Instead of charging a fixed transaction fee for clearing the rights, Corbis tries to buy low and sell high, capturing the spread as revenue.
But this is now drying up, because new rules imposed by the Securities and Exchange Commission have shrunk the profits that market makers earn on the spread between buy and sell prices.
Like all brokerage fees, the APT tax establishes a spread between the buy and sell price of every transaction.
If the company bought back enough shares to make a difference, the school trust would be able to spread its risk without having to sell its entire stake in the company.
The execution of this trade would involve the purchase of the March 32 call and sell of March 33 call (buying a vertical spread) while simultaneously selling the March 33 call and purchasing the March 34 call ( selling a vertical spread) However, you put it in as one trade (a call butterfly) and then you can fill as one price on the whole trade.
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Citron and Levine also noted that marketmakers were failing to match buy and sell orders that didn't give them their accustomed spread.
Thinking about the mechanics of selling a put spread, you would buy the nearer term and sell the farther term options.
If you exercise an ISO and sell the shares right away, life is simple: The spread between what you paid for the stock and what you realized is taxed as pay, at federal income tax rates of up to 35%.
The best way to protect yourself is to use limit orders when placing an order to buy or sell a stock or an exchange-traded fund. (See How Your Buy and Sell Orders Get Filled for more.) Look at the bid-ask spread and set your price limit at the bid for selling a stock and at the ask for buying a stock.
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If the stock market goes down--thus expanding the spread-- the private equity firm can mark up its companies and sell them to other companies.
In order to have a corresponding ounce-to-ounce spread trade in the futures market, a trader who is looking for the spread to narrow would buy two 50-ounce platinum futures contracts and simultaneously sell one 100-ounce gold futures contract.
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The marketmakers rarely allowed customers to trade inside the spread, even if one customer was willing to pay the same price that another customer wanted to sell his stock for.
That spread the word far enough for the 2002 book, published by the Zondervan unit of HarperCollins, to sell 25 million copies through mostly conventional channels.
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