Figuring out the value of a stock or bond is a pretty straightforward problem. For stocks, the price of the shares is directly tied to the underlying value of the company. Successful companies that project strong forward sales growth will be rewarded with a high valuation and rising share prices. For companies bogged down […]
With a temporary shutdown of a large portion of the United States economy and high unemployment, the stock market continues to rise. Things are confusing, and lots of people are blaming the Federal Reserve. For many, it’s easy to ignore the Fed-related hysteria because those yelling the loudest are the same folks trying to […]
Many novice options traders are initially confused by the difference between the options on cash indices like SPX and the options traded on stocks and ETFs like AAPL or SPY. After all, you can’t trade indices like SPX on the stock market. It’s just an index! So let’s settle a few differences. Firstly, why […]
The ability to detect a trading signal above the noisy day-to-day gyrations of the market is crucial for anyone who seeks to become a trader. Buy and hold investors only make money when the market goes up, but when you have a long timeframe, the averages work in your favor. But traders have to […]
High probability trading strategies are a good starting point but you must also consider some other important metrics to help maximize your profitability. “My best trader makes money only 63% of the time. Most traders make money only in the 50% to 55% range. That means you’re going to be wrong a lot. If […]
What Happens When a Company Gets Delisted? Delisting is a financial term describing a process where shares of a public company are actively removed from the exchange on which they had been trading. Sometimes the stocks disappear completely, but other times they don’t. Depending on the reason for the delisting, shares may continue to trade. However, […]
What Are Stock Options? Isn’t it nice having options? If you’re hungry, you have a wide variety of restaurants to choose from. If you want to buy a car, you have different makers producing different models with an endless array of upgrades. It’s true that too many choices can sometimes cause paralysis by analysis, […]
Most people associate “insider trading” with secret tips and federal agents busting into a dirty hedge fund like Showtime’s Billions. That’s insider trading based on material non-public information (MNPI). We will cover the illegal side briefly, but today’s article is mainly about the legal open market activities of company insiders. When an “insider” of […]
If you have noticed that the number of option contracts you own on a stock that has recently split has changed, don’t panic. When a stock splits, due to a corporate action, several components of an option contract can change to make you whole. Recently both Apple and Tesla announced stock splits which have […]
Failing to prepare is preparing to fail . . . Building a watchlist of tickers that you’re interested in trading for the day is an essential part of a profitable trading process. A watchlist is simply a short-list of stocks that meet or might meet your criteria for a profitable trading setup. While your […]
