What is an All or None Order?70 Views
finance a la shmoop what is an all-or-none order oh you'd think that
spoiled brats only live on playgrounds of participation trophy cities hmm but [Boys holding participation trophies]
that is oh so sadly not true they roam the wild hallways of Wall Street
investment firms in droves and all-or-none order means that a buyer or
seller of stock either wants all of their shares bought or sold or none of
them and yes this applies to bonds preferred stocks and other random [Man discussing stocks and bonds]
hybrids as well.....A buyer has a portfolio of 500 million dollars in small cap
growth stocks generally speaking she's told her clients that she won't take
less than a 2% position in anything because she wants to be able to focus on
a core group of stocks and really be on top of any big movements hoping to sell [Stocks in a sack land on a table]
the shares before well, any huge problems holding so in this case she's
found a company she loves an appropriately named coal company for [Woman looking through binoculars in her car]
spoiled investors called mine mine mine the only problem is that the stock is
thinly traded that is not a ton of shares trade every day and she needs to
own either ten million dollars worth of stock which would be a two percent
position or she doesn't want to own any the stock at the moment is trading at
ten dollars and seven cents a share and she wants it at ten bucks or better...
well at ten dollars and one penny she has no interest whatsoever in that stock [Stock graph for mine mine mine company]
at 10.00 she's a buyer so that is her limit order but on this all-or-none
order she waits and waits and waits knowing that sometimes all-or-none [Woman looking at laptop waiting for the stocks]
orders simply never get filled other times they get filled scarily too fast
like the seller knew something the buyer did not but along comes a bad market day
the White House says something stupid what are the odds? and the market tanks for
an hour and blam she is the proud new owner of a million shares of mine mine
mine good for her those shares are now all hers hers hers [Pigeon poops on mans head]
Up Next
What is a limit order, and how can we be sure we never have one of those in place when we go to a doughnut shop?