When a broker-dealer sells you securities out of its inventory, the broker-dealer acts as a principal in the transaction (that is, selling to you directly the securities it holds). When acting in a principal capacity the broker-dealer generally will be compensated by selling the security to you at a price that is higher than the market price (the difference is called a markup), or by buying the security from you at a price that is lower than the market price (the difference is called a markdown).
Director’s Take: Investing Is A Lot Like Football
It’s a good time to talk about how investing is a lot like football – both need a strong playbook to be successful.
Self-Directed IRAs and the Risk of Fraud
Read our latest Investor Alert to learn about potential risks associated with self-directed Individual Retirement Accounts.
Would You Invest in HoweyTrade?
Does it look more like a legitimate investment opportunity or an investment scam? What red flags can you spot, if any?