securities. The Nasdaq system provides online computer quotes offered by dealers in the stock. When an individual wishes to pur- chase or sell a share, the broker can search the listing of offered bid and asked prices, contact the dealer who has the best quote, and execute the trade. 5. Block transactions account for about half of trading volume. These trades often are too large to be handled readily by specialists, and thus block houses have developed that specialize in these transactions, identifying potential trading partners for their clients. 6. Buying on margin means borrowing money from a broker in order to buy more securi- ties. By buying securities on margin, an investor magnifies both the upside potential and the downside risk. If the equity in a margin account falls below the required main- tenance level, the investor will get a margin call from the broker. 7. Short selling is the practice of selling securities that the seller does not own. The short seller borrows the securities sold through a broker and may be required to cover the short position at any time on demand. The cash proceeds of a short sale are kept in escrow by the broker, and the broker usually requires that the short seller deposit addi- tional cash or securities to serve as margin (collateral) for the short sale. 8. Securities trading is regulated by the Securities and Exchange Commission, as well as by self-regulation of the exchanges. Many of the important regulations have to do with full disclosure of relevant information concerning the securities in question. Insider trading rules also prohibit traders from attempting to profit from inside information. 9. In addition to providing the basic services of executing buy and sell orders, holding se- curities for safekeeping, making margin loans, and facilitating short sales, full-service brokers offer investors information, advice, and even investment decisions. Discount brokers offer only the basic brokerage services but usually charge less. 10. Total trading costs consist of commissions, the dealers bid-asked spread, and price concessions.   KEY TERMS primary market secondary market initial public offerings underwriters prospectus private placement stock exchanges over-the-counter market Nasdaq bid price asked price third market fourth market electronic communication network specialist block transactions program trades bid-asked spread margin short sale inside information       WEBSITES http://www.nasdaq.com www.nyse.com http://www.amex.com   The above sites contain information of listing requirements for each of the markets. The sites also provide substantial data for equities.