Tuesday, December 1, 2009
Friday, October 23, 2009
Boost Investment Profits: Learn Forex Trading
If the stock market has been a rough ride this year, learn Forex trading and get your investment portfolio back on track. The benefits are greater than playing the stock market and, unfortunately, the losses can be just as great. However, if you educate yourself and increase your understanding of the market, trading currencies in the Foreign Exchange market could be a very lucrative shift in your investment strategy.
The Forex, or FX which is an abbreviated reference to the Foreign Exchange market, is the biggest money market in the planet. It's even larger than the stock market. Due to the Forex factors, which include low volatility, good liquidity and the ability to leverage, you can gain and lose money very quickly.
The fundamentals of Foreign Exchange are fairly simple. It's the simultaneous purchase of currency, such as the US dollar while selling another currency, such as the Japanese Yen. Currencies are always traded in twos and are traded electronically. The Forex market isn't in a physical place, such as the New York Stock Exchange. They're referred to as an OTC market, or "over-the-counter."
It's important when you're first starting out to identify which global currencies are most often traded. These are generally from countries with stable administrations, credible banking systems and low inflation. Those currencies include the US Dollar, Swiss Franc, Australian and Canadian Dollars and The Euro.
There was a time when money trading was an activity which was restricted to institutions such as banks, hedge funds and big corporations. Because of the Internet, the Forex market is now accessible by individual investors. Some of these traders are in it for the sheer speculation, hoping to cash in on profits gained from instant fluctuations in exchange rates. Others are seeking a way to protect their investments from adverse fluctuations in rates in the future. Businesses in particular fall into this second category trying to hedge against risk should future exchange rates fall dramatically.
The Forex market is open all day long over a five day week. This is to accommodate trades across the globe in all time zones. This allows investors the freedom to trade at any time of the day, capitalizing on a market that changes, virtually, when the wind changes direction.
If the Forex market has captured your imagination, speak to your financial adviser to ensure that you have a good understanding of currency trading. You'll want to minimize your losses when you first get going. There are many websites on the internet where you can practice Forex trading by making simulated trades without using real money.
The Forex, or FX which is an abbreviated reference to the Foreign Exchange market, is the biggest money market in the planet. It's even larger than the stock market. Due to the Forex factors, which include low volatility, good liquidity and the ability to leverage, you can gain and lose money very quickly.
The fundamentals of Foreign Exchange are fairly simple. It's the simultaneous purchase of currency, such as the US dollar while selling another currency, such as the Japanese Yen. Currencies are always traded in twos and are traded electronically. The Forex market isn't in a physical place, such as the New York Stock Exchange. They're referred to as an OTC market, or "over-the-counter."
It's important when you're first starting out to identify which global currencies are most often traded. These are generally from countries with stable administrations, credible banking systems and low inflation. Those currencies include the US Dollar, Swiss Franc, Australian and Canadian Dollars and The Euro.
There was a time when money trading was an activity which was restricted to institutions such as banks, hedge funds and big corporations. Because of the Internet, the Forex market is now accessible by individual investors. Some of these traders are in it for the sheer speculation, hoping to cash in on profits gained from instant fluctuations in exchange rates. Others are seeking a way to protect their investments from adverse fluctuations in rates in the future. Businesses in particular fall into this second category trying to hedge against risk should future exchange rates fall dramatically.
The Forex market is open all day long over a five day week. This is to accommodate trades across the globe in all time zones. This allows investors the freedom to trade at any time of the day, capitalizing on a market that changes, virtually, when the wind changes direction.
If the Forex market has captured your imagination, speak to your financial adviser to ensure that you have a good understanding of currency trading. You'll want to minimize your losses when you first get going. There are many websites on the internet where you can practice Forex trading by making simulated trades without using real money.
How To Profit When Investing In The Stock Market
If you have been trading stocks for any length of time, I guarantee you've noticed how quickly the market can fluctuate This makes it difficult for many people to choose a good company to invest in and even more difficult to profit in the stock market once they have invested money. In the following article, we will discuss some important information about how to get ahead when you invest in the stock market.
Unfortunately, only a few people are able to buy and sell at the right time. Because it is now so easy to buy and sell stocks via the internet, there are many people who get ahead of themselves, so to speak, and end up trading at the wrong times. In reality, there is no stock market investment that is one hundred percent guaranteed, therefore, you must be able to recognize the best opportunities when you invest in the stock market to get ahead. Maximum profits can only be achieved when you learn to spot these moments. Never gamble all that you have with just one company, especially if you are a newbie to the stock market. As a newcomer, you can get ahead by starting out with small investments as opposed to large stock market investments. Once you have a better understanding of the stock market and can find some of its behaviors, you will be able to make smarter decisions when investing. If you are not ready to lose any money, do not invest in any company that you are not comfortable with. It is a smart idea for any guru or newbie of the stock market to make comfortable buys and sells. Of course, you will have to take some risks when you invest in the stock market, but the key is to avoid the losers in the stock market if you want to get ahead. Missing out on a good stock will not hurt you as much as investing in a losing trade.
To minimize losses and maintain profit, stock market investing gurus often use a technique that is known as the stop loss. In this technique, stock market investors will hang on to a stock while it is rising, or doing its best. At that time, they maintain a mental selling price should they need to liquidate their shares for cash at any time. This may be a strategy that you are interested in learning if you plan to spend any time trading in the stock market. However, you will want to have sufficient experience in the stock market before attempting this sort of strategy. This is undoubtedly not a technique that you will want to try while just learning how to invest in the stock market.
Unfortunately, only a few people are able to buy and sell at the right time. Because it is now so easy to buy and sell stocks via the internet, there are many people who get ahead of themselves, so to speak, and end up trading at the wrong times. In reality, there is no stock market investment that is one hundred percent guaranteed, therefore, you must be able to recognize the best opportunities when you invest in the stock market to get ahead. Maximum profits can only be achieved when you learn to spot these moments. Never gamble all that you have with just one company, especially if you are a newbie to the stock market. As a newcomer, you can get ahead by starting out with small investments as opposed to large stock market investments. Once you have a better understanding of the stock market and can find some of its behaviors, you will be able to make smarter decisions when investing. If you are not ready to lose any money, do not invest in any company that you are not comfortable with. It is a smart idea for any guru or newbie of the stock market to make comfortable buys and sells. Of course, you will have to take some risks when you invest in the stock market, but the key is to avoid the losers in the stock market if you want to get ahead. Missing out on a good stock will not hurt you as much as investing in a losing trade.
To minimize losses and maintain profit, stock market investing gurus often use a technique that is known as the stop loss. In this technique, stock market investors will hang on to a stock while it is rising, or doing its best. At that time, they maintain a mental selling price should they need to liquidate their shares for cash at any time. This may be a strategy that you are interested in learning if you plan to spend any time trading in the stock market. However, you will want to have sufficient experience in the stock market before attempting this sort of strategy. This is undoubtedly not a technique that you will want to try while just learning how to invest in the stock market.
Wednesday, October 7, 2009
Options strategies
An option strategy is implemented by combining one or more option positions and possibly an underlying stock position. Options are financial instruments that give the buyer the right to buy (for a call option) or sell (for a put option) the underlying security at some specific point of time in the future (European Option) or until some specific point of time in the future (American Option) for a price (strike price), which is fixed in advance (when the option is bought). Options strategies can favor movements in the underlying stock that are bullish, bearish or neutral. In the case of neutral strategies, they can be further classified into those that are bullish on volatility and those that are bearish on volatility. The option positions used can be long and/or short positions in calls and/or puts at various strikes.
Calls increase in value as the underlying stock increases in value. Likewise puts increase in value as the underlying stock decreases in value. Buying both a call and a put means that if the underlying stock moves up the call increases in value and likewise if the underlying stock moves down the put increases in value. The combined position can increase in value if the stock moves significantly in either direction. (The position loses money if the stock stays at the same price or within a range of the price when the position was established.) This strategy is called a straddle. It is one of many options strategies that investors can employ.
A call option is a financial contract between two parties, the buyer and the seller of this type of option. It is the option to buy shares of stock at a specified time in the future.[1] Often it is simply labeled a "call". The buyer of the option has the right, but not the obligation to buy an agreed quantity of a particular commodity or financial instrument (the underlying instrument) from the seller of the option at a certain time (the expiration date) for a certain price (the strike price). The seller (or "writer") is obligated to sell the commodity or financial instrument should the buyer so decide. The buyer pays a fee (called a premium) for this right. Call options are most profitable for the buyer when the underlying instrument is moving up, making the price of the underlying instrument closer to the strike price. The call buyer believes it's likely the price of the underlying asset will rise by the exercise date. The risk is limited to the premium. The profit for the buyer can be very large, and is limited by how high underlying's spot rises. When the price of the underlying instrument surpasses the strike price, the option is said to be "in the money".
Call options can be purchased on many financial instruments other than stock in a corporation. Options can be purchased on futures on interest rates, for example (see interest rate cap), and on commodities like gold or crude oil. A tradeable call option should not be confused with either Incentive stock options or with a warrant. An incentive stock option, the option to buy stock in a particular company, is a right granted by a corporation to a particular person (typically executives) to purchase treasury stock. When an incentive stock option is exercised, new shares are issued. Incentive stock options are not traded on the open market. In contrast, when a call option is exercised, the underlying asset is transferred from one owner to another.
Stock Options
Option (finance): In finance, an option is a contract between a buyer and a seller that gives the buyer the right—but not the obligation—to buy or to sell a particular asset (the underlying asset) at a later day at an agreed price. In return for granting the option, the seller collects a payment (the premium) from the buyer. A call option gives the buyer the right to buy the underlying asset; a put option gives the buyer of the option the right to sell the underlying asset. If the buyer chooses to exercise this right, the seller is obliged to sell or buy the asset at the agreed price. The buyer may choose not to exercise the right and let it expire. The underlying asset can be a piece of property, or shares of stock or some other security, such as, among others, a futures contract. For example, buying a call option provides the right to buy a specified quantity of a security at a set agreed amount, known as the 'strike price' at some time on or before expiration, while buying a put option provides the right to sell. Upon the option holder's choice to exercise the option, the party who sold, or wrote the option, must fulfill the terms of the contract.
Every financial option is a contract between the two counterparties with the terms of the option specified in a term sheet. Option contracts may be quite complicated; however, at minimum, they usually contain the following specifications:
Every financial option is a contract between the two counterparties with the terms of the option specified in a term sheet. Option contracts may be quite complicated; however, at minimum, they usually contain the following specifications:
- whether the option holder has the right to buy (a call option) or the right to sell (a put option)
- the quantity and class of the underlying asset(s) (e.g. 100 shares of XYZ Co. B stock)
- the strike price, also known as the exercise price, which is the price at which the underlying transaction will occur upon exercise
- the expiration date, or expiry, which is the last date the option can be exercised
- the settlement terms, for instance whether the writer must deliver the actual asset on exercise, or may simply tender the equivalent cash amount
- the terms by which the option is quoted in the market to convert the quoted price into the actual premium–the total amount paid by the holder to the writer of the option.
Types of Options:
The primary types of financial options are:
§ Exchange traded options (also called "listed options") are a class of exchange traded derivatives. Exchange traded options have standardized contracts, and are settled through a clearing house with fulfillment guaranteed by the credit of the exchange. Since the contracts are standardized, accurate pricing models are often available. Exchange traded options include:[4][5]
1. stock options,
2. commodity options,
3. bond options and other interest rate options
4. stock market index options or, simply, index options and
5. options on futures contracts
§ Over-the-counter options (OTC options, also called "dealer options") are traded between two private parties, and are not listed on an exchange. The terms of an OTC option are unrestricted and may be individually tailored to meet any business need. In general, at least one of the counterparties to an OTC option is a well-capitalized institution. Option types commonly traded over the counter include:
1. interest rate options
2. currency cross rate options, and
3. options on swaps or swaptions.
§ Employee stock options are issued by a company to its employees as compensation.
Employee Stock Option:
An employee stock option is a call option on the common stock of a company, issued as a form of non-cash compensation. Restrictions on the option (such as vesting and limited transferability) attempt to align the holder's interest with those of the business' shareholders. If the company's stock rises, holders of options experience a direct financial benefit. This gives employees an incentive to behave in ways that will boost the company's stock price.
Employee stock options are mostly offered to management as part of their executive compensation package. They are also offered to lower staff, especially by businesses that are not yet profitable. They can also be offered to non-employees: suppliers, consultants, lawyers and promoters for services rendered.Employee stock options (ESOs) are non-standardized calls that are issued as a private contract between the employer and employee. Over the course of employment, a company generally issues vested ESOs to an employee which are struck at a particular price, generally the company's current stock price. Depending on the vesting schedule and the maturity of the options, the employee may elect to exercise the options at some point, obligating the company to sell the employee its stock at whatever stock price was used as the strike price. At that point, the employee may either sell the stock, or hold on to it in the hope of further price appreciation or hedge the stock position with listed calls and puts.
Types of Employee Stock Options:
In the U.S., stock options granted to employees are of two forms, that differ primarily in their tax treatment. They may be either:
- Incentive stock options (ISOs)
- Non-qualified stock options (NQSOs or NSOs)
Thursday, September 10, 2009
Australian Securities Exchange
The Australian Securities Exchange (ASX) is the primary stock exchange in Australia. The ASX began as separate state-based exchanges established as early as 1861. Today trading is all-electronic and the exchange is a public company, listed on the exchange itself.The Australian Securities Exchange as it is now known resulted from the merger of the Australian Stock Exchange and the Sydney Futures Exchange in December 2006.
The biggest stocks traded on the ASX, in terms of their market capitalisation, include BHP Billiton, Commonwealth Bank of Australia, Telstra Corporation, Rio Tinto, National Australia Bank and Australia and New Zealand Banking Group. The ASX is a public company, and its own shares are traded on the ASX.
HOW TO START TRADING IN ASX:
First-time Investors: Starting in the sharemarket seems daunting to many people but in reality once you have learnt some basic information it is straight forward. Below is a step-by-step guide put together by our education experts to help you start investing.
1)Sign up with MyASX: MyASX is a collection of free sharemarket services. With MyASX you can play Sharemarket Games, create Watchlists, subscribe to monthly email newsletters, learn how to start and run an investment club and access free online classes.
To access these services, you must be registered.
2)Online education: Learning how to invest is an important skill. By working through these ASX classes you wil develop a base of knowledge that will help you understand how to invest and determine what might be a suitable investment for you.
Audio visual presentations - covers sharemarket fundamentals. Presentations run for a few minutes.
3) Research: Simple research involves things such as reading financial newspapers, considering world events and watching how markets and the price of individual companies react. Share trading and financial education seminars help new investors keep up to date with a variety of sharemarket topics.
4) Find a stockbroker: Once you have a basic understanding of how the market operates and an awareness of some companies you will need a stockbroker. There are a couple of things to consider before you start looking for a broker, such as how much money you would like to invest in the market or whether or not you will need help to decide which shares to invest in.Our Find a broker search engine allows you to select the products, services and types of investments you are looking to get from a broker.
Types of brokers:
Full service brokers
Offering advice on buying and selling securities, make recommendations, provide research and compile tailored investment plans. They typically charge a higher brokerage fee as a result of the advice and other services offered.
Accredited advisers are also available for options, warrants and futures.
Non-advisory brokers:
Offering no recommendations or advice regarding the appropriateness of your decision, hence their brokerage fees tend to be lower. This is an attractive option for investors confident in their sharemarket knowledge and trading decisions. They are typically either internet based or telephone based.
5)Monitor your investments: Once you have invested you will need to monitor the portfolio performance.Depending on your objectives you may monitor once a year or several times a day. Watchlists will help you keep track of the value of a number of shares and other securities quickly and easily.
Dividends:Your companies may also pay dividends from time to time. You may need details about the payments for tax purposes. Detailed dividend information is available from the Dividends pages.
6) Keep learning: Smart investors never stop learning. ASX classes, newspapers, television programmes, stockbroker research publications, company announcements are all good sources of information for investors.
ASX has a pre-market session from 07:00am to 10:00am AEST and a normal trading session from 10:00am to 04:00pm AEST.
The biggest stocks traded on the ASX, in terms of their market capitalisation, include BHP Billiton, Commonwealth Bank of Australia, Telstra Corporation, Rio Tinto, National Australia Bank and Australia and New Zealand Banking Group. The ASX is a public company, and its own shares are traded on the ASX.
HOW TO START TRADING IN ASX:
First-time Investors: Starting in the sharemarket seems daunting to many people but in reality once you have learnt some basic information it is straight forward. Below is a step-by-step guide put together by our education experts to help you start investing.
1)Sign up with MyASX: MyASX is a collection of free sharemarket services. With MyASX you can play Sharemarket Games, create Watchlists, subscribe to monthly email newsletters, learn how to start and run an investment club and access free online classes.
To access these services, you must be registered.
2)Online education: Learning how to invest is an important skill. By working through these ASX classes you wil develop a base of knowledge that will help you understand how to invest and determine what might be a suitable investment for you.
Audio visual presentations - covers sharemarket fundamentals. Presentations run for a few minutes.
3) Research: Simple research involves things such as reading financial newspapers, considering world events and watching how markets and the price of individual companies react. Share trading and financial education seminars help new investors keep up to date with a variety of sharemarket topics.
4) Find a stockbroker: Once you have a basic understanding of how the market operates and an awareness of some companies you will need a stockbroker. There are a couple of things to consider before you start looking for a broker, such as how much money you would like to invest in the market or whether or not you will need help to decide which shares to invest in.Our Find a broker search engine allows you to select the products, services and types of investments you are looking to get from a broker.
Types of brokers:
Full service brokers
Offering advice on buying and selling securities, make recommendations, provide research and compile tailored investment plans. They typically charge a higher brokerage fee as a result of the advice and other services offered.
Accredited advisers are also available for options, warrants and futures.
Non-advisory brokers:
Offering no recommendations or advice regarding the appropriateness of your decision, hence their brokerage fees tend to be lower. This is an attractive option for investors confident in their sharemarket knowledge and trading decisions. They are typically either internet based or telephone based.
5)Monitor your investments: Once you have invested you will need to monitor the portfolio performance.Depending on your objectives you may monitor once a year or several times a day. Watchlists will help you keep track of the value of a number of shares and other securities quickly and easily.
Dividends:Your companies may also pay dividends from time to time. You may need details about the payments for tax purposes. Detailed dividend information is available from the Dividends pages.
6) Keep learning: Smart investors never stop learning. ASX classes, newspapers, television programmes, stockbroker research publications, company announcements are all good sources of information for investors.
ASX has a pre-market session from 07:00am to 10:00am AEST and a normal trading session from 10:00am to 04:00pm AEST.
Friday, September 4, 2009
CANADA StockMarket
Canada's New Stock Exchange, known as CNSX, is an alternative stock exchange in Canada. The CNSX offers simplified reporting requirements and reduced barriers to listing. It is an alternative for microcap and emerging companies. It had been known as CNQ until the organization re-branded itself in November, 2008.
The CNSX is located in Toronto, Canada and maintains a branch office in Vancouver. Responding to the consolidation of stock exchanges in Canada, CNSX's founders identified the need for a low cost, streamlined stock exchange – with an extremely high standard of disclosure. CNSX's unique market model matches enhanced disclosure and streamlined issuer regulation with leading edge technology to meet the needs and characteristics of emerging companies, their investors and investment dealers. This model, combined with comprehensive regulatory oversight, provides an efficient new marketplace that fosters integrity, transparency and liquidity for trading equity securities.
Here is the information just to know the trading basics.
HOW TO START TRADING:
New Issuers: The web site makes it very easy for emerging companies to apply to CNSX. All the necessary Issuer forms and regulatory documents are available, for downloading in PDF format, from the site’s Issuer Info area. And consistent with our principles of openness and disclosure, all CNSX Issuer Policies are easily accessible, and downloadable, in PDF format. These Policies are designed to facilitate the ability of small-cap companies to list their securities for trading on CNSX's stock exchange. We have avoided unnecessary and overly burdensome requirements which, for many companies, can be a real impediment to conducting their own business. Once approved for listing on CNSX, all Issuers have direct access to manage their company web page in the Disclosure Hall through the use of a secure extranet service. For example, Issuers maintain an updated list of press releases, media announcements, capitalization info, etc. through their extranet connection.
Dealers: Investment dealers assisted in the development of the CNSX Trading Rules and the opportunities CNSX's market model provides for Market Makers. Market Makers are authorized dealers who are required to maintain liquidity by entering bids and offers for designated securities, to facilitate a continuous two-sided market. In this hybrid market model all orders are entered into a central limit order book for execution by the automated trading system.
CNSX’s trading rules and operational procedures are designed to ensure full price and time priority. In addition Market Makers receive order flow from non market makers and their clients, concentrating the available liquidity to facilitate active trading of junior stocks.
CNSX Approved Traders may apply to CNSX to become a Market Maker for any number of CNSX Issuer securities. Simply download the PDF Application and send it in; in most cases applications for Market Maker will be processed within 24 hours.
Investors:Investors and other interested members of the general public will appreciate the enhanced disclosure provided by Issuers as well as the functionality and capabilities provided by cnsx.ca.
Investors are able to follow their CNSX investments directly online through the Trading Summaries on the Home Page, or in the Market Activity area of the CNSX web site. Also, a stock search, by name or symbol, is easily accessible from any page on the web site. Users will also appreciate the Investor Info area of the site. This area is divided into three sections: Glossary of Terms; Investment Risk; Investor Education.
The Traders - Inside Canada's Stock Market
Gold Diggers of 1929 : Canada and the Great Stock Market Crash
The CNSX is located in Toronto, Canada and maintains a branch office in Vancouver. Responding to the consolidation of stock exchanges in Canada, CNSX's founders identified the need for a low cost, streamlined stock exchange – with an extremely high standard of disclosure. CNSX's unique market model matches enhanced disclosure and streamlined issuer regulation with leading edge technology to meet the needs and characteristics of emerging companies, their investors and investment dealers. This model, combined with comprehensive regulatory oversight, provides an efficient new marketplace that fosters integrity, transparency and liquidity for trading equity securities.
Here is the information just to know the trading basics.
HOW TO START TRADING:
New Issuers: The web site makes it very easy for emerging companies to apply to CNSX. All the necessary Issuer forms and regulatory documents are available, for downloading in PDF format, from the site’s Issuer Info area. And consistent with our principles of openness and disclosure, all CNSX Issuer Policies are easily accessible, and downloadable, in PDF format. These Policies are designed to facilitate the ability of small-cap companies to list their securities for trading on CNSX's stock exchange. We have avoided unnecessary and overly burdensome requirements which, for many companies, can be a real impediment to conducting their own business. Once approved for listing on CNSX, all Issuers have direct access to manage their company web page in the Disclosure Hall through the use of a secure extranet service. For example, Issuers maintain an updated list of press releases, media announcements, capitalization info, etc. through their extranet connection.
Dealers: Investment dealers assisted in the development of the CNSX Trading Rules and the opportunities CNSX's market model provides for Market Makers. Market Makers are authorized dealers who are required to maintain liquidity by entering bids and offers for designated securities, to facilitate a continuous two-sided market. In this hybrid market model all orders are entered into a central limit order book for execution by the automated trading system.
CNSX’s trading rules and operational procedures are designed to ensure full price and time priority. In addition Market Makers receive order flow from non market makers and their clients, concentrating the available liquidity to facilitate active trading of junior stocks.
CNSX Approved Traders may apply to CNSX to become a Market Maker for any number of CNSX Issuer securities. Simply download the PDF Application and send it in; in most cases applications for Market Maker will be processed within 24 hours.
Investors:Investors and other interested members of the general public will appreciate the enhanced disclosure provided by Issuers as well as the functionality and capabilities provided by cnsx.ca.
Investors are able to follow their CNSX investments directly online through the Trading Summaries on the Home Page, or in the Market Activity area of the CNSX web site. Also, a stock search, by name or symbol, is easily accessible from any page on the web site. Users will also appreciate the Investor Info area of the site. This area is divided into three sections: Glossary of Terms; Investment Risk; Investor Education.
The Traders - Inside Canada's Stock Market
Gold Diggers of 1929 : Canada and the Great Stock Market Crash
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