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I clicked on the link for the company website and I got this:
File not found (404 error)
HMLA COULD RUN 10,000%+ TRUE STORY, HERES WHY. HMLA JUST CAME OUT OF THE DARK WITH 3 FILINGS AND GOING INTO MMJ WITH THE SMALLEST SHARE STRUCTURE VS PRICE IN MARIJUANA INDUSTRY HISTORY.
Amended Statement of Ownership (sc 13g/a)
Date : 09/08/2017 @ 5:29PM
Source : Edgar (US Regulatory)
Stock : Homeland Resources Ltd. (PN) (HMLA)
Quote : 0.0045 0.0005 (12.50%) @ 12:10PM
https://ih.advfn.com/p.php?pid=nmona&article=75612466
HMLA website updated to accept bitcoin payments
OWNING OUR OWN BITCOIN PAYMENT PROCESSING COMPANY MEANS WE CAN ACCEPT PAYMENTS IN ANY AMOUNT FROM ANYWHERE IN THE WORLD
MJ+bitcoin huge gains coming. 25 cents+ when news hits
HMLA recent chronological sequence of events:
On July 14th, 2017 https://homelandcannabis.com/ was created and launched!
The site only said "coming soon"
That same day the site was immediately copyrighted as follows:
Copyright © 2017 - HOMELAND RESOURCES INC - All Rights Reserved.
But when people checked again it had changed to:
Copyright © 2017 - HOMELAND CANNABIS LTD - All Rights Reserved.
A further exploration of the URL owner came back as privacy protected.
Then on July 31st, 2017 Homeland Resources, Ltd. got reinstated on Nevada SOS.
Then on Monday August 7th the website changed from just "coming soon" to having 3 MJ divisions created on the site.
Then on Wednesday August 9th all the Homeland Resources old officers and directors were removed from Nevada SOS and the company was changed from an LLC to a "Series LLC"
So although there's been ZERO news or filings put out by whoever the new HMLA officers and directors will be...there's no such thing as coincidences when the dots start connecting and these PubCo's are being brought back from the dead.
HMLA still has an Authorized Shares amount of 100M only according to Nevada SOS
HMLA ONLY HAS 36 MILLION O\S!!! Not a misprint, no need to scratch your eyes its true. HMLA has only 100 million A/S don't scratch your eyes there either . EVERY SINGLE LOW FLOAT TRADER SHOULD BE IN HMLA RIGHT NOW BUT THEY ARE SLEEPING. They wont be sleeping for long. HAVE YOU GUYS BEEN SEEING THE BIDSSSSSSSSSSSSSS STACKED UP??? And not only are they there, THEY ARE NOT GETTING FILLED. HANDS STRONGER THAN A DIAMOND. Do you think HMLA will run to $1 or $3?
IN ANY BUSINESS FIELD WHEN ONE CONDUCTS SOUND RESEARCH, the first thing they do is perform a COMPARATIVE MARKET ANALYSIS. Its simple as black and white... straight forward, straight shooting fact finding. JUXTAPOSE whatever you are researching with its peers. HMLA FELLAS COMPARE HMLA SHARE STRUCTURE WITH ALL OTHER MMJ RELATED STOCKS...ACTUALLY ANY PENNYSTOCK OUT OF 10,000 OUT THERE. NOW LOOK AT THE PRICE. Something big is going on behind the scenes. HMLA is undervalued big time, not that many shares left. Thinning out
I dont know how to get to you rookies, well, you will see....ugh.
COMPARE HMLA MICROSCOPIC 36 MILLION A\S to its peers LISTED BELOW. The next update will blow single cents out the water for HMLA IMO.
HEMP .04 52WKH .07
A/S
5,500,000,000!!! a/o Jun 30, 2016
O/S
754,027,180
CBIS .113 52WKH....13
A/S
Not Available
O/S
2,312,305,296!!! a/o Nov 07, 2016
MJNA 14 52WKH...28
A/S
5,000,000,000 a/o Sep 30, 2016
O/S
3,025,841,854 a/o Sep 30, 2016
PHOT .015 52wkh .085
A/S
3,000,000,000 a/o Dec 01, 2016
O/S
1,596,570,761 a/o Dec 01, 2016
EDXC .066 52 week high 9 cents!
A/S
1,000,000,000 a/o Dec 31, 2016
O/S
247,632,774 a/o Dec 31, 2016
EVEN ERBB .0015 52WKH .009 IS HIGHER AND IT HAS 14 BILLION A\S!!! 14 BILLION!!!
A/S
14,750,000,000!!! a/o Dec 31, 2016
O/S
11,379,401,405 a/o Dec 31, 2016
GRNH 0.091 0.0171 - 0.159
A/S
500,000,000 a/o Jun 30, 2016
O/S
307,342,246 a/o Jun 30, 2016
TRTC .30 52wk Range 0.135 - 0.7455
A/S
990,000,000!! a/o Feb 16, 2017
O/S
568,186,036 a/o Feb 16, 2017
MCIG .35 52wk Range 0.0255 - 0.505
A/S
560,000,000 a/o Aug 31, 2016
O/S
340,614,339 a/o Nov 15, 2016
VAPE .0099 52wk Range 0.0012 - 0.032
A/S
1,000,000,000 a/o Jan 16, 2015
O/S
213,676,990 a/o Feb 22, 2016
VBIO 2.23 52wk Range 0.463 - 4.24
A/S
1,000,000,000 a/o Sep 30, 2016
O/S
17,786,515 a/o Feb 13, 2017
RFMK .015 52wk Range 0.0003 - 0.049
A/S
20,000,000,000 a/o Jan 30, 2017
O/S
1,274,496,618 a/o Jan 30, 2017
HMLA ONLY HAS 100 MIL A\S AND IT'S DOWN HERE AT .0045??
HMLA HAS BEEN FLYING UNDER THE RADAR, BASICALLY UNKNOWN FOR THE LAST 4 MONTHS SINCE IT CAME OUT THE DARK. The crowd will be here late.
HMLA doesn't need koolaid, or one doesn't need to be a rocket scientist to analyze this chart.
HMLA IS A STANDING PRESENTATION OF "I should have got that stock, I knew it would run to 8 cents, I even told my friend :×< "
Wall Street has scores of analysts, strategists and portfolio managers hired to do one thing: beat the market.
The OTC Bulletin Board (which is a facility of FINRA), and OTC Link LLC (which is owned by OTC Markets Group, Inc., formerly known as Pink OTC Markets Inc.), for example, operate within the OTC market, particularly with respect to OTC equity securities.
The NYSE And Nasdaq: How They Work
Whenever someone talks about the stock market as a place where equities are exchanged between buyers and sellers, the first thing that comes to mind is either the New York Stock Exchange (NYSE) or Nasdaq, and theres no debate over why. These two exchanges account for the trading of a major portion of equities in North America and worldwide. At the same time, however, the NYSE and Nasdaq are very different in the way they operate and in the types of equities traded therein. Knowing these differences will help you better understand the function of a stock exchange and the mechanics behind the buying and selling of stocks.
Location, Location, Location
The location of an exchange refers not so much to its street address but the place where its transactions take place. On the NYSE, all trades occur in a physical place, on the trading floor in New York City. So, when you see those guys waving their hands on TV or ringing a bell before opening the exchange, you are seeing the people through whom stocks are transacted on the NYSE.
The Nasdaq, on the other hand, is located not on a physical trading floor but on a telecommunications network. People are not on a floor of the exchange matching buy and sell orders on behalf of investors. Instead, trading takes place directly between investors and their buyers or sellers, who are the market makers (whose role we discuss below in the next section), through an elaborate system of companies electronically connected to one another.
Dealer vs. Auction Market
The fundamental difference between the NYSE and Nasdaq is in the way securities on the exchanges are transacted between buyers and sellers. The Nasdaq is a dealers market, wherein market participants are not buying from and selling to one another directly but through a dealer, which, in the case of the Nasdaq, is a market maker . The NYSE is an auction market, wherein individuals are typically buying and selling between one another and there is an auction occurring; that is, the highest bidding price will be matched with the lowest asking price. (For more on different types of markets, see Markets Demystified.)
Traffic Control
Each stock market has its own traffic control police officer. Yup, thats right, just as a broken traffic light needs a person to control the flow of cars, each exchange requires people who are at the intersection where buyers and sellers meet, or place their orders. The traffic controllers of both exchanges deal with specific traffic problems and, in turn, make it possible for their markets to work. On the Nasdaq, the traffic controller is known as the market maker, who, we already mentioned, transacts with buyers and sellers to keep the flow of trading going. On the NYSE, the exchange traffic controller is known as the specialist, who is in charge of matching up buyers and sellers.
The definitions of the role of the market maker and that of the specialist are technically different; a market maker creates a market for a security, whereas a specialist merely facilitates it. However, the duty of both the market maker and specialist is to ensure smooth and orderly markets for clients. If too many orders get backed up, the traffic controllers of the exchanges will work to match the bidders with the askers to ensure the completion of as many orders as possible. If there is nobody willing to buy or sell, the market makers of the Nasdaq and the specialists of the NYSE will try to see if they can find buyers and sellers and even buy and sell from their own inventories.
Perception and Cost
One thing that we cant quantify but must acknowledge is the way in which the companies on each of these exchanges are generally perceived by investors. The Nasdaq is typically known as a high-tech market, attracting many of the firms dealing with the internet or electronics. Accordingly, the stocks on this exchange are considered to be more volatile and growth oriented. On the other hand, the companies on NYSE are perceived to be more well established. Its listings include many of the blue chip firms and industrials that were around before our parents, and its stocks are considered to be more stable and established.
Whether a stock trades on the Nasdaq or the NYSE is not necessarily a critical factor for investors when they are deciding on stocks to invest in. However, because both exchanges are perceived differently, the decision to list on a particular exchange is an important one for many companies. A companys decision to list on a particular exchange is affected also by the listing costs and requirements set by each individual exchange. The entry fee a company can expect to pay on the NYSE is up to $250,000 while on the Nasdaq, it is only $50,000-$75,000. Yearly listing fees are also a big factor: on the NYSE, they based on the number of shares of a listed security, and are capped at $500,000, while the Nasdaq fees come in at around $27,500. So we can understand why the growth-type stocks (companies with less initial capital) would be found on the Nasdaq exchange. (For further reading, see What are the listing requirements for the Nasdaq?)
Public vs. Private
Prior to March 8, 2006, the final major difference between these two exchanges was their type of ownership: the Nasdaq exchange was listed as a publicly-traded corporation, while the NYSE was private. This all changed in March 2006 when the NYSE went public after being a not-for-proft exchange for nearly 214 years. Most of the time, we think of the Nasdaq and NYSE as markets or exchanges, but these entities are both actual businesses providing a service to earn a profit for shareholders. The shares of these exchanges, like those of any public company, can be bought and sold by investors on an exchange. (Incidentally, both the Nasdaq and the NYSE trade on themselves.) As publicly traded companies, the Nasdaq and the NYSE must follow the standard filing requirements set out by the Securities and Exchange Commission. Now that the NYSE has become a publicly traded corporation, the differences between these two exchanges are starting to decrease, but the remaining differences should not affect how they function as marketplaces for equity traders and investors.
Conclusion
Both the NYSE and the Nasdaq markets accommodate the major portion of all equities trading in North America, but these exchanges are by no means the same. Although their differences may not affect your stock picks, your understanding of how these exchanges work will give you some insight into how trades are executed and how a market works.
Feast thine eyes upon $PSID BarChart Technical Analysis NITE-LYNX
http://www.barchart.com/technicals/stocks/PSID
In addition, some technical analysts include volume or open interest figures with their study of price action.
If the broker-dealer cannot, or chooses not to, execute the trade internally, they must attempt to execute the trade with another broker-dealer. This often means accessing the security on OTC Markets Group’s OTC Dealer application and ascertaining whether the order is marketable. Marketable orders are orders where the price specified can immediately be executed in the market. Market Orders are, by definition, marketable. Limit Orders are marketable if the limit price is better than or equal to the bid price (for sell orders) or ask price.
Easy-To-Understand ETFs
Do you ever feel like theres a building full of people whose sole duty is to make investing as difficult as possible? If youre frustrated with all of the different investment options, youre not alone. Fortunately, there are some exchange traded funds that didnt make it to that complicated building. If youre just getting started as an investor, consider these ETFs.
SPDR S
Feast thine eyes upon $HALB BarChart Technical Analysis NITE-LYNX
http://www.barchart.com/technicals/stocks/HALB
To trade OTC securities you must open an account with a brokerage firm that provides services in OTC securities. Investors may not buy or sell securities directly through OTC Markets. For more information on trading OTC Securities.
The price set by the market reflects the sum knowledge of all participants, and we are not dealing with lightweights here. These participants have considered (discounted) everything under the sun and settled on a price to buy or sell.
Diversifying Your Portfolio With Real Estate And Infrastructure
Real estate is undoubtedly a significant element of asset allocation, and should form a component of any institutional or personal investment portfolio. Also increasing in importance is infrastructure, which has similar advantages to real estate. Based on research at the University of Regensburg in Germany, this article will consider some of the main asset allocation issues in this context.
Both real estate and infrastructure constitute attractive investments for risk-averse investors, especially during bear markets. There are similarities and differences between the two, and you can construct a truly optimal portfolio by fully exploiting them. (For more on optimizing portfolios, see Achieving Optimal Asset Allocation.)
Diversification Through Real Estate and Infrastructure
The diversification benefits of direct and indirect real estate investments are well known, and diversifications role in institutional portfolios has been investigated extensively. The different correlations to those of stocks and bonds are extremely helpful for avoiding portfolio volatility.
In the U.S., there is a huge need to invest in and improve the infrastructure in many respects, so there is plenty of potential in the market. Pretty much all investors should take advantage of this potential to diversify more effectively than ever and in an extremely promising sector.
In the past, infrastructure has received relatively less attention, along with other alternative assets such as commodities and private equity. There has been a move away from the old-school conventional portfolios comprising equities, bonds, cash and real estate.
The allocation to real estate in particular could be affected if alternative investments significantly diversify returns from conventional investments. In fact, infrastructure has become a focus of attention and found its way into institutional portfolios, and to a lesser extent, private ones. (For more on asset allocation, see Five Things To Know About Asset Allocation.)
What makes infrastructure so appealing is that it seems quite similar to direct real estate in terms of big lot sizes and illiquidity, but also offers general stability and stable cash flows. The research on infrastructure lags behind that of real estate, and Tobias Dechant and Konrad Finkenzeller from Regensberg have attempted to bridge this gap.
Portfolio Optimization with Real Estate and Infrastructure
This research project, and earlier work in the field, demonstrates that direct infrastructure is an important element of portfolio diversification, and that firms tend to overallocate to real estate if they do not also invest in infrastructure. This is an important finding given that infrastructure is really helpful for risk-averse investors - especially in equity market downturns.
There is considerable variation in the recommended, relative amounts that should be invested in these two asset classes, The range extends from zero to as high as 70% (mainly in real estate), depending on the time frame, state of the markets and the methods used to derive the optimum.
The maximum total amount usually recommended for real estate and infrastructure allocations is about 25%, which is considerably higher than actual institutional allocations. It is important to note that efficient allocations in practice depend on numerous factors and parameters, and no specific mix proves to consistently superior. (For related reading, see Asset Allocation: The First Step Towards Profit.)
The blend of real estate and infrastructure is also controversial, but one study by Terhaar et al. (2003), for instance, suggests an even split. Some experts believe that about 5% is sufficient for each. In crisis periods, this can be three or even four times higher.
Another important finding is that real estate and infrastructure may be more useful in terms of diversification than through actual returns. Given the controversy on effective asset allocation and the turbulence in real estate markets, this is a major issue. The latter highlights the benefits of using not only real estate, but also infrastructure.
Also significant is the revelation that the targeted rate of return impacts on the appropriate level of real estate. Investors with higher portfolio return targets (who wish to earn more, but with more risk), may wish to devote less to real estate and infrastructure. This depends a lot on the state of these markets in relation to the equity markets in terms of whether the latter is in an upward or downward phase. (Asset allocation takes care of nearly 94% of your portfolios investment profile. For more, see Asset Allocation: One Decision To Rule Them All.)
The exact allocations to real estate and infrastructure depend on various parameters. Apart from the expected rate of portfolio return mentioned above, there is also the issue of how risk is defined. Other relevant factors include attitudes towards infrastructure in general, and how this relates to other alternative investments. In practice, these allocation decisions are complex, and higher or lower optima are therefore possible for different investors at different times.
Conclusions
If there is one thing that remains the top priority for all investors its having a well diversified portfolio. There is simply no substitute for this, but there is a lot of untapped potential in the market. Real estate investment, but also infrastructure, can play a vital role in optimizing portfolios. This mainly pertains to institutions, but also for private investors. Private investors can generally benefit from more diversification.
The firm has the authority to immediately sell any security in your account, without notice to you, to cover any shortfall resulting from a decline in the value of your securities. You may owe a substantial amount of money even after your securities are sold.
NITE-LYNX $BBDA BarChart Technical Analysis
http://www.barchart.com/technicals/stocks/BBDA
When reading these reports, it is important to take into consideration any biases a sell-side analyst may have. The buy-side analyst, on the other hand, is analyzing the company purely from an investment standpoint for a portfolio manager. If there is a relationship with the company, it is usually on different terms. In some cases this may be as a large shareholder.
Invest Like A Pro
For those investors who have been lucky enough to have survived one or more major market downturns, some lessons have been learned. For example, there always seem to be some firms that not only survive those downturns, but profit handsomely from them. So why do certaininvestment companies do better than others and survive market waves? They have a long term investment philosophy that they stick to; they have a strong investment strategy that they formalize within their products and understand that while taking some risk is part of the game; a steady disciplined approach ensures long-term success. Once the key tools of successful investment firms are understood, they can easily be adopted by individual investors to become successful. By adopting some of their strategies, you can invest like the pros.
Strength in Strategy
A strong investment philosophy should be outlined before any investment strategies are considered. An investment philosophy is the basis for investment policies and procedures, and ultimately into long-term plans. In a nutshell, an investment philosophy is a set of core beliefs from which all investment strategies are developed. In order for an investment philosophy to be sound, it needs to be based on reasonable expectations, assumptions of how historical information can serve as a tool for proper investment guidance .
For example, the investment philosophy, to beat the market every year, while a positive expectation, is too vague and does not incorporate sound principles. Its also important for a sound investment philosophy to define investment time horizons, asset classes in which to invest and guidance on how to respond to market volatility while adhering to your investment principles. A sound long-term investment philosophy also keeps successful firms on track with those guidelines, rather chasing trends and temptations. Since each investment philosophy is developed to suit the investment firm, or perhaps the individual investor , there are no standard plans to write one.
If you are developing an investment philosophy for the first time, and you want to invest like a pro, its important that you consider covering the following topics to make sure the philosophy is robust:
• Define Your Core Beliefs
The most basic and fundamental beliefs are outlined regarding the reason and purpose of investment decisions.
• Time Horizons
While investors should always plan on long-term horizons, a good philosophy should outline your unique time frame to set expectations.
• Risk
Clearly define how you accept and measure risk. Contrary to investing in a savings account, the fundamental rule of investing is the risk/reward concept by increasing your expected returns with increased risk.
• Asset Allocation and Diversification
Clearly define your core beliefs on asset allocation and diversification, whether it is active or passive, tactical or strategic, tightly focused or broadly diversified. This portion of your philosophy will be the driving force in developing your investment strategies and build a foundation to which to return when your strategies need redefining or tweaking.
The Secret of Success
Successful firms also implement product funds that reflect their investment philosophies and strategies. Since the philosophy drives the development of the strategies, core style investment strategies , for example, are usually the most common in most successful product lines and should also be part of an individual plan. Core holdings or strategies have multiple interpretations, but generally, core equity and bond strategies tend to be large cap, blue chip and investment grade types of funds that reflect the overall market.
Successful firms also limit their abilities to take large sector bets in their core products. While this can limit the potential upside when making the right sector bet, directional bets, practiced by hedge funds, add significant volatility to a fund that is judged by not only its performance but its relative and absolute volatility.
When defining an investment strategy , it is very important to follow a strict discipline. For example, when defining a core strategy, restricting the temptation to follow or chase trends keeps the strategy grounded. This is not to say that one cant have additional momentum strategies with different goals, as those can be incorporated into the overall investment plan.
Outlining a Strategy
When outlining a sound investment strategy, the following issues, which are similar to those of creating a philosophy, should be considered:
• Time Horizon
A common mistake for most individual investors is that their time horizon ends when they retire. In reality, it can go well beyond retirement, and even life, if you have been saving for the next generation. Investment strategies must focus on the long-term horizon of your investment career, as well as the time for specific investments .
• Asset Allocation
This is when you clearly define what your target allocation will be. If this is a tactical strategy, ranges of allocations should be defined, if strategic in nature, hard lines need to be drawn with specific plans to rebalance when markets have moved in either direction. Successful investment firms follow strict guidelines when rebalancing, especially is strategic plans. Individuals, on the other hand, often make the mistake of straying from their strategies when markets move in sharp directions.
• Risk vs. Return
At this point you should clearly define your risk tolerance. This is one of the most important aspects of an investment strategy, since risk and return have a close relationship over long periods of time. Whether you measure it in relative to a benchmark or absolute portfolio standard deviation, just remember to stick to your predetermined limits.
Putting the Pieces Together
Its important to remember that investment strategies define specific pieces of an overall plan. Successful investors cannot beat the market 100% of the time, but can evaluate their investment decisions based on their fit to the original investment strategy.
After you have survived a few market cycles, you can potentially start to see patterns of hot or popular investment companies gathering unprecedented gains. This was a phenomenon during the internet technology investing boom. Shares of technology companies rose to rock star levels, and investors - institutional and personal - lined up at their gates to pile on funds. Unfortunately for some of those companies, success was short-lived, since these extraordinary gains were unjustified. Many investors deviated from their initial investment strategies in the hopes of chasing greater returns. Individuals can pattern themselves after successful investment companies by not trying to hit home runs and focusing on base hits, instead.
That means trying to beat the market by long shots is not only difficult to do consistently, it leads to a level of volatility that does not sit well with investors over the long term. Individual investors often make mistakes like shooting for the stars and using too much leverage when markets are moving up, and tend to shy away from markets as they are falling. Removing the human biases by sticking to a set approach and focusing on short term victories is a great way to fashion your investment strategy like the pros.
Conclusion
Taking cues from successful professional investors is the easiest way to avoid common errors and keep on a focused track. Outlining a sound investment philosophy sets the stage for professional and individual investors, just like a strong foundation in a home. Building up from that foundation to form investment strategies creates strong directions, setting the paths to follow. Investing like the pros also means avoiding the temptation to drift from your investment philosophy and strategies, and trying to outperform by large margins. While this can be done occasionally, and some firms have done it in the past, it is nearly impossible to beat the markets by large margins consistently. If you can fashion your investment plans and goals like those successful investment companies, you to can invest like the pros.
Firms may also negotiate trades over the phone. While the same process and rules apply, the speed with which trades are executed is inherently slower than OTC Link.
$MMTIF BarChart Technical Analysis NITE-LYNX
http://www.barchart.com/technicals/stocks/MMTIF
10 Steps To Building A Winning Trading Plan
There is an old saying in business: Fail to plan and you plan to fail. It may sound glib, but those who are serious about being successful, including traders, should follow these eight words as if they were written in stone. Ask any trader who makes money on a consistent basis and they will tell you, You have two choices: you can either methodically follow a written plan, or fail.
If you have a written trading or investment plan, congratulations! You are in the minority. While it is still no absolute guarantee of success, you have eliminated one major roadblock. If your plan uses flawed techniques or lacks preparation, your success wont come immediately, but at least you are in a position to chart and modify your course. By documenting the process, you learn what works and how to avoid repeating costly mistakes.
Whether or not you have a plan now, here are some ideas to help with the process.
Disaster Avoidance 101
Trading is a business, so you have to treat it as such if you want to succeed. Reading some books, buying a charting program, opening a brokerage account and starting to trade are not a business plan - it is a recipe for disaster. If you dont follow a written trading plan, you court disaster every time you enter the market, says John Novak, an experienced trader and developer of the T-3 Fibs Protrader Program.
Once a trader knows where the market has the potential to pause or reverse, they must then determine which one it will be and act accordingly. A plan should be written in stone while you are trading, but subject to re-evaluation once the market has closed. It changes with market conditions and adjusts as the traders skill level improves. Each trader should write their own plan, taking into account personal trading styles and goals. Using someone elses plan does not reflect your trading characteristics. (To learn more, see Fibonacci And The Golden Ratio.)
Building the Perfect Master Plan
What are the components of a good trading plan? Here are 10 essentials that every plan should include:
Skill Assessment
Are you ready to trade? Have you tested your system by paper trading it and do you have confidence that it works? Can you follow your signals without hesitation? Trading in the markets is a battle of give and take. The real pros are prepared and they take their profits from the rest of the crowd who, lacking a plan, give their money away through costly mistakes.
Mental Preparation
How do you feel? Did you get a good nights sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off - otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hungover, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.
Set Risk Level
How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things arent going your way. (To learn more, see Matching Investing Risk Tolerance To Personality.)
Set Goals
Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a dollar loss per share, your goal should be a $3 profit. Set weekly, monthly and annual profit goals in dollars or as a percentage of your portfolio, and re-assess them regularly. (For more information, see Calculating Risk And Reward.)
Do Your Homework
Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the S
Line charts show less clutter, but do not offer as much detail (no high-low range).
How To Pick A Good Mutual Fund
Are you thinking about investing in a mutual fund, but arent sure how to go about it or which one is the most appropriate based on your needs? Youre not alone. However, what you may not know is that the selection process is much easier than you think.
Identifying Goals and Risk Tolerance
Before acquiring shares in any fund, an investor must first identify his or her goals and desires for the money being invested. Are long-term capital gains desired, or is a current income preferred? Will the money be used to pay for college expenses, or to supplement a retirement that is decades away? Identifying a goal is important because it will enable you to dramatically whittle down the list of the more than 8,000 mutual funds in the public domain .
In addition, investors must also consider the issue of risk tolerance. Is the investor able to afford and mentally accept dramatic swings in portfolio value? Or, is a more conservative investment warranted? Identifying risk tolerance is as important as identifying a goal. After all, what good is an investment if the investor has trouble sleeping at night?
Finally, the issue of time horizon must be addressed. Investors must think about how long they can afford to tie up their money, or if they anticipate any liquidity concerns in the near future. This is because mutual funds have sales charges and that can take a big bite out of an investors return over short periods of time. Ideally, mutual fund holders should have an investment horizon with at least five years or more.
Style and Fund Type
If the investor intends to use the money in the fund for a longer-term need and is willing to assume a fair amount of risk and volatility, then the style or objective he or she may be suited for is a long-term capital appreciation fund. These types of funds typically hold a high percentage of their assets in common stocks and are, therefore, considered to be volatile in nature. They also carry the potential for a large reward over time.
Conversely, if the investor is in need of current income, he or she should acquire shares in an income fund. Government and corporate debt are the two of the more common holdings in an income fund.
Of course, there are times when an investor has a longer-term need, but is unwilling or unable to assume substantial risk. In this case, a balanced fund, which invests in both stocks and bonds, may be the best alternative.
Charges and Fees
Mutual funds make their money by charging fees to the investor. It is important to gain an understanding of the different types of fees that you may face when purchasing an investment.
Some funds charge a sales fee known as a load fee, which will either be charged upon the initial investment or upon the sale of the investment. A front-end load fee is paid out of the initial investment made by the investor, while a back-end load fee is charged when an investor sells his or her investment, usually prior to a set time period, such as seven years from purchase.
Both front- and back-end loaded funds typically charge 3 to 6% of the total amount invested or distributed, but this number can be as much as 8.5% by law. Its purpose is to discourage turnover and to cover any administrative charges associated with the investment. Depending on the mutual fund , the fees may go to a broker for selling the mutual fund or to the fund itself, which may result in lower administration fees later on.
To avoid these sales fees, look for no-load funds, which dont charge a front- or back-end load fee. However, be aware of the other fees in a no-load fund, such as the management expense ratio and other administration fees, as they may be very high.
Other funds charge 12b-1 fees, which are baked into the share price and are used by the fund for promotions, sales and other activities related to the distribution of fund shares. These fees come right off of the reported share price at a predetermined point in time. As a result, investors may not be aware of the fee at all. The 12b-1 fees can, by law, be as much as 0.75% of a funds average assets per year.
One final tip when perusing mutual fund sales literature: The investor should look for the management expense ratio. In fact, that one number can help clear up any and all confusion as it relates to sales charges. The ratio is simply the total percentage of fund assets that are being charged to cover fund expenses. The higher the ratio, the lower the investors return will be at the end of the year.
Evaluating Managers and Past Results
As with all investments, investors should research a funds past results. To that end, the following is a list of questions that perspective investors should ask themselves when reviewing the historical record:
• Did the fund manager deliver results that were consistent with general market returns?
• Was the fund more volatile than the big indexes (meaning did its returns vary dramatically throughout the year)?
• Was there an unusually high turnover (which can result in larger tax liabilities for the investor)?
This information is important because it will give the investor insight into how the portfolio manager performs under certain conditions, as well as what historically has been the trend in terms of turnover and return.
With that in mind, past performance is no guarantee of future results. For this reason, prior to buying into a fund, it makes sense to review the investment companys literature to look for information about anticipated trends in the market in the years ahead. In most cases, a candid fund manager will give the investor some sense of the prospects for the fund and/or its holdings in the year(s) ahead as well as discuss general industry trends that may be helpful.
Size of the Fund
Typically, the size of a fund does not hinder its ability to meet its investment objectives. However, there are times when a fund can get too big. A perfect example is Fidelitys Magellan Fund. Back in 1999 the fund topped $100 billion in assets and it was forced to change its investment process to accommodate the large daily (money) inflows. Instead of being nimble and buying small- and mid-cap stocks, it shifted its focus primarily towards larger capitalization growth stocks. As a result, its performance suffered.
So how big is too big? There are no benchmarks that are set in stone, but that $100 billion mark certainly makes it difficult for a fund manager to acquire a position in a stock and dispose of it without dramatically running up the stock on the way up and depressing it on the way down. It also makes the process of buying and selling stocks with any kind of anonymity almost impossible.
The Bottom Line
Selecting a mutual fund may seem like a daunting task, but knowing your objectives and risk tolerance is half of the battle. If you follow this bit of due diligence before selecting a fund, you will increase your chances of success.
The close represents the final price agreed upon by the buyers and the sellers. In this case, the close is well below the high and much closer to the low.
The term "person associated with a broker or dealer" or "associated person of a broker or dealer" means any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), any person directly or indirectly controlling, controlled by, or under common control with such broker or dealer, or any employee of such broker or dealer, except that any person associated with a broker or dealer whose functions are solely clerical or ministerial shall not be included in the meaning of such term for purposes of section 15(b) (other than paragraph (6) thereof).
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Unlike other loans, like for a car or a home, that allow you to pay back a fixed amount every month, when you buy stocks on margin you can be faced with paying back the entire margin loan all at once if the price of the stock drops suddenly and dramatically.
General Steps to Fundamental Evaluation
Even though there is no one clear-cut method, a breakdown is presented below in the order an investor might proceed.
Pros And Cons Of Offshore Investing
Offshore investing is often demonized in the media, which paints a picture of investors stashing their money with some illegal company located on an obscure Caribbean island where the tax rate is next to nothing. While its true that there will always be instances of shady offshore deals, the vast majority of offshore investing is perfectly legal. In fact, depending on your situation, offshore investing may offer you many advantages.
What Is Offshore Investing?
Offshore investing refers to a wide range of investment strategies that capitalize on advantages offered outside of an investors home country. We will briefly touch on the advantages and disadvantages of offshore investing. The particulars are far beyond the scope of this introductory article.
There is no shortage of money-market, bond and equity assets offered by reputable offshore companies that are fiscally sound, time-tested and, most importantly, legal.
Advantages
There are several reasons why people invest offshore:
Tax Reduction - Many countries (known as tax havens) offer tax incentives to foreign investors. The favorable tax rates in an offshore country are designed to promote a healthy investment environment that attracts outside wealth. For a tiny country with very few resources and a small population, attracting investors can dramatically increase economic activity. Simply put, offshore investment occurs when offshore investors form a corporation in a foreign country. The corporation acts as a shell for the investors accounts, shielding them from the higher tax burden that would be incurred in their home country. Because the corporation does not engage in local operations, little or no tax is imposed on the offshore corporation. Many foreign companies also enjoy tax-exempt status when they invest in U.S. markets. As such, making investments through foreign corporations can hold a distinct advantage over making investments as an individual. (For additional information, read What is an Emerging Market Economy?)
In recent years, however, the U.S. government has become increasingly aware of the tax revenue lost to offshore investing, and has created more defined and restrictive laws that close tax loopholes. Investment revenue earned through offshore investment is now a focus of regulators and the tax man alike. According to the U.S. Internal Revenue Service (IRS), U.S. citizens and residents are now taxed on their worldwide income. As a result, investors who use offshore entities to evade U.S. federal income tax on capital gains can be prosecuted for tax evasion. Therefore, although the lower corporate expenses of offshore companies can translate into better gains for investors, the IRS maintains that U.S. taxpayers are not to be allowed to evade taxes by shifting their individual tax liability to some foreign entity. (To learn more, see How International Tax Rates Impact Your Investments.)
Asset Protection - Offshore centers are popular locations for restructuring ownership of assets. Through trusts, foundations or through an existing corporation individual wealth ownership can be transferred from people to other legal entities. Many individuals who are concerned about lawsuits, or lenders foreclosing on outstanding debts elect to transfer a portion of their assets from their personal estates to an entity that holds it outside of their home country. By making these on-paper ownership transfers, individuals are no longer susceptible to seizure or other domestic troubles. If the trustor is a U.S. resident, their trustor status allows them to make contributions to their offshore trust free ofincome tax. However, the trustor of an offshore asset-protection fund will still be taxed on the trusts income (the revenue made from investments under the trust entity), even if that income has not been distributed.
Confidentiality - Many offshore jurisdictions offer the complimentary benefit of secrecy legislation. These countries have enacted laws establishing strict corporate and banking confidentiality. If this confidentiality is breached, there are serious consequences for the offending party. An example of a breach of banking confidentiality is divulging customer identities; disclosing shareholders is a breach of corporate confidentiality in some jurisdictions. However, this secrecy doesnt mean that offshore investors are criminals with something to hide. Its also important to note that offshore laws will allow identity disclosure in clear instances of drug trafficking, money laundering or other illegal activities. From the point of view of a high-profile investor, however, keeping information, such as the investors identity, secret while accumulating shares of a public company can offer that investor a significant financial (and legal) advantage. High-profile investors dont like the public at large knowing what stocks theyre investing in. Multi-millionaire investors dont want a bunch of little fish buying the same stocks that they have targeted for large volume share purchases - the little guys run up the prices.
Because nations are not required to accept the laws of a foreign government, offshore jurisdictions are, in most cases, immune to the laws that may apply where the investor resides. U.S. courts can assert jurisdiction over any assets that are located within U.S. borders. Therefore, it is prudent to be sure that the assets an investor is attempting to protect not be held physically in the United States.
Diversification of Investment - In some countries, regulations restrict the international investment opportunities of citizens. Many investors feel that such restriction hinders the establishment of a truly diversified investment portfolio. Offshore accounts are much more flexible, giving investors unlimited access to international markets and to all major exchanges. On top of that, there are many opportunities in developing nations, especially in those that are beginning to privatize sectors that were formerly under government control. Chinas willingness to privatize some industries has investors drooling over the worlds largest consumer market. (To read more, see Investing Beyond Your Borders.)
Disadvantages
Tax Laws are Tightening - Tax agencies like the IRS arent ignorant of offshore strategies. Theyve clamped down on some traditional ways of tax avoidance. There are still loopholes, but most are shrinking more and more every year. In 2004, the IRS amended the Internal Revenue Code (IRC) and began to collect taxes from both American corporations that operate out of another country and American citizens and residents who earn money through offshore investments. (For more information on tax laws that affect offshore investors, see the IRS International Taxpayer - Expatriation Tax.)
Cost - Offshore Accounts are not cheap to set up. Depending on the individuals investment goals and the jurisdiction he or she chooses, an offshore corporation may need to be started. Setting up an offshore corporation may mean steep legal fees, corporate or account registration fees and in some cases investors are even required to own property (a residence) in the country in which they have an offshore account or operate a holding company. Furthermore many offshore accounts require minimum investments of between $100,000 and $1 million. Businesses that make money facilitating offshore investment know that their offerings are in high demand by the very wealthy and they charge accordingly.
How Safe Is Offshore Investing?
Popular offshore countries such as the Bahamas, Bermuda, Cayman Islands and Isle of Man are known to offer fairly secure investment opportunities. More than half of the worlds assets and investments are held in offshore jurisdictions and many well-recognized companies have investment opportunities in offshore locales. Still, like every investment you make, use common sense and choose a reputable investment firm. It is also a good idea to consult with an experienced and reputable investment advisor, accountant, and lawyer who specializes in international investment. If you are looking to protect your assets, or are concerned with estate planning or business succession, it would be prudent to find an attorney (or a team of attorneys) specializing in asset protection, wills or business succession. Of course, these professionals come at a cost. In most cases the benefits of offshore investing are outweighed by the tremendous costs of professional fees, commissions, travel expenses and downside risk. (For more information, see Investment Scams: Prime Banks.)
Conclusion
We are not lawyers, tax accountants or offshore investment experts in any country. Every individuals situation is different. Offshore investment is beyond the means of most investors, and above the risk tolerance of others.
Despite the many pitfalls of offshore investing, it can still pay off to shift some investment assets from one jurisdiction to another. As with even the most insignificant investment, do your research before parting with your money - unless youre prepared to lose it.
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Minimum Quotation Size Requirements for OTC Equity Securities (FINRA Rule 6433) – FINRA members acting as market makers by submitting quotations into an inter-dealer quotation system must adhere to the minimum size requirements set by FINRA. For example, all quotations with a price less than or equal to $.50 must have a minimum size of 5,000 shares.
After each bounce off support, the stock traded all the way up to resistance. Resistance was first established by the September support break at 42.5.
Understanding The Income Statement
The income statement is one of the three financial statements - the other two are the balance sheet and cash flow statement - with which stock investors need to become familiar. The purpose of this article is to provide the less-experienced investor with an understanding of the components of the income statement in order to simplify investment analysis and make it easier to apply it to your own investment decisions.
In the context of corporate financial reporting, the income statement summarizes a companys revenues (sales) and expenses quarterly and annually for its fiscal year. The final net figure, as well as various others in this statement, are of major interest to the investment community. (To learn more about reading financial statements, see What You Need To Know About Financial Statements, Footnotes: Start Reading The Fine Print and Introduction To Fundamental Analysis.)
General Terminology and Format Clarifications
Income statements come with various monikers. The most commonly used are statement of income, statement of earnings, statement of operations and statement of operating results. Many professionals still use the term P
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Investor-focused companies may use either the OTCQX requirements, SEC Reporting or OTC Markets Alternative Reporting Standard to provide transparency to individual investors and the professional investment community. These services increase the flow of information, raise the profile of OTC companies, improve price discovery, and increase trading and liquidity in the OTC market.
The above chart for Halliburton (HAL)[HAL] shows a large trading range between Dec-99 and Mar-00.
Five Things To Know About Asset Allocation
With literally thousands of stocks, bonds and mutual funds to choose from, picking the right investments can confuse even the most seasoned investor. However, starting to build a portfolio with stock picking might be the wrong approach. Instead, you should start by deciding what mix of stocks, bonds and mutual funds you want to hold - this is referred to as your asset allocation.
What is Asset Allocation?
Asset allocation is an investment portfolio technique that aims to balance risk and create diversification by dividing assets among major categories such as cash, bonds, stocks, real estate and derivatives. Each asset class has different levels of return and risk, so each will behave differently over time. For instance, while one asset category increases in value, another may be decreasing or not increasing as much. Some critics see this balance as a settlement for mediocrity, but for most investors its the best protection against major loss should things ever go amiss in one investment class or sub-class.
The consensus among most financial professionals is that asset allocation is one of the most important decisions that investors make. In other words, your selection of stocks or bonds is secondary to the way you allocate your assets to high and low-risk stocks, to short and long-term bonds, and to cash on the sidelines.
We must emphasize that there is no simple formula that can find the right asset allocation for every individual - if there were, we certainly wouldnt be able to explain it in one article. We can, however, outline five points that we feel are important when thinking about asset allocation:
Risk vs. Return
The risk-return tradeoff is at the core of what asset allocation is all about. Its easy for everyone to say that they want the highest possible return, but simply choosing the assets with the highest potential (stocks and derivatives) isnt the answer. The crashes of 1929, 1981, 1987, and the more recent declines of 2000-2002 are all examples of times when investing in only stocks with the highest potential return was not the most prudent plan of action. Its time to face the truth: every year your returns are going to be beaten by another investor, mutual fund, pension plan, etc. What separates greedy and return-hungry investors from successful ones is the ability to weigh the difference between risk and return. Yes, investors with a higher risk tolerance should allocate more money into stocks. But if you cant keep invested through the short-term fluctuations of a bear market, you should cut your exposure to equities. (To learn more about bond investing , see Bond Basics Tutorial.
Dont Rely Solely on Financial Software or Planner Sheets
Financial planning software and survey sheets designed by financial advisors or investment firms can be beneficial, but never rely solely on software or some pre-determined plan. For example, one rule of thumb that many advisors use to determine the proportion a person should allocate to stocks is to subtract the persons age from 100. In other words, if youre 35, you should put 65% of your money into stock and the remaining 35% into bonds, real estate and cash.
But standard worksheets sometimes dont take into account other important information such as whether or not you are a parent, retiree or spouse. Other times, these worksheets are based on a set of simple questions that dont capture your financial goals. Remember, financial institutions love to peg you into a standard plan not because its best for you, but because its easy for them. Rules of thumb and planner sheets can give people a rough guideline, but dont get boxed into what they tell you.
Determine your Long and Short-Term Goals
We all have our goals. Whether you aspire to own a yacht or vacation home, to pay for your childs education, or simply to save up for a new car , you should consider it in your asset allocation plan. All of these goals need to be considered when determining the right mix.
For example, if youre planning to own a retirement condo on the beach in 20 years, you need not worry about short-term fluctuations in the stock market . But if you have a child who will be entering college in five to six years, you may need to tilt your asset allocation to safer fixed-income investments.
Time is your Best Friend
The U.S. Department of Labor has said that for every 10 years you delay saving for retirement (or some other long-term goal), you will have to save three times as much each month to catch up. Having time not only allows you to take advantage of compounding and the time value of money, it also means you can put more of your portfolio into higher risk/return investments, namely stocks. A bad couple of years in the stock market will likely show up as nothing more than an insignificant blip 30 years from now.
Just Do It!
Once youve determined the right mix of stocks, bonds and other investments, its time to implement it. The first step is to find out how your current portfolio breaks down. Its fairly straightforward to see the percentage of assets in stocks vs. bonds, but dont forget to categorize what type of stocks you own (small, mid, or large cap). You should also categorize your bonds according to their maturity (short, mid, long-term). Mutual funds can be more problematic. Fund names dont always tell the entire story. You have to dig deeper in the prospectus to figure out where fund assets are invested.
There is no one standardized solution for allocating your assets. Individual investors require individual solutions. Furthermore, if a long-term horizon is something you dont have, dont worry. Its never too late to get started. Its also never too late to give your existing portfolio a face-lift: asset allocation is not a one-time event, its a life-long process of progression and fine-tuning.
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The margin account agreement generally provides that the securities in your margin account may be lent out by the brokerage firm at any time without notice or compensation to you. The firm's lending of securities does not affect the value of your account.
All three of these advances would appear as the same vertical distance on a logarithmic scale. Most charting programs refer to the logarithmic scale as a semi-log scale, because the time axis is still displayed arithmetically.
The chart above uses the 4th-Quarter performance of VeriSign to illustrate the difference in scaling. On the semi-log scale, the distance between 50 and 100 is the same as the distance between 100 and 200. However, on the arithmetic scale, the distance between 100 and 200 is significantly greater than the distance between 50 and 100.
Trade Smarter With Equivalent Positions
How can two trades have the same risk and reward when they look so very different?
Thats the frequent response when investors first learn that every option position is equivalent to a different option position. For clarification, equivalent refers to the fact that the positions will earn/lose the same amount at any price (when expiration arrives) for the underlying stock. It does not mean the positions are identical.
Of all the ideas that a rookie options trader encounters, the idea of equivalence is a real eye-opener. Those who grasp the significance of this concept have an increased chance of succeeding as a trader. (For a background reading, see our Options Basics Tutorial.)
Different but Equal
Lets begin with an example, and then well discuss why equivalent positions exist and how you can use them to your advantage. And it is an advantage. Sometimes you discover that theres an extra $5 or $10 to be earned by making the equivalent trade . At other times, the equivalent saves money on commissions.
There are two commonly used trading strategies that are equivalent to each other. But you would never know it by the way stock brokers handle these positions. Im referring to writing covered calls and selling naked puts. (For more, readUnderstanding Option Pricing.)
These two positions are equivalent:
1. Buy 300 shares of QZZ
Sell 3 QZZ Aug 40 calls
2. Sell 3 QZZ Aug 40 puts
What happens when expiration arrives for each of these positions?
Buying the Covered Call:
• If QZZ is above 40, the call owner exercises the options, your shares are sold at $40 per share, and you have no remaining position.
•
If QZZ is below 40, the options expire worthless and you own 300 shares
Selling the Naked Puts:
• If QZZ is above 40, the puts expire worthless and you have no remaining position.
•
If QZZ is below 40, the put owner exercises the options and you are obligated to purchase 300 shares at $40 per share. You own 300 shares.
Trade Conclusion
After expiration, your position is identical. For those who are concerned with details (and option traders must be concerned) the question arises as to what happens when the stocks final trade at expiration is 40. The answer is that you have two choices:
1. Do Nothing
You can do nothing and wait to see whether the option owner allows the calls to expire worthless or decides to exercise. This places the decision in the hands of someone else.
2. Repurchase the Options
Before the market closes for trading on expiration Friday, you can repurchase the options you sold. Once you do that, you can no longer be assigned an exercise notice. The goal is to buy those options for as little as possible, and I suggest bidding 5 cents for those options. You may want to be more aggressive and raise the bid to 10 cents, but that should not be necessary if the stock is truly trading at the strike price as the closing bell rings.
If you do buy back the options sold earlier, you may write new options expiring in a later month. This is a common practice, but its a separate trade decision.
The positions are equivalent after expiration. But does that show that the profit/loss is always equivalent? No, it doesnt. But the truth is that options are almost always efficiently priced. When priced inefficiently, professional arbitrageurs arrive on the scene and trade to take the free money offered. This is not a trading idea for you. Instead, its a reassurance that you will not find options mispriced too often. The available profit from these arbitrage opportunities is very limited, but the arbs are willing to take the time and effort to frequently earn those few pennies per share. (Read Arbitrage Squeezes Profit From Market Inefficiency.)
Proof
To determine if one position is equivalent to another, all you need to know is this simple equation:
S = C – P
This equation defines the relationship between stocks (S), calls (C) and puts (P). Being long 100 shares of stock is equivalent to owning one call option and selling one put option when those options are on the same underlying and the options have the same strike price and expiration date.
The equation can be rearranged to solve for C or P as follows:
C = S P
P = C - S
This gives us two more equivalent positions:
1. A call option is equivalent to a long stock plus a long put (this is often called a married put).
2. A put option is equivalent to a long call plus a short stock .
From the last equation, if we change the signs of each attribute, we get:
-P = S – C, or a short put equals a covered call
As long as you are cash-secured, meaning you have enough cash in your account to buy the shares if you are assigned an exercise notice, there are two very practical reasons for selling a naked put:
1. Reduced Commissions
The naked put is a single trade. The covered call requires that you buy stock and sell a call. Thats two trades.
• Exiting the Trade Prior to Expiration
Sometimes the spread turns into a quick winner when the stock rallies way above the strike price. Its often easy to close the position and take your profit easily when you sold the put. All you must do is buy that put at a very low price, such as 5 cents. With the covered call, buy the deep-in-the-money call options. Those usually have a very wide market and there is almost no chance to buy that call at a good price (and then quickly sell the stock). Thus, the strategic edge belongs to the put seller, not the covered call writer.
• Other Equivalent Positions
These positions are equivalent only when the options have the same strike price and expiration date.
Selling a put spread is equivalent to buying a call spread, so:
• Sell ZXQ Oct 50/60 Put Spread = Buy ZYQ Oct 50/60 Call Spread
Selling a call spread is equivalent to buying a put spread, so:
• Sell JJK Dec 15/20 Call Spread = Buy JJK Dec 15/20 Put Spread
Selling put spread is equivalent to a buying collar. so:
• Sell XYZ Nov 80/85 Put Spread = Buy 100 XYZ; Buy one Nov 80 put; Sell one Nov 85 call
To convert a call into a put, just sell stock (because C - S = P)
To convert a put into a call, just buy stock (because P S = C)
The Bottom Line
There are other equivalent positions. In fact, by using the basic equation (S = C – P) you can find an equivalent for any position. From a practical perspective, the more complex the equivalent position, the less easily it can be traded. The idea behind understanding that some positions are equivalent to others is that it may help your trading become more efficient . As you gain experience, you will find it takes very little effort to recognize when an equivalent is beneficial. It just takes a little practice thinking in terms of equivalents.
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The Random Walk theory is an example of the semi-strong form of market efficiency.
OTC Pink is an open marketplace that has no financial standards or reporting requirements. The stock of companies in the OTC Pink tier are not required to be registered with the SEC. Companies in this category are further categorized by the level and timeliness of information they provide to investors and may have current, limited or no public disclosure.
Savings Accounts Not Always The Best Place For Cash Assets
Individuals and entities can find themselves holding cash for any number of reasons: general savings, specific savings for planned expenditures, asset sales, and more. Most people would agree that they would like to maximize their cash assets, but many people assume that a savings account at a bank is the only way to go. As you will see, there are other ways to maximize your cash assets over the short term. If you are an independent-minded investor, read on to uncover two very attractive options for achieving this end: the premium brokerage account and the direct mutual fund account.
Assumptions
There are two assumptions that should be made plain with regards to this discussion. First, the short-term nature of cash demands a very low risk exposure or, stated in a different manner, a high degree of price certainty. Specifically, this article will not advocate the comparison of checking account funds to longer-term instruments such as equity mutual funds because the value of equity mutual fund shares can often vary on a daily basis. This is not an apt comparison because a return-maximizing investor seeking to conduct an everyday transaction (i.e. buying groceries) must be certain that his or her short-term cash has not been reduced by yesterdays stock market sell-off.
Second, cash-like funds should be accessible in a reasonable time frame without a penalty. Thus, certificates of deposit (CDs) and the like are not a viable option in this regard. Although CDs are generally considered to be short-terminvestments , they cannot be turned into transactional money without the issuer assessing a penalty that destroys the investors return.
What is disintermediation?
Before exploring the actual instruments, it is important to understand the differences between financial intermediation and disintermediation.
Anyone with a checking/demand deposit or savings account uses the services of a financial intermediary (a bank). The bank, acting as a middleman, combines the small deposits of many and goes to the primary and/or secondary security markets to purchase larger denominated short-term interest bearing instruments (i.e. Treasury bills). The bank then promises to pay the depositor a stated interest rate for the funds, subject to periodic adjustment, and collects the difference.
Disintermediation, on the other hand, occurs when the depositor goes directly to the primary or secondary market to purchase short-term interest bearing instruments. The fact that a depositor uses a mutual fund arrangement to accomplish this does not change the fact that this is a direct method of investing. Under the mutual fund arrangement, shareholders collect the market interest rate minus a management fee paid to the mutual fund manager .
There are two important distinctions between using the bank and the direct method. The first difference is the existence of government-sponsored account insurance; banks are part of the Federal Deposit Insurance Corporation (FDIC) system of deposit insurance, while the direct method is subject to the many market risks and is not insured. However, if one establishes a direct account through a brokerage firm, that account may be covered by the Securities Investor Protection Corporation (SIPC), which provides limited protection against investment losses as a result of certain broker-related actions Second, money market funds are regulated under the Investment Company Act of 1940 and are sold by prospectus only.
The Premium Brokerage Account
Most brokers offer several levels of brokerage accounts. Virtually every brokerage account comes embedded with a money market mutual fund account . These funds are invested in short-term fixed income securities via mutual funds shares. The underlying instruments used by bank and direct participants are often identical; the difference is that the direct method funnels all of the interest of those underlying securities to the mutual fund shareholder minus a management fee (approximately 50 basis points). This can be a yield of several hundred basis points compared to what banks may offer on similar accounts. Factors affecting the realized difference in interest rates include the banks desire to attract funds and the prevailing market environment.
Both regular and premium accounts have the ability to hold marketable securities and money market mutual fund shares, but premium brokerage accounts stand apart from regular brokerage accounts primarily in terms of access to funds and additional features. Premium accounts may offer check-writing capabilities and debit card access to funds, allowing continuous access to funds as needed. This maximizes interest earned when funds are not needed. Furthermore, it is possible that the premium account arrangement could simplify the investors monthly statement routine through elimination and consolidation of accounts.
The Direct Mutual Fund Account
The second option for maximizing interest is the use of a fund-direct money-market mutual fund account. Most mutual fund companies offer and manage a money market mutual fund. Again, this is a direct investment in money market instruments by way of mutual fund shares. Oftentimes, both the interest rate received and the management fee charged on these funds will be approximately equal to those earned on the premium account established at a brokerage house.
The key distinction between these two options is the availability of the funds and the mechanics of moving funds. Fund-direct mutual fund account funds are not available on demand, but funds are available to be sold and transferred on non-holiday business days throughout the year. Generally, mutual fund shares require a one business day settlement period. Once settled, the funds can be dispersed via a physical check or automated clearing house (ACH) deposit directly into a checking or savings account. This is still a very attractive option considering the interest rate earned and the expectation of having liquid funds available within a few days.
Additional Considerations
There are nuances between the offerings of competing companies for both of the above products. With that in mind, an investor should be prepared to critically view the benefits and drawbacks to any one firms offering with regards to the premium brokerage account. Investors should also pay attention to the return generated on money market funds (tax-free interest funds may also be available); specifically, the net expected performance must exceed that of your next best option. The investor should analyze his or her expected balance level in relation to savings
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Knowing Who's Who
Stocks move as a group. By understanding a company's business, investors can better position themselves to categorize stocks within their relevant industry group.
Short selling carries with it unlimited risk because the purchase price of a security can rise to any price point. Conversely, long investors (buyers) may only lose the amount invested – if, for example, the security price drops to zero.
Test Your Money Personality
Like almost everything else in life, your response to money is largely dictated by your personality. But have you given much thought to how you behave in regard to your finances and how that behavior affects your bottom line? Understanding your money personality is the first step and will help you shape your approach to spending, saving and investing. So whats your money personality? Read on to find out.
Whats Your Type?
Money personalities have been analyzed in a variety of ways and many people can identify with aspects of several profiles. They key is to find the profile that most closely matches your behavior. The major profiles are: big spenders, savers, shoppers, debtors and investors.
• Big Spenders
Big spenders love nice cars, new gadgets and brand-name clothing. Big spenders arent bargain shoppers; they are fashionable and they are looking to make a statement. This often means a desire to have the smallest cell phone, the biggest plasma TV and a beautiful home. When it comes to keeping up the Joneses, big spenders are the Joneses. They are comfortable spending money, dont fear debt and often take big risks when investing.
• Savers
Savers are the exact opposite of big spenders. They turn off the lights when leaving the room, close the refrigerator door quickly to keep in the cold, shop only when necessary, and rarely make purchases with credit cards. They generally have no debts and are often viewed as cheapskates. Savers are not concerned about following the latest trends, and they derive more satisfaction from reading the interest on a bank statement than from acquiring something new. Savers are conservative by nature and dont take big risks with their investments .
• Shoppers
Shoppers derive great emotional satisfaction from spending money. They often cant resist spending money, even if its to purchase items they dont need. Shoppers are usually aware of their addiction to spending and are even concerned about the debt that it creates. They look for bargains and are pleased when they get a good deal. Shoppers will often shop to entertain themselves, even if the items they buy go unused.
Shoppers are an eclectic bunch when it comes to investing. Some invest on a regular basis through 401(k) plans and other automatic investments and may even invest a portion of any sudden windfalls such as bonuses or inheritance money, while others view investing as something they will get to later on. (To learn more, read Seven Common Financial Mistakes.)
• Debtors
Debtors arent trying to make a statement with their expenditures, and they dont shop to entertain or cheer themselves up. They simply dont spend much time thinking about their money and therefore dont keep tabs on what they spend and where they spend it. Debtors generally spend more than they earn and are deeply in debt and they dont put much thought into investing. Similarly, they often fail to even take advantage of the company match in their 401(k) plans . (For more, check out Digging Out Of Personal Debt.)
• Investors
Investors are consciously aware of money. They understand their financial situations and try to put their money to work. Regardless of their current financial standing, investors tend to seek a day when passive investments will provide sufficient income to cover all of their bills. Their actions are driven by careful decision making, and their investments reflect the need to take a certain amount of risk in pursuit of their goals. (To learn more about how investors think, read The Successful Investment Journey.)
Advice for Your Personality
Once you recognize yourself in one of these profiles and have put some thought into how you approach money, its time to see what you can do to make the most of what you have. Sometimes making just small changes can yield big results.
• Spenders: Shop a Little Less, Save a Little More
If you love to spend, you are going to keep doing it, but you should seek long-term value, not just short-term satisfaction. Before you splurge on something expensive or trendy, ask yourself how much that purchase is going to mean to you in a year. If the answer is not much, skip the purchase. In this way, you can try to limit your spending to things youll actually use.
When you channel your energy into saving, you have another opportunity to think long term. Look for slow and steady gains as opposed to high-risk, quick-win scenarios. If you really want to challenge yourself, consider the merits of scaling back. (Downsize Your Home To Downsize Expenses and The Disposable Society: An Expensive Place To Live.)
• Savers: Use Moderation
Ben Franklin once recommended moderation in all things. For a saver, this is particularly good advice. Dont let all of the fun parts of life pass you by just to save a few pennies.
Tune up your savings efforts too. Pinching pennies is not enough. While minimizing risk is any investors prime goal, minimizing risk while maximizing return is the key to investing success. (For more on how to do this in your portfolio, read Asset Allocation Strategies and Achieving Optimal Asset Allocation.)
• Shoppers: Dont Spend Money You Dont Have
A critical step for shoppers is to take control of their credit cards. Unchecked credit card interest can wreak havoc on your finances , so think before you spend - particularly if you need a credit card to make the purchase. (To learn more, read Take Control Of Your Credit Cards and Understanding Credit Card Interest.)
Try to focus your efforts on saving your money. Learn the philosophy behind successful savings plans and try to incorporate some of those philosophies into your own. If spending is something you use to compensate for other areas of your life that you feel are lacking, think about what these might be and work on changing them.
• Debtors: Start Investing
If you are a debtor, you need to get your finances in order and set up a plan to start investing. You may not be able to do it alone, so getting some help is probably a good idea. Deciding on who will guide your investments is an important choice, so choose any investment professional carefully. (To find out more, see Invest In Spite Of Debt.)
• Investors: Keep Up the Good Work
Congratulations! Financially speaking, you are doing great! Keep doing what you are doing, and continue to educate yourself. (To see if you are on track to achieve post-work bliss, read A Pre-Retirement Checkup.)
Knowledge is Power
While you may not be able to change your personality, you can acknowledge it and address the challenges that it presents. Managing your money involves self awareness; knowing where you stand will allow you to modify your behavior to achieve your desired outcome.
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