The American Stock Exchange, or AMEX, is the third largest stock exchange in America. Although the exchange specializes in exchange-traded funds and hybrid/structured securities, its liberal policies about company listings (when compared to Nasdaq and NYSE) have allowed it to house the trades of many.

A Brokerage is an agent who handles orders to buy and sell securities, commodities, or other property in exchange for a fee or commission.

The New York-based Depository Trust & Clearing Corporation (DTCC) is the world’s largest organization dedicated to the settling and completion of trades on the stock market.

The DTCC is user-owned and directed, and provides order to the market by way of greater efficiency, uniformity, and automation in an otherwise chaotic mass of transactions. Any entity dealing in the market will likely receive services from the DTCC, from clearance to settlement to information services. One subsidiary of DTCC, the DTC depository, provides custody and asset servicing for 2.8 million issues of securities from the U.S. and 100 other countries and territories. Valued at $36 trillion, this depository contains more value than any other depository in the world.

Prior to the forming of the DTCC in the early 1970s, brokers faced a crisis of paperwork and inefficiency due to increased involvement of the public in financial markets. It was this crisis that led to the corporation's creation.

A “float” can mean either the process of issuing or underwriting securities or the number of shares of a corporation available to the investing public.

A hedge fund is group of investors, frequently in a limited partnership, that employs high risk techniques in the hope of obtaining large profits. By hedging, or using a security to reduce the market risk of a current holding, the group expects that if the held security doesn't succeed, the hedged security will. Many hedge funds engage in short selling stocks.

An index fund is a mutual fund that seeks to reflect the performance of a given benchmark. If the index fund were to follow the S&P 500, it would buy and sell exactly as the S&P 500 would.

A Market Maker is a dealer who stands ready to buy or sell a specific security or securities at all times.

Nasdaq is an American stock market founded in 1971 by the National Association of Securities Dealers (NASD). The name of the market is an acronym for "National Association of Securities Dealers Automated Quotations system." It is owned and operated by The Nasdaq Stock Market, Inc., and is the largest electronic screen-based equity securities market in the United States. With about 3,200 companies, it lists more companies and averages more trades each day than any other U.S. market.

A wholly owned subsidiary of the DTCC, the National Securities Clearing Corporation provides centralized clearance, settlement and information services for a variety of all broker-to-broker trades in the U.S. It acts as the main provider of centralized information services and money settlement for a number of transactions including mutual funds and insurance and annuity transactions, as well as linking funds and insurance carriers with their broker/dealer, bank and financial planner distribution channels.

The NSCC operates a "stock borrow" program that focuses on closing incomplete transactions. When a seller fails to deliver stock to a buyer, the NSCC steps in with borrowed stock which it then delivers to the buyer, while still holding the seller in debt. While doing so may close the transaction, it actually results in the creation of more shares than are actually in existence. As a result, phantom traders can continue to increase the numbers of shares available of any particular stock, while causing the price to drop.

Naked short selling is a variation of short selling. It operates much like short selling, except the trader does not actually have the ability to cover his obligation if the transaction goes through. In doing so he does not legitimately borrow the stock he sells short, and also sells stock he does not own or control. Frequently, the naked short seller will make these sales multiple times.

The New York Stock Exchange, based in New York City, is the largest stock exchange in the world by dollar volume. As ranked by securities, it is the second-largest. In 2006, the combined capitalization of all New York Stock Exchange listed companies was $25.0 trillion.

Here, an auction environment on a trading floor is designed to produce the fairest price for both parties which differentiates it from fully electronic markets. Each listed stock trades on one specific location on the trading floor. Exchange members move to the appropriate post to purchase a stock on behalf of an investor. There, a specialist broker plays the role of auctioneer and brings buyers and sellers together by calling out prices.

Companies that fail to meet minimum standards on one of the broader exchanges are often listed on the "Pink Sheets." These companies are considered highly speculative, and have little to no regulatory or listing requirements. There are no minimum accounting standards, nor are these companies required to disclose information usually required on the larger markets. They frequently fall prey to naked short sellers.

The Price Earnings Ratio, or P/E ratio, is a popular way to compare stocks selling at various price levels. The P/E ratio is the price of a share of stock divided by earnings per share for a twelve-month period. For example, a stock selling for $40 per share and earning $5 per share is said to be selling at a price earning ratio of $8.

A “put and call” is the ratio of the trading volume of put options to call options. It is used to gauge investor sentiment. For example, a high volume of calls compared to puts indicates a bullish sentiment in the market.

Regulation SHO, or RegSHO, was designed by the Securities and Exchange Commission in order to establish uniform requirements for the exchange of stocks. By mandating that "a broker or dealer may not accept a short sale order" without having first borrowed or identified the stock being sold, it is geared toward preventing abusive naked short selling. By demanding closer scrutiny on such trades, RegSHO was intended to prevent people from selling stock they don't even have in their possession, as selling a stock you don't have would clearly result in an inability to deliver the stock. The term for such a problem is a "Failure to Deliver" (FTD).

If these FTDs stand for an extended period of time, they can have a negative effect on the entire market – not just the company whose shares are being sold. RegSHO seeks to curb the number of potential FTDs by limiting the time span during which the FTD exists. Broker-dealers are required by RegSHO to complete FTDs in "threshold securities" (see definition) when they have persisted for 13 consecutive settlement days.

The U.S. Securities and Exchange Commission is the government agency responsible for federal securities law enforcement and the regulation of the securities industry/stock market. The SEC was created by Congress through the Securities Exchange Act of 1934 following years of depression caused by the Great Crash of 1929.

The SEC was created to regulate the stock market and prevent corporate abuses by licensing and overseeing stock exchanges. The SEC is responsible for enforcing the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940 and, most recently, the Sarbanes-Oxley Act of 2002.

The most common route for the SEC to enforce these laws is to take civil enforcement actions against individuals and/or companies who provide false information, commit accounting fraud or engage in insider trading, among other things. The SEC does, however, also works with criminal law enforcement agencies to prosecute criminal violations.

The practice of selling borrowed securities in hopes that the price will decline. The seller will temporarily borrow stock and sell it, hoping that he can replace the borrowed stock with stock purchased at a lower price before the deal is closed. Once the deal is closed, the seller must provide actual stock to the buyer.

If a company's stock is going for $10 per share, a short seller would borrow 100 shares, and then immediately sell those shares for a total of $1000. Then, if the shares later falls to $7 per share, the short seller would then buy 100 shares back for $700, return the shares to their original owner, and make a $300 profit.

Of course, if the stock value goes up, then the short seller will lose money.

When someone is given “stock options,” they have the right to buy or sell a fixed amount of a given security at a specified price within a limited period. Individuals may both buy and sell these "options."

A trader is any individual who buys and sells stocks. A trader can also be an employee of a broker-dealer or financial institution who specializes in handling purchases and sales of securities for the firm or its clients.

The Threshold Securities List is a list of securities that have succumbed to an unusually high number of "Failures to Deliver" (FTDs) over five consecutive settlement days. More specifically, these stocks make the list if there are more than 10,000 shares suffering aggregate FTDs, or if the level of fails is equal to at least one-half of one percent of the issuer’s total shares outstanding, or if the security is included on a list published by a self-regulatory organization (SRO).

A security can get off the list if it does not exceed the specified level of fails for five consecutive settlement days.