First up is

Michael Lambert

, who writes, "I have a question regarding limit orders on securities that trade infrequently. Does a trade actually have to take place to trigger my limit order or does the quote just need to move through my limit price?" A limit order, like any other type of order, can only be filled if someone agrees to your price. So yes, a trade must occur.

Here's how it works. Imagine a stock with a bid (highest offer to buy) of 10 1/4 for 1,000 shares and an ask (lowest offer to sell) of 10 3/8 for 1,000 shares. A market order to sell 1,000 shares would "hit" that bid of 10 1/4, since it's the best deal around. Conversely, a market order to buy 1,000 shares would get filled at 10 3/8, the cheapest price on the market at the moment.

But you, you're too smart to use a market order. Or too stingy. Whatever -- the point is that, although you want 1,000 shares as much as the next guy, you're only willing to pay 10 3/16. So you put in a limit order of 10 3/16, which ensures that you won't pay any more than that price for those 1,000 shares.

Pretend you've had a limit order at that price in for some time now, sitting right behind the market bid of 10 1/4. And pretend that right behind you sits another bid, for 10 1/8, or 1/16 (a "teenie") lower than yours. If someone places a market order to buy 1,000 shares, it'll get filled at 10 1/4, the current best bid. Which makes your bid for 10 3/16 the new best game in town. The bid has "ticked down." (See

last week's primer on how this process works.)

Your limit would get filled if someone put in another market order for 1,000 shares. It would also have gotten filled if the previous market order was for 2,000 shares, forcing the bid to get filled in two stages as it ticks down. So the bid could never really, as you put it, "move through" your price. It'd stick on it. The danger is that an illiquid security may never tick through to your limit order, keeping you from trading.

Memo to

Joseph Young

, who wonders what fund managers mean when they say they're moving into cash: Don't worry, the people running your mutual fund aren't stuffing your nest egg in mattresses and fruit jars. "Cash" is used as an umbrella term referring to what the

Financial Accounting Standards Board

lumps together as "cash and cash equivalents." In addition to hard currency and demand deposits, this category includes highly liquid securities with maturity of under three months, like commercial paper, negotiable certificates of deposit and banker's acceptances.

These short-term investments have low rates of return, but they're also extremely safe places to park money. Hence, the strategy of "moving into cash" is particularly popular with technology and Internet fund managers trying to shield their portfolios from the extreme volatility in the sectors they track.

Memo to

Chris Kloczko

, who wonders why some splits are marked as "optionable": It's the stock itself, not the split, that's optionable. You're probably thinking of split calendars like the one

Yahoo! offers, which, alongside each stock's split date, list whether that stock has options that trade on one of the major exchanges.

Why would anyone care? It's commonly held, though seldom supported, that splits make stocks go up. The theory is that the reduced price of a split stock makes it more attractive to investors who previously couldn't afford it. Buying calls on a soon-to-split stock would let you cash in on this phenomenon -- if it ever materializes. Remember, splits don't change a company's fundamentals.

Memo to

Ed Connolly

, who wonders what it means to "short against the box": Shorting against the box simply means selling short a stock that you already own, a strategy designed to lock in capital gains while deferring the taxes. Think about it. How do you close out a position in a stock without actually selling it? You short the exact number of shares that you own. The position is effectively closed, since gains and losses from my short and long positions cancel each other out, regardless of whether the stock goes up or down. In the meantime, you defer the capital gains taxes from the sale of the stock until the next tax season. (Note that some tax-law changes from last year have restricted this practice.)

In one of the wonderful vagaries of investment terminology, the aforementioned "box" refers to the now-mythical place where stock is stored for safekeeping.

Memo: Have a dumb question relating to finance? Send it to

MonEmailbag@thestreet.com, and I'll do my best to answer. Include your full name, and please, no questions seeking personal financial advice or regarding personal brokerage disputes. And this reminder: Because of the volume of mail, personal replies can't be guaranteed.