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name: equities-trading-desk
description: "Equities trading knowledge for a professional trader's AI agent desk. Sessions, settlement, order types, shorting, halts, corporate actions and equity desk practice. Use when researching, checking, sizing or journaling equities work. Educational only: no advice, no return promises, no order placement."
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# Equities: professional trading knowledge for AI agents

## When to use this skill
Load this when helping a trader research, screen, check or journal stocks and ETFs, US-focused. Educational and analytical only.

## Core concepts
- **Sessions.** The US regular session runs 9:30 to 16:00 ET. Pre-market and after-hours sessions have thinner liquidity, wider spreads and often order-type restrictions, so check what's supported.
- **Settlement.** US stock trades settle T+1 (one business day) since May 28, 2024.
- **Order types.** Market orders prioritize execution over price; limit orders control price but may not fill; stop orders become market orders when triggered and can fill well beyond the stop in a gap.
- **Shorting.** Short sales generally need a borrow ("locate") under SEC Regulation SHO. Hard-to-borrow names carry fees and recall risk. Losses on a short are theoretically unlimited.
- **Volatility controls.** Limit Up–Limit Down (LULD) can pause trading in individual stocks; market-wide circuit breakers halt trading on S&P 500 declines of 7%, 13% and 20% (Level 3 halts for the rest of the day).
- **Pattern day trading.** FINRA rules have imposed minimum equity requirements on margin accounts flagged as pattern day traders (historically $25,000). These rules have been under review, so check current FINRA rules and your broker's policy.
- **Corporate actions.** Earnings, dividends (ex-dividend date), splits, spin-offs, offerings and index rebalances all move prices and change positions.

## Pro vocabulary
Float, short interest, days to cover, borrow fee, ADV (average daily volume), VWAP, spread, liquidity, gap, catalyst, guidance, consensus, beat/miss, multiple (P/E, EV/EBITDA), free cash flow, dilution, buyback, sector rotation, beta, factor exposure, relative strength.

## How a professional desk thinks
- Start from catalysts and liquidity, then valuation and positioning.
- Position size is driven by the distance to invalidation and the account's risk per trade, adjusted for liquidity (a small-cap position you can't exit quickly is riskier than it looks).
- Earnings are binary-like events: either size for the gap or don't hold through.
- Correlation and sector concentration matter more than the number of tickers.
- Primary sources (10-K, 10-Q, 8-K, transcripts) outrank commentary.

## Key risks and common mistakes
- Gaps through stops on news or earnings.
- Concentration in one theme across "different" tickers.
- Chasing low-float momentum names with wide spreads.
- Ignoring dilution (offerings, convertibles, stock compensation).
- Treating short interest as a squeeze signal without borrow and float context.
- Trading thin extended-hours sessions with market orders.

## Risk rules the agent applies
1. Check upcoming earnings, ex-dividend and other scheduled events against the planned holding period.
2. Flag positions above the operator's max sector or single-name concentration.
3. Compare position size to average daily volume; flag illiquidity.
4. For shorts, flag borrow availability, fees and unlimited-loss risk.
5. Cite primary filings for fundamental claims, with dates.

## What the agent must never do
- Never recommend buying, selling, shorting or holding a security.
- Never give price targets or predict earnings reactions.
- Never place or manage orders.
- Never present social-media sentiment as evidence of value.

## Sources to verify
- SEC EDGAR filings: https://www.sec.gov/edgar/search/
- SEC Investor.gov (T+1, order types, short sales): https://www.investor.gov
- FINRA rules and investor guidance (margin, day trading): https://www.finra.org
- NYSE and Nasdaq trader information on halts and LULD: https://www.nyse.com/markets/hours-calendars and https://www.nasdaqtrader.com


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Source: The Agentic Trader (https://theagentictrader.com/skills/equities). Last verified 2026-10-14. Educational only. Not financial advice.