Trading limits are designed to protect investors from wild price fluctuations and the potential for major losses. They're comparable to the circuit breakers established by stock exchanges to suspend trading when prices fall by a specific percentage.

The risk is that a day trader can lose money as well as make it, since no one can predict how or when prices will change. That risk is compounded by the fact that technology does not always keep pace with investors' orders, so a trader might authorize a sell at one price but have to wait for the order to be executed as the price drops even further. In addition, the trader pays transaction costs on each buy and sell order. Gains must offset those costs if the trader is going to come out ahead.

Some retirement plans, including Social Security, also provide a one-time payment to your beneficiary at the time of your death.

A debit card differs from a credit card, since it allows you to take money out of your bank account electronically, either as cash or as an on-the-spot payment to a merchant, rather than borrowing the money from the card issuer.

Average ratios vary significantly from one industry to another, so what is high for one company may be normal for another company in a different industry. From an investor's perspective, the higher the ratio, the greater the risk you take in investing in the company. But your potential return may be greater as well if the company uses the debt to expand to its sales and earnings.

The switch to decimal trading, which was completed in 2001, was the final stage of a conversion from trading in eighths, or increments of 12.5 cents. Trading in eighths originated in the 16th century, when North American settlers cut European coins into eight pieces to use as currency. In an intermediary phase during the 1990s, trading was handled in sixteenths, or increments of 6.25 cents.

Deep discount bonds are different from original issue discount bonds, which are sold at less than par value and accumulate interest until maturity, when they can be redeemed for par value. Zero coupon bonds are an example of original issue discount bonds.

Similarly, if you fail to pay principal and interest that you owe on a loan, you are in default. The lender may attempt to recover the loss by claiming any property of yours that was offered as collateral, or security for the loan, or by taking other legal measures.

One advantage of defined contribution plans is that you often have some control over how your retirement dollars are invested. You choice may include stock or bond mutual funds, annuities, guaranteed investment contracts (GICs), company stock, cash equivalents, or a combination of these choices.

An added benefit is that, if you switch jobs, you can often take your accumulated retirement assets with you. The downside is that there is no guarantee of the amount of retirement income you'll have available. The terms 401(k), 403(b), and 457 refer to the sections of the Internal Revenue Code where the plans are described.

If you're the seller, you turn over the security by the delivery date. But, in fact, most deliveries are electronic, since an increasing number of securities are registered in street name and held by your broker. and if you're the buyer, you pay the purchase price either through a margin account or by ensuring there is enough cash in your brokerage account to cover the transaction. You may send a check, arrange an electronic transfer, or ask your broker to sell investments you already own.

With a call option, an increase in the price of an underlying investment typically results in an increase in the price of the option. With a put option, however, an increase in the option's price is usually triggered by a decrease in the price of the underlying investment, since investors buy put options expecting stock prices to fall.

Certain investors, called hedgers, are interested in the underlying investment. For example, a baking company might buy wheat futures to help estimate the cost of producing its bread in the months to come. Other investors, called speculators, are concerned with the profit to be made by buying and selling the contract at the most opportune time. Derivatives are traded on exchanges, over the counter (OTC), and in private transactions.

When a nation devalues its currency, the goods it imports, and the overseas debts it must repay, become more expensive. But its exports become less expensive for overseas buyers. These competitive prices often stimulate higher sales and help to reduce the deficit.

Part of the appeal of DIAMOND shares, like the appeal of Standard & Poor's Depositary Receipts (SPDRs) and other ETFs, is that the trust mirrors the performance of its benchmark index for dramatically less than the cost of buying shares in all 30 stocks in the DJIA. A DIAMOND share trades at about 1/100 the value of the DJIA. So, for example, if the DJIA is at 10,600, shares in the trust will be priced around $106.

If two companies merge, or a company buys one or more other companies, earnings may be diluted if they don't increase proportionately with the total combined number of shares in the newly created company.

Further, dilution can occur if outstanding warrants and stock options on an individual stock are exercised, and if convertible bonds and preferred stock the company has issued are converted to common stock. Companies must report the worst-case potential for such dilution, or loss of value, to their shareholders as diluted earnings per share.

For example, government regulatory agencies like the Securities and Exchange Commission (SEC) and self-regulating organizations like the National Association of Securities Dealers (NASD) require publicly traded corporations to provide all the information they have available that might influence your decision to invest in the stocks or bonds they issue. Mutual fund companies are required to disclose the risks associated with buying shares in the fund. Similarly, federal and local governments require lenders to explain the costs of credit, and banks to explain the costs of opening and maintaining an account.

Despite the consumer benefits, disclosure information isn't always accessible, because it is either expressed in confusing language, printed in tiny type, or so extensive that consumers choose to skip over it.

However, because of the extensive information and online account access that's available on most brokerage websites, the traditional differences between full-service and discount firms are less apparent to the average investor.

A well-diversified stock portfolio, for example, might include small-cap, medium-cap, and large-cap domestic stocks, stocks in six or more sectors or industries, and international stocks.

Studies indicate that diversification can help insulate your investments against market and management risks without sacrificing the level of return you want. Finding the diversification mix that's right for you depends on your age, your assets, your tolerance for risk, and your investment goals.

Dividend yield, which increases as the price per share drops and drops as the share price increases, does not tell you what you're earning based on your original investment or the income you can expect to earn in the future. However, some investors seeking current income or following a particular investment strategy look for high-yielding stocks.

According to this theory, the dogs will, over the year, produce a total return that's higher than the return on the DJIA as a whole. The hypothesis is that when investors buy stock for its high yield, demand for that stock increases, so the price tends to rise. When the year is up, and the stock is no longer a dog because its higher price reduces its current yield even if the dividend remains the same. So you sell it. When you do, you'll get a higher price than you paid, plus the dividends you collected, producing a strong total return.

The advantage of this type of formula investing is that, over time, the average price you pay per share is lower than the actual average price per share. But to get the most from this approach, you have to invest regularly, including during prolonged downturns when the prices of the investment drop. Otherwise you are buying only at the higher prices.

Despite its advantages, dollar cost averaging does not guarantee a profit and doesn't protect you from losses in a falling market

About half the stocks included in the Standard & Poor's 500-stock Index (S&P 500), on which the Domini Index is modeled, make the cut, including giants like Microsoft and Coca-Cola. The other stocks are selected based on the industries they represent and their reputations for socially conscious business practices. The index is considered a benchmark for measuring the effect that selecting socially responsible stocks, sometimes described as social screening, has on a financial portfolio's performance.

Market capitalization weighting means that those companies with higher market capitalizations, figured by multiplying the current price per share by the number of existing shares, have a greater impact on the index than stocks with smaller capitalizations.

Global market performance is also tracked in eight geographically defined regional indexes and in the Dow Jones World Stock Index, a composite of the global indexes.

Quoted in points, not dollars, the DJIA is computed by totaling the weighted prices of the 30 stocks and dividing by a number that is regularly adjusted for stock splits, spin-offs, and other changes in the stocks being tracked. The companies that make up the DJIA are changed from time to time. For example, in 1999 Microsoft, Intel, SBC Communications, and Home Depot were added and four other companies were dropped. The changes were widely interpreted as a reflection of the emerging or declining impact of a specific company or type of company on the economy as a whole.

A double-action auction the system in place on US stock exchanges features many buyers and sellers bidding against each other to close a sale at a mutually agreed-upon price. The only securities auctions in US markets that are conducted as Dutch auctions are the competitive bids for US Treasury bills and notes.