• Showing 1-50 of 78 items
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  1. Investing

    What does it mean when financial news reports say that more ...

    This simply means that in a market, more stocks (issues) traded down for the day compared to the number of companies that traded up for the day.When a stock or issue is considered to be bought it must ...
  2. Investing

    Why would a company make drastic cuts to its dividend payments?

    A dividend cut occurs when a dividend paying company either completely stops paying out dividends (a worst-case scenario) or reduces the amount it pays out. This will often lead to a sharp decline in the ...
  3. Investing Basics

    Start Investing With Only $1,000

    Find out what fees and restrictions need to be considered before investing $1,000.
  4. Options & Futures

    Having A Plan: The Basis Of Success

    It ensures that you have a realistic outlook, and a solid strategy. We show you why and how.
  5. Investing

    Who is responsible for protecting and managing shareholders' ...

    The average shareholder, who is typically not involved in the day-to-day operations of the company, relies on several parties to protect and further his or her interests. These parties include the company's ...
  6. Investing

    How is the value of the S&P 500 calculated?

    The S&P 500 is a U.S. market index that gives investors an idea of the overall movement in the U.S. equity market. The value of the S&P 500 constantly changes based on the movement of 500 underlying ...
  7. Retirement

    Should I put money into a retirement account even if it ...

    One of the biggest and most often-touted advantages of putting money into a retirement account is the tax savings that come from income deferral. There is no doubt that this is a major benefit, but it ...
  8. Investing

    Who are the key players in the bond market?

    The bond market can essentially be broken down into three main groups: issuers, underwriters and purchasers. The issuers sell bonds or other debt instruments in the bond market to fund the operations of ...
  9. Investing

    If I pay for a course to learn about trading can I write ...

    There are some investing costs that can be written off each year, even if you aren't a day trader. The general rule in determining whether an investment expense is deductible is that the expense needs ...
  10. Investing

    Is it true that you can sell your home and not pay capital ...

    It is true in most cases. When you sell your home, the capital gains on the sale are exempt from capital gains tax. Based on the Taxpayer Relief Act of 1997, if you are single, you will pay no capital ...
  11. Investing

    What does it mean when a bond has a put option?

    A put option on a bond is a provision that allows the holder of the bond the right to force the issuer to pay back the principal on the bond. A put option gives the bond holder the ability to receive the ...
  12. Active Trading Fundamentals

    How do stock splits affect short sellers?

    The simple answer to this question is that stock splits do not affect short sellers in a material way. There are some changes that occur as a result of a split that do affect the short position, but they ...
  13. Investing

    How does privatization affect a company's shareholders?

    The most recognized transition between the private and public markets is an initial public offering (IPO). Through an IPO, a private company "goes public" by issuing shares, which transfer a portion of ...
  14. Active Trading Fundamentals

    How can you lose more money than you invest shorting a stock? ...

    The simple answer to this question is that there is no limit to the amount of money you can lose in a short sale. This means that you can lose more than the original amount you received at the beginning ...
  15. Investing

    What is the relationship between oil prices and inflation?

    The price of oil and inflation are often seen as being connected in a cause and effect relationship. As oil prices move up or down, inflation follows in the same direction. The reason why this happens ...
  16. Investing

    What is relative strength?

    Relative strength is a measure of the price trend of a stock or other financial instrument compared to another stock, instrument or industry. It is calculated by taking the price of one asset and dividing ...
  17. Active Trading Fundamentals

    Why do you need a margin account to short sell stocks?

    The reason that margin accounts and only margin accounts can be used to short sell stocks has to do with Regulation T, a rule instituted by the Federal Reserve Board. This rule is motivated by the nature ...
  18. Investing

    What are the components of the risk premium for investments?

    The risk premium is the excess return above the risk-free rate that investors require as compensation for the higher uncertainty associated with risky assets. The five main risks that comprise the risk ...
  19. Investing

    Does issuing preferred shares offer a tax advantage for ...

    There is no direct tax advantage to the issuing of preferred shares when compared to other forms of financing such as common shares or debt. The reason for this is that preferred shares, which are a form ...
  20. Trading Strategies

    Where can I find information about pre- and after-hours ...

    The stock market, particularly the NYSE and Nasdaq, is traditionally open between 9:30am and 4pm EST. Over time, with the adoption of new technology and increases in demand for trading, these hours have ...
  21. Investing

    How does a credit crunch occur?

    A credit crunch occurs when there is a lack of funds available in the credit market, making it difficult for borrowers to obtain financing. This happens when lenders have limited funds available to lend ...
  22. Investing

    What is the short/current long-term debt account on a company's ...

    A lot of confusion can arise with this balance sheet account. After all, how can something be both long and short? Despite appearances, however, this concept is not as complex as one might first think. ...
  23. Investing

    What is a basis point (BPS)?

    A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0. ...
  24. Investing

    How does the marginal tax rate system work?

    The marginal tax rate is the rate of tax that income earners incur on each additional dollar of income. As the marginal tax rate increases, the taxpayer ends up with less money per dollar earned than he ...
  25. Investing

    What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. In most cases, the potential buyer goes to the bank and takes out a mortgage ...
  26. Options & Futures

    What happens to my call options if the underlying company ...

    Typically, the announcement of a buyout offer by another company is a good thing for shareholders in the company that is being purchased. This is because the offer is generally at a premium to the market ...
  27. Trading Strategies

    How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in time. While this is similar to an option, where the holder has the right to purchase ...
  28. Active Trading Fundamentals

    If I short sell $5,000 worth of stock and the stock becomes ...

    The simple answer is that the maximum return of any short sale investment is in fact 100%. However, the concepts underlying short selling - the borrowing of shares and the liability it forms, how returns ...
  29. Active Trading Fundamentals

    What are the minimum margin requirements for a short sale ...

    In a short sale transaction, the investor borrows shares and sells them on the market in the hope that the share price will decrease and he or she will be able to buy them back at a lower price. The proceeds ...
  30. Credit & Loans

    How is my credit score calculated?

    The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. This is not the only way to get a credit score, but the FICO score is the measure that ...
  31. Investing

    Why do all mutual fund tickers have an X at the end?

    It's true that all mutual funds' tickers have an X at the end of their symbol. The reason for this is to distinguish between mutual fund tickers and other securities that also have ticker symbols (such ...
  32. Active Trading Fundamentals

    When short selling a stock, how long does a short seller ...

    There are no general rules regarding how long a short sale can last before being closed out. A short sale is a transaction in which shares of a company are borrowed by an investor and sold on the market. ...
  33. Investing

    What are the risks of investing in a bond?

    The most well-known risk in the bond market is interest rate risk - the risk that bond prices will fall as interest rates rise. By buying a bond, the bondholder has committed to receiving a fixed rate ...
  34. Investing

    What is the difference between an industry and a sector?

    The terms industry and sector are often used interchangeably to describe a group of companies that operate in the same segment of the economy or share a similar business type. Although the terms are commonly ...
  35. Investing

    Why do low interest rates cause investors to shy away from ...

    The lower rates that are found on bonds, especially government-backed bonds, are often not seen as enough by investors. This is the main driving force behind investors not wanting to invest in bonds. Most ...
  36. Options & Futures

    Can an option have a negative strike price?

    The simple answer is that, at least when it comes to exchange traded options, an option can't have a negative strike price .Remember that an option gives the holder the right, but not the obligation, to ...
  37. Investing

    What are the fifth-letter identifiers on the Nasdaq?

    All of the companies traded on the Nasdaq have four-lettered tickers, which are representative of the actual company. For example, the ticker symbol for Nasdaq-traded Microsoft is MSFT. However, in some ...
  38. Investing

    What causes a significant move in the stock market?

    There is a nearly infinite number of factors that can cause the stock market to move significantly in one direction or another. This can include such things as economic data, geopolitical events and market ...
  39. Trading Strategies

    What is a GTEM order?

    GTEM stands for "good 'til extended market". This is a type of duration order that investors can place with their brokers, which determines how long the order will remain active. A GTEM buy or sell order ...
  40. Investing

    I live in the U.S. How can I trade stocks in China and India?

    Foreign markets have always been an object of envy to domestic investors because the indexes in some foreign countries have produced double- to triple-digit returns in the past. For example, the SETI 1 ...
  41. Options & Futures

    Do I own a stock as of the trade date or the settlement ...

    When it comes to buying shares, there are two key dates involved in the transaction. The first date is the trade date, which is simply the date that the order is executed in the market. The second date ...
  42. Investing

    I am a non-U.S. citizen living outside the U.S. and trading ...

    The tax implications for a foreign investor will depend on whether that person is classified as a resident alien or a non-resident alien. To be considered a non-resident alien, a person must meet several ...
  43. Investing

    What are reverse stock splits?

    A reverse stock split is a corporate action in which a company reduces the number of shares it has outstanding by a set multiple. This is the opposite of a stock split, in which a company increases its ...
  44. Trading Strategies

    What is a virtual trailing stop order (VTSO)?

    A virtual trailing stop order (VTSO), is a stop order that adjusts as the price of a security moves. The stop price is placed at a set distance above or below the market price depending on whether it is ...
  45. Investing

    Where do investors tend to put their money in a bear market?

    A bearish market is traditionally defined as a period of negative returns in the broader market to the magnitude of between 15-20% or more. During this type of market, most stocks see their share prices ...
  46. Active Trading Fundamentals

    What happens when the lender of the borrowed shares in a ...

    In a short sale transaction, shares are borrowed from the lender by the short seller and sold in the market. The lender of these shares continues to maintain a long position, hoping the shares will go ...
  47. Investing

    What is the difference between a quote driven market and ...

    The difference between these two market systems lies in what is displayed in the market in terms of orders and bid and ask prices. The order driven market displays all of the bids and asks, while the quote ...
  48. Investing

    If I sell my shares before the ex-dividend date will I still ...

    If you sell before the ex-dividend date you will not receive a dividend from the company. The ex-dividend date is the date that the company has designated as the first day of trading in which the shares ...
  49. Options & Futures

    How is a put option exercised?

    A put option is a contract that gives the option holder the right, but not obligation, to sell a set amount of shares (100 shares per contract) at a set price. If the option is exercised, the option writer ...
  50. Investing

    What does it mean when the shares in my account have been ...

    An account liquidation occurs when the holdings of an account are sold off by the firm in which the account was created. In the majority of cases, this will deal with problems arising with margin requirements. ...
  • Showing 1-50 of 78 items
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