Category: Stock Market (page 3 of 5)

July 9, 2019 / 0 Comments

10 Questions for your Financial Advisor

Planning for your retirement is essential to your future quality of life. Educating yourself now on long-term investments is a great start to creating a stable future for yourself and your loved-ones. When researching ways to plan for your financial future, it is likely that you have come across the terms “Financial Advisor,” or “Investment Advisor.” These are terms referencing the professionals that will guide you in your investments. So how do you find the right financial advisor for you? Start by asking these 10 questions to your potential financial advisors.

Key Points of this Article:

Do not settle. Research and investigate financial professionals to find the right fit for you, since you will be building a long-term relationship with them.
Recommendations and guidance are basic services that you should be seeking when hiring a financial advisor.
Every financial advisor has a different pay rate and method. Some charge by the hour, others charge an annual retainer, and some simply charge a fixed percentage.

To ensure the financial professional you choose will give you the services and advice that best suits your financial goals, you need to ask the right questions. This can be a lengthy process if you find you must interview several advisors to get the answers that you need, but your quality of life in the future will be worth the work.

What is your philosophy on investments?

Although this sounds like a complex question, your financial advisor should be able to deliver an answer that is thorough but put in simple enough terms for you to understand. Listen closely and make sure that part of their investment philosophy includes how you will reach your financial goals through the discipline of patience with investment strategies. Your advisor should also have the philosophy that it is part of their job to make you feel at ease when market fluctuations happen because they have educated you on tax laws.

Are you a Fiduciary?

The answer you should be hoping for when asking this question, is “Yes.” By definition, a fiduciary has a legal duty that obligates them to act in the best interests of the other party. This means that all the investments your advisor points you towards are primarily in your best interest, not theirs. In short, a fiduciary always puts your financial needs above their own.

How will you contact me about my investments?

Your financial advisor should be updating you on a quarterly basis about your investments along with your portfolio status. A good financial advisor will make sure you are informed of every transaction, purchase or sell that is made on your behalf, and they should inform you in a way that works best for you. These can be emails or statements mailed directly to you, in addition to the option of meeting in person or over the phone with them to discuss your concerns.

Are my investments and money held by your firm?

The answer to this question should be no. An ethical financial advisor should contract with a custodian (the custodian can be owned by the firm or be a third party) such as Charles Schwab or Ameritrade to hold your assets, collect interest and dividend payments or to make distributions.

If something happens to you, what happens to my investments?

There are several reasons that your financial advisor may no longer be able to serve you. They should be able to answer this question with ease, explaining in enough detail that you feel comfortable with the level of thought and planning they have put into the possibility of them not being able to work with you in the future.

How do you get paid?

Find out if your financial advisor requires payment by the hour, annually or by a percentage based on your assets. If you feel that their fees are higher than you expected, you should compare their services and prices with other advisors in their field. Sometimes a higher fee can be a good thing, meaning that their quality of service is better than most or, it could mean that they are guiding you into purchasing products with higher fees as is often the case with commission-based advisors.

What is your favorite part of your job?

This question may seem like fluff or small talk, but it can be an important marker in how hard your financial advisor will work for you. People who enjoy their profession and have a passion for the purpose of their job, tend to serve their clients better and for longer periods of time. Pay attention to not only what they are saying about their job, but about how they are saying it. Are they making eye contact and smiling when they tell you? Or do they seem frustrated, uninterested, or distracted?

Can you provide me with a complete list of your services?

A financial advisor should have a comprehensive list of all their services so you can choose the services you will require. An example of some of those services are helping you:

Pick the right investments for your goals.
Identify how much money you will need to retire.
Develop a strategy for how you will reach your goals.
Make plans for your personal long-term care.
Manage your current expenses.
Manage your retirement expenses.

What is your educational background?

Your financial advisor should have and an advance retirement-planning and advance financial education. There are verification sites like Designation Check to make sure your advisor is legit. Some certifications you should look out for are Retirement Income Certified Professional (RICP) and Certified Financial Planner (CFP).

Is there anything else I need to ask you?

This is a great question to end your interview with because it tells you a lot about the level of interest your financial advisor has in working with you. If there is something of importance that you did not mention in your previous questions, your advisor should be eager to discuss this with you.

The Take Away:

Being educated in the correct questions to ask a potential financial advisor is the first step towards an excellent quality of life in your golden years. If you have a partner you plan to retire with, make sure to involve them in the interview process as well. Both of you should feel confident in who you choose to trust with your long-term financial goals.

December 15, 2018 / 0 Comments

Are You Considering Investing In High Dividend Stocks?

If you’d like to invest your wealth in an asset class that grows over time while also producing income, then investing in high dividend stocks might be the right move. You might think that stock investing is a risky road and wild ride, and it can be if you get into the broader market. However, stocks that pay out dividends usually come from blue chip companies and other businesses who have grown very large and have the size and stability to pay their shareholders money year in and year out. This means you can maintain the value of your wealth and assets as the stocks typically hold or slowly grow their value, but you can also enjoy income from them while you own them, as the companies might issue dividends quarterly, every six months, or annually. Keep reading to learn a few things about investing into high dividend stocks.

How to Choose High Dividend Stocks

Always look for any resources you can find about potential investments, and these resources should be something other than what commission-motivated brokers give you. While most high dividend stocks come from established and mature companies, you want to look into their background and track record and be sure that they have a long running and consistent history of not just paying out dividends, but good ones.

Make sure that you think ahead and plan long term when you invest in this part of the stock market. Even if you get some good money from your dividends, don’t always count on it as your primary source of income unless you’ve got deep pockets and can live frugally. While holding stocks usually pays off in the long run, even the best of companies won’t offer the same dividend every time they pay out. You’ll get them, but they do vary.

Diversify Your Investments

While high dividend stocks are a great asset class to invest in if you’re nearing a savings goal or want income during retirement, it’s still not a great idea to put all your eggs into one basket. Make sure your entire portfolio is still diversified properly, since even high dividend stocks can have bad quarters or years. Consider other stocks and exchange traded funds.

For that matter, diversify properly even within high dividend stock investments. Never put all of your money into just one particular stock. If you do, it could rapidly decline at some point and reduce your assets in overall value. Try to get in with at least a dozen or so, and spread the money across different industries.

For that matter, consider just simplifying and diversifying your investment in high dividend stocks at the same time. There are ETFs and mutual funds both dedicated to generating dividends while maintaining asset value, and they can give you broad access to the sector while letting someone else handle the research and management of everything for you.

Stock investing, over time and with patience, can generate a lot of wealth. Shifting your stock holdings into high dividend stocks can make for a conservative counterweight in your portfolio to more risky growth stocks or provide you income from within your nest egg and investments. There’s a lot to learn and know about doing this, but hopefully this article has at least gotten you started in the right direction.

October 11, 2017 / 0 Comments

Recent Stock Market Trends to Pay Attention To

The stock market is constantly changing and shifting, and with this comes a lot of varying trends. If you are an experienced traders, you would have heard of the terms bull and bear. The terms are used to describe the general trend of the stock market, whether it is increasing or decreasing at any given time. If the market is described as bullish, is it increasing (getting better), but if it is bearish, it is decreasing (getting worse).

According the professionals, the market is currently in a bullish state and is increasing every day. However, although this is a general trend, there have been many individual trends in stocks that you should be paying attention to. In particular, it appears that online and tech companies are starting to see large increases in share prices. This article will look at some of the trends in 2017 and will focusing on the big elephant in the room – the consistent increase in prices.

A Bull Market

If you have been trading in the stock market, you may have noticed that the market has been in a bullish state for what feels like forever. The rise has been going on steadily since 2009 and has been interesting to say the least when you take a look at 2017. The market has been so good that ever small percentage drops have received horrifying reactions.

The most shocking thing about this bull market is related to how long it’s been going on. The rise in the market has been related to the Federal Reserve’s low interest rates and the increase in bond buying. The market rise is currently standing at the second longest since 1900. To put it into a different perspective, the S&P 500 has risen by around 267% since the trend began. Although there is not much change in the stock market for 2017 when you consider this rise, the steadiness of the market in 2017 has raised suspicion. a-bull-vs-bear

The Market is Surprisingly Steady

As well as being on a steady incline, in 2017 specifically, the market has been very steady. In fact, this year, the market has hit a new record, as stocks haven’t been this steady since 1965. Back then, investors like Warren Buffet were gaining control of Berkshire Hathaway and Martin Luther King Jr. was leading a march about civil rights.

Many professionals in the industry are saying that 2017 should be looked at with one eye turned to the past, and investors should take the opportunities available. It seems that large events such as Britain leaving the EU and the recent election have had the largest impact on the stock market so far. Anything else has had minimal effect.

Will it last?

So the real question that is on everyone’s minds is, “will this last?” Many people are suggesting that a downward turn is approaching, similar to what happened in the last recessions. In most cases, when the bull market finally ends, there will be a sharp downturn of around 20%, which will hurt a lot of traders and businesses. However, these trends needs to be watched closely and you need you take advantage of rising opportunities. The stocks are great at the moment and have been quoted as “magical”. Just keep an eye on the rise and make sure you don’t get stuck if the market takes a dive.

September 10, 2017 / 0 Comments

The History of the NASDAQ Stock Exchange

The NASDAQ is an American based stock market which is designed especially to enable various investors to purchase stocks and sell them on a speedy and transparent computer network. It was founded by Gordon Macklin.

Makeup OF NASDAQ

nasdaq-history Currently, the stock company has about 3200 trading companies and its trading shares takes place in different kinds of companies including:

Consumer durables and non-durables.
Capital goods.
Healthcare.
Public utility.
Finance.
Energy.
Transportation.
Technology.

HISTORY OF NASDAQ

In early 1961, the S.E.C (Security and Exchange Commission) was given the go ahead to look into the reason why fragmentation was present when it came to the trading of Over the Counter stocks (OTC). In the course of the investigation, the National Association of Securities Dealers (NASD) was commissioned by the S.E.C so as to find out whether the automation process would aid in the trades’ execution.

In 1971, NASD thereby founded the National Association of Securities Dealers Automated Quotations (NASDAQ). This NASDAQ was purposed to act as some sort of exchange for the Over the Counter securities. However, all the trading transactions were carried out electronically. During the first instance, NASDAQ comprised a bulletin board kind of system. There was no actual trade taking place between sellers and buyers. Furthermore, NASDAQ aided to even out the odds for both parties by narrowing down the extent between the ask prices and the bid prices. However, various brokerage firms were against this trend since it meant that they would not earn as much as they would supposing the old business rules were followed.

In 1990, the organization became the first of its kind to leverage capital markets and introduce technology expertise all with the aim of providing better services to the clients and attract even more investors.

In 1998, the National Association of Securities Dealers Automated Quotations merged with American Stock Exchange (A.S.E) and together they formed the NASDAQ-Amex Market Group. This group became the biggest stock market to perform electronically in the United States of America in both the total amount of volume generated and the number of shares traded.

Dot Com Boom

Due to this developments, NASDAQ will adapt its system to be associated with the Dot Com bubble for generations to come. Since NASDAQ comprises of technology stocks, this factor gave way to the great rise and fall of the stock market mostly as a result of technological issues especially with big names like Oracle, Cisco, and Microsoft being in charge.

By the time we got to 2001, through a number of transactions, the Norwegian exchange known as OMX bought NASDAQ. As a result, it was renamed to NASDAQ- OMX Group. This purchase helped NASDAQ to become not only the second largest stock exchange company in the United States of America but also the fourth largest stock exchange company in the whole world.

After the transaction took place, the National Association of Securities Dealers Automated Quotations started operating in New York. NASDAQ was its own regulatory company and this allowed it to become a securities exchange with the self-regulating feature enabling it to set out its own rules and regulations for the participating parties. In the year 2005, NASDAQ began to offer public relations and = investor relations not forgetting multimedia services to the companies under them so as to improve their capital health.

In mid-2007, NASDAQ bought the Boston Stock Market. This made its client base grow even bigger as the clients of BSM were now part of the merged stock company. In 2008, the NASDAQ also bought the Philadelphia Stock Exchange. The more companies it merged with, the more clients NASDAQ attracted. It is for this reason that the firm is among the largest in the world.

In the year 2013, NASDAQ OMX Group acquired Thomson Reuters’ public relations, multimedia solutions, and investor relations businesses so as to expand its corporate solutions business. This acquisition made NASDAQ OMX Group to be the number one provider of company solutions. It extended this service to well over ten thousand clients.

In 2014, NASDAQ OMX Group rebranded back to NASDAQ. This was due to its fast growth and global recognition hence there was a need for a permanent identity to represent the brand.

In 2015, the National Association of Securities Dealers Automated Quotation acquired the analytics group and index provider Dorsey Wright and Associates.

September 1, 2017 / 0 Comments

Everything You Need to Know About Stock Market IPOs

The market is following new trends these days and the big investors are enjoying this game. Here we are going to talk about ‘Initial Public Offering’ or IPO. It deals with some kind of public offerings according to which company shares are sold to some specialized institutional investors and they are further sold to general public. If you are still little confused about the term and want to have a clear idea so that you can plan some profit out of it then keep reading the details below.

What is Initial Public Offering or IPO?

As companies need money in a large amount to keep their workspace functional so they often use to follow two common techniques, first one is to take more loans from banks or other financial sources and the second most useful way are to raise their own capital with the help of shares. Note that, each share used to be a part of that company so selling some portions of these shares can lead to easy flow. When you buy those shares then you actually hold a part of that company as well as its associated profits. This share trading use to happen in primary market but when they are bought by investors then they get assigned to a secondary market and then their trading begins on daily basis.

How can you invest in IPOs?

There are two options for investors; either they can choose to get shares via fixed price method or the second choice is to use book building technique. Note that, in case of fixed price shares, the rate is decided by the owner company itself whereas for the second case the shares are sold on the basis of bidding. You can bid as per your abilities within a pre-defined range.

Benefits of Investing in IPOs:

The term stock market is completely a betting system where people take chances on the expected future growth of a company. If you buy shares timely, you can expect to stay in safe position because it will naturally bring more chances of big profits with continuous price rise. With IPOs, you can become the very first investor with the company potential. The best part is that these shares use to have unlimited growth with years and you can expect a big amount as a return after few years.

Risks Involved with IPOs:

Here is one interesting fact to know that IPOs are often generated by new companies so these investments involve more risks. Investors have to make decisions about expected growth of the company. In case if the company is not able to maintain its promises after IPO than shares may tank and investors may lose more money. Also, such unlisted companies do not use to have any track record of their financial performance so investors cannot collect insights about the future possibilities.

Investors are always advised to collect clear idea about company’s financial performance to have safe investments and for beginners; it is good to start with a low amount that they can afford to lose without any major harm.

August 3, 2017 / 2 Comments

How to Choose a Stock Broker That’s Right For You

Unlеѕѕ уоu аrе a ѕtосk brоkеr уоurѕеlf, you might need to hirе a brоkеr tо hаndlе уоur invеѕtmеntѕ fоr уоu. Brоkеrѕ are the реорlе whо wоrk fоr brоkеrаgе hоuѕеѕ аnd can buу аnd sell ѕtосk on thе ѕtосk exchange. A lost оf реорlе wonder if they rеаllу nееd a broker. Thе answer is уеѕ. Yоu must have a broker if уоu plan to buу or ѕеll stocks оn the ѕtосk еxсhаngе.

Mоѕt brоkеrѕ hаvе a background in buѕinеѕѕ or finance, with a Bachelors оr mоrе advanced degree. In оrdеr to obtain thеir license, stockbrokers аrе rеquirеd tо раѕѕ twо diffеrеnt tests, whiсh аrе рrеttу difficult.

Registered Brokers

Thе vеrу firѕt thing that уоu ѕhоuld lооk for whilе сhооѕing a ѕtосk brоkеr is whеthеr it iѕ rеgiѕtеrеd. If the Brоkеr is rеgiѕtеrеd, thеn it remains accountable to уоu аt every point of timе. If уоu, еvеr, fасе аnу diffiсultiеѕ with a раrtiсulаr brоkеr thеn уоu саn dirесtlу intimаtе such to thе regulatory аuthоritу.

Financial Goals

Thе nеxt imроrtаnt thing that уоu should kеер in mind iѕ уоur invеѕtmеnt gоаlѕ аnd the kind of ѕеrviсеѕ уоu are lооking fоr. Different brоkеrѕ offer vаriеtiеѕ оf ѕеrviсеѕ, whiсh mау not mаtсh with your nееd. Thuѕ, bеfоrе gоing for a ѕtосk brоkеr, go through their service dеtаilѕ.

Oftеn times реорlе dоn’t understand thе different bеtwееn a brоkеr аnd a ѕtосk mаrkеt аnаlуѕt. A stock brоkеr iѕ only there to fоllоw уоur inѕtruсtiоnѕ to either buy or ѕеll ѕtосkѕ; they dо nоt аnаlуzе ѕtосkѕ. On the оthеr hand, an аnаlуѕt litеrаllу аnаlуzеѕ the stock mаrkеt, аnd рrеdiсtѕ what it will оr will not dо, or hоw ѕресifiс stocks will реrfоrm.

Most brоkеrѕ earn thеir inсоmе frоm commissions on ѕаlеѕ. Whеn уоu tell уоur brоkеr to buy оr ѕеll a ѕtосk, they earn a сеrtаin реrсеntаgе оf thе trаnѕасtiоn. Mаnу brоkеrѕ сhаrgе a flаt ‘реr trаnѕасtiоn’ fее.

Types of Brokers

Thеrе аrе twо kindѕ оf brokers: Diѕсоunt brоkеrѕ аnd full ѕеrviсе brоkеrѕ. Discount brоkеrѕ, like ETRADE, tурiсаllу dо nоt offer аnу аdviсе and dо no research – thеу juѕt do аѕ you аѕk thеm tо dо, withоut аll оf thе bеllѕ and whistles. Full service brokers can uѕuаllу оffеr more tуреѕ of invеѕtmеntѕ, mау рrоvidе you with invеѕtmеnt аdviсе, and iѕ uѕuаllу раid in commissions.

Whеn it comes tо brоkеrѕ, the biggеѕt dесiѕiоn you muѕt mаkе iѕ uѕuаllу whether tо use a full ѕеrviсе brоkеr оr a discount brоkеr.

If уоu аrе new tо investing, уоu mау nееd tо go with a full service brоkеr tо make ѕurе уоu аrе mаking wiѕе investment dесiѕiоnѕ. Full ѕеrviсе brokers оffеr уоu the skill thаt уоu lack аt thiѕ роint. On thе other hand, if you аlrеаdу have еnоugh knоwlеdgеаblе аbоut the stock mаrkеt, all you rеаllу nееd iѕ a discount broker whо will mаkе уоur trаdеѕ fоr уоu.

July 26, 2017 / 1 Comment

How to Read a Stock Chart Like a Pro

Every time you tune into some TV channel specializing about the stock market, you must be overwhelmed by the amount of raw data they are showing to the viewers. The success in stock market depends on how well you can interpret and analyze the data, i.e. the stock charts. A stock chart tells all about the stock market. There are various types of charts such as candlestick charts, support and resistance, trend lines, OHL (open-high-low-close), point and figure and others which are viewable in different frames. One common thing about all charts is that the charts are either daily, weekly or monthly and always shows a pattern. Analysing stock market data

Stock Chart Types

Although there are different types of stock charts available, most charts display price and volume of stocks. Candlestick charts are one of the most common patterns used by Japanese people and became popular worldwide. Candlestick charts are used when you have a dataset that contains low, open, high or close values for each time period. The candlestick charts look like box either filled or hollow. Many traders consider candlestick charts more visually appealing and easier to interpret. Each candlestick provides an easy-to-decipher picture of the price action of a stock. From the candlestick charts, a trader can easily get the relationship between the open and close value and the high and low value of a stock for a particular time frame. The open and close are considered the most vital information in the candlestick chart. As a general information, a hollow candlestick indicates buying pressure and filled candlestick indicates selling pressure of a stock.

Support and Resistance

In the stock market, support and resistance are two important values in the stock chart. Someone wants to invest in the stock market must understand the meaning of these two values thoroughly. Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. When the price declines towards the support level, the stock value goes very low. As a result, the buyer wants to buy more stock, but the seller is less inclined to sell. As the price reaches the support value, it is believed that demand will overcome supply and prevent the price from falling below support. Resistance is exactly opposite to the support. Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. As the stock price rises towards resistance value, the seller wants to sell stocks, but the buyer is less inclined to but due to high price. As the price reaches resistance value, it is believed that supply will overcome demand and prevent the price from rising above resistance.

Trend Lines

Out of all the technical jargons in the stock market, the trend line is the hottest topic among technical analyst and traders. A trend line is a chart that gives a quick understanding of the market from the uptrend and downtrend of the stock values. Trend line charts are the most important for a newcomer or a veteran in the stock market.

July 23, 2017 / 2 Comments

Introduction to Exchange Traded Funds

The ETF trеnd trading has lоng been a рорulаr wау оf mаking mоnеу. Yоu саn gеt rich very quick if уоu knоw whаt you’re doing, but уоu dо nееd to be familiar with thе соmраniеѕ thаt уоu ѕtаrt investing in and if you аrе nоt, уоu may wаnt to get some рrоfеѕѕiоnаl hеlр.

ETF of ѕtаndѕ fоr еxсhаngе trаdеd fundѕ, a рорulаr invеѕtmеnt vеhiсlе whiсh is trаdеd оn thе stock еxсhаngеѕ. Thеу wоrk vеrу muсh likе ѕtосkѕ, аnd thеу аlѕо hоld аѕѕеtѕ in thе wау оf stocks оr bоndѕ аnd they trаdеd рrеttу muсh thе ѕаmе price аѕ a nеt аѕѕеt vаluе dоеѕ.

Thе rеаѕоn thеу hаvе bесоmе particularly attractive invеѕtmеntѕ tо many реорlе iѕ bесаuѕе thеrе lоw соѕtѕ. They have ѕtосk-likе fеаturеѕ, so they аrе a very welcome аdditiоn оr сhаngе to those who аrе аlrеаdу familiar with the ѕtосk mаrkеt and trаding in ѕtосkѕ аnd ѕhаrеѕ. They also have a very fаvоurаblе tаx еffiсiеnсу, and thеу аrе lоw cost tо invest in.

Yоu саn buу аnd ѕеll ѕhаrеѕ dirесtlу to the fund mаnаgеr. These аrе then trаdеd in сrеаtiоn unitѕ whiсh аrе bаѕiсаllу blосkѕ оf many tеnѕ оf thоuѕаndѕ оf ѕhаrеѕ. There аrе many diffеrеnt орtiоnѕ available, and уоu саn get ѕtаrtеd with ѕоmе popular аnd reputable websites which will intrоduсе уоu to thiѕ potentially highlу lucrative орроrtunitу.

Hоw dо ETFѕ earn?

Exсhаngе trаdеd funds or ETFs, wоrk оn thе рrinсiрlе оf bundling tоgеthеr divеrѕifiеd еxсhаngе based ѕесuritiеѕ tо minimize riѕk. ETFѕ are ѕеtuр up tо riѕе аnd fаll with a major mаrkеt indеx. Sеvеrаl wеll knоwn brokerage houses ѕuсh аѕ Bаrсlауѕ, Pimco аnd Fidеlitу nоw оffеr money mаrkеt ETFѕ аѕ аn аltеrnаtivе to mоnеу mаrkеt accounts.

With ѕuсh ETFs “nоn-immеdiаtе” cash allocations is the аim, this еnаblеѕ less conservative investments and роtеntiаllу highеr уiеldѕ. Thе riѕkѕ tаkеn аrе cushioned bу the divеrѕе invеѕtmеntѕ thаt are mаdе. Aсtivе ETFѕ while nоt very liԛuid, gеnеrаllу еаrn better уiеldѕ.

Aсtivе ETFs аrе Eаrning High Intеrеѕt

Since thе introduction оf thе асtivе ETF, yields hаvе vаriеd greatly, thе trеnd thеѕе dауѕ thоugh is that thеу оffеr bеttеr rеturnѕ thаn mоѕt money mаrkеt funds. Trаditiоnаl ETFѕ have соntinuеd to dо well dеѕрitе the blеаk есоnоmу. Fоr reasons that саn’t bе еxрlаinеd, ETFѕ juѕt dоn’t ѕееm tо be tоо affected bу these unсеrtаin timеѕ.

Aѕ ETFs gо, thе wiѕеѕt investments are thоѕе that are highly customized. Dоn’t grab up a сеrtаin type оf ETF just bесаuѕе it’s рорulаr to do ѕо. Thе bеѕt thing tо dо iѕ to tаlk to a consultant ѕо thаt hе саn аdviѕе you on the bеѕt ETFѕ fоr your portfolio. Whilе ETFs are аlrеаdу divеrѕifiеd, furthеr divеrѕifiсаtiоn within уоur portfolio will уiеld bеttеr rеturnѕ.

June 30, 2017 / 0 Comments

The Comprehensive Guide to After Hours Stock Trading

The marketing and buying of securities outside normal trading periods is after-hours trading. This type of stock trading can take place between 9:30 in the morning and 4 PM. Potential sellers and buyers communicate with each other through electronic communication networks. This match will occur without making use of a stock exchange. Is your quest for after hours stock trading? Reading through the rest part of this article will help you on after hours stock trading.

Benefits Of After-hours Stock Trading:

After-hours stock trading is comfortable
This method of trading stock is flexible
Economic indicators and important news are available outside normal trading hours
Traders have the opportunity to trade on new information with ease
You will not have to wait for normal trading day to make decisions
Traders can find some great prices during this period

Limitation To After-Hours Trading:

A great risk attached to this form of trading is volatility

Real After-Hours Trading Periods:

Studies have shown that after-hours trading in the morning can occur between 8 AM and 9:15 AM. After-hours trading can as well occur between 4:15 PM and 8 PM. As early as 6 AM, you can also discover some pre-market trading. This opportunity can take place during normal trading periods and days. It will continue for a period of time until the market resumes in the morning.

How To Use After-Hours Volume To Find The Most Volatile Stocks:

When the bell rings, news releases or company earnings appear to traders. When traders react to the news, there will be both volatility and volume. Most of these events happen when the market is complete. This will give traders the avenue to react to the events as they appear. It means that a trader will not have to wait for the following day. If you want to take advantage of any opportunity, explore the calendar showing a list of stocks.
One important thing to know when finding the volatile stocks is to take note of them during the day. Go ahead to narrow them down into a smaller option of stock to trade. Traders can achieve this goal by using a filter of stocks carrying an average volume of fewer shares. If the shares do not show any important volume between 9:30 and 4 PM, then you may not expect changes. tradeaalysis

Facts About After-Hours Trading:

This innovation in stock trading is possible through the operation of ECNs. ECNs remain a system that enables investors to communicate by using electronic devices. This system allows big investors to communicate without an appearance. The after-hours concept has been available in time past. This is to create an excellent communication medium for investors. Most investors can now access after-hours trading by using a brokerage account. This can refer to after-hours market and extended-hours trading.

Conclusion:

When the last transaction occurs, then after-hours market closes. It will display the last cost of a stock that traders have access to in the after-hours market. It is a complex concept for people who do not understand the deal. The truth is that after-hours stock trading can be beneficial.

June 20, 2017 / 0 Comments

Stock Market Futures: Everything You Need to Know

Want to know what are stock market futures? Here is everything you need to know about them. Stock futures are trade contracts that give you the necessary power required to buy or sell stocks at the agreed fixed price by a specific date in the future. When you accept the contract, you are required to uphold all the terms of the agreement. The contracts have consistent specifications like the method of payment, tick size, price per unit quotation, expiry date and market lot. stock-market

Stock Futures math

Futures Price = (Spot Price + Carrying Charge)
The stock futures price is usually higher than the spot price. Futures price is a price for which a commodity can be sold or bought for delivery in future. The spot price is the present-day market price at which a commodity can be sold or bought for immediate delivery and payment. Carrying Charge or Cost of Carry is the storing cost of a physical commodity like metals or grains over a period of time or until the futures contract matures less all the expected dividends within the contract period. stock-market-bids
Example:
The spot Price of ABC = 2000 and Interest Rate = 8% p.a.
So, the Futures Price contract for 1 month =2000 + 2000*0.08*30/365 = 2000 + 13.15= 2013.15

Meet the Players

1. Hedgers

Hedgers can be exporters, importers, manufacturers, and farmers. The main aim is to buy and sell futures in a bid to secure future price of a commodity to be sold later in the cash market. Those holding the contract for a short time will want to get as high prices as possible while for long term holders it is vice versa. Usually, almost all the risks associated with price volatility are reduced. Hedging sometimes can be used to lock the price margins between the price of raw materials and that of the finished product.

2. Speculators

The other market players’ main aim is to benefit from the risks associated with the futures market. Speculators profit from the price changes that hedgers try to protect. When hedgers are trying to reduce risk the speculators are trying to increase it in order to maximize their bottom line. If the hedger is anticipating a future decline in prices then he or she would be selling to the speculator such a contract at a low price. Also, the speculators enter the market for the sake of profits only through selling and buying futures but not owning the commodity.

Characteristics of Stock Market Futures

Contract size – it is also referred to as a lot. What this means is that one contract can have many shares and the number of shares included is the size of the contract. When buying and selling futures, a single share is not usually traded. For example, if a contract has 300 shares, the selling and buying will involve the whole bunch.
Expiry – there are three types of maturities associated with stock futures. They include near month contracts (1 month), middle month contracts (2 months) and far month contracts (3 months). All maturities expire on their particular contract months (last Thursday of the contract month) and they are traded simultaneously. All stock futures contracts are for future transactions. So, the contract duration determines how far in the future it will be settled.
Leverage – this is having control of commodities worth more than your capital. With just a small amount of cash, you have the green light to enter into a stock futures contract worth more than what to can afford, at the moment, to pay. A small shift in prices can mean a huge loss or profit.
Pricing and limits – the stock futures market price quotations are done in the same way as in cash market, that is, per unit, cents or dollars. However, there are restrictions on the price movements for a futures contract. So, there is an upper and a lower price boundary set per day that heavily relies on the previous day closing.

Conclusion

Lastly, the profits and losses are determined by the prices between the closing price and the opening price of the futures. For example, if an investor buys “Y” futures at $530 each in November, he or she may sell the same futures at $550 each in the same month. In that case, the investor would bag a profit of $20 per future. But if he or she sells the same futures at $505, then he or she would make a $25 loss per future.
References
http://money.howstuffworks.com/personal-finance/financial-planning/stock-future.htm
http://www.bseindia.com/markets/Derivatives/DeriReports/FAQsStockFutures.aspx?expandable=5
https://www.kotaksecurities.com/ksweb/Research/Investment-Knowledge-Bank/what-are-futures-contracts
http://www.investinganswers.com/financial-dictionary/optionsderivatives/futures-1002
http://www.sharemarketschool.com/futures-understanding-the-basic-terms/
https://www.thebalance.com/what-are-futures-definition-and-examples-1031172