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Questions tagged [financial-literacy]

for questions related to understanding basic concepts in finance or certain terms in a particular context

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1answer
34 views

Is all of put option time value when OTM?

If I sell a Dec 65 strike put on 12/3 and on 12/7 the stock price is at $74 and the put bid/ask are .35 x .37, how much of that is time value?
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1answer
58 views

Investing platform options without fixed residency

Background: My wife and I are in our high-twenties currently living in UK. We don't have a mortgage, we're renting our flat. The only debt we have is the standard UK student loans, which is deducted ...
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2answers
172 views

Short-term selling of stocks with less profit

If I purchase $1000 worth of stock, and in the first week the stock value goes down to $900 and then in the second week the value of the stock reaches $1002, and then I sell the stock, Do I need to ...
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2answers
72 views

Do SPY returns include dividends?

Looking at a chart of SPY on finance.yahoo.com from March 1 - Nov 30, 2018, it returned +1.67 (+0.61%). Does the +0.61% include dividends? Looking at the historical data, dividends are displayed ...
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1answer
29 views

Understanding the FTSE Actuaries Share Indices on the Financial Times Paper UK

I am trying to understand how to read the Financial Times FTSE Actuaries Share Indices UK. In two of the columns it says Cover and Exadj. Cover is between Dividend Yield % and P/E ratio. Exadj is ...
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1answer
77 views

Can debt increase ROE?

I have the following statement which can be true or false. A company with operational rentability (EBIT/Assets) of 11% (after income tax of 30%) analyses taking debt. If the credit consists of 16% ...
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1answer
130 views

Meaning of “rat race” in the book of Rich Dad Poor Dad? [closed]

I want know what exactly rat race is and why most of the people fall into that trap?
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2answers
196 views

What is the difference between “trading in stock” and "investing?

I have no finance background and most people are saying trading in stock is not investing. I would like to know what actual investing is and if trading in stock is not investing. Then what are ...
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2answers
180 views

As a teenager, what's the best way to learn about investing? [closed]

I'm a 16 year old from India who wants to learn the basic principles of investing in order to secure a better future for myself. I've been reading quite a bit on various websites but those that I ...
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4answers
185 views

Flash Boys: “That was the tax”

I am reading Flash Boys by Michael Lewis, and I am very confused by one passage. On page 52 in my copy, they mentioned that their investment let them escape taxes. I am utterly confused how that ...
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1answer
69 views

Where do Master Limited Partnerships (MLP) lie on the risk/yield spectrum?

MLPs are required to pay profits to their limited partners. Dividend stocks can choose to stop paying dividends. Corporate bonds payments are fixed interest (a set number) but MLP payments are usually ...
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1answer
51 views

Should I create a personal income and expenditure statement at the time of being student with no source of income?

Many of the students in higher education level do not have a source of income like me and have daily, monthly and quarterly expenses of amount they get from their family, sponsors or scholarships. I ...
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2answers
90 views

Cash Transaction For Real Estate or Otherwise

When a seller of property of significant value or even an expensive exotic car requires a "cash purchase", possibly amounting to millions, is that actual cash - meaning buyers are hauling around ...
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1answer
67 views

What would be my Indian Income Tax if my salary is 15 lacs per annum

This is one topic which has always puzzled me to no end. No matter how hard I try to understand it, I always do not seem to grasp the concept. I'm currently considering an offer and would like to ...
0
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1answer
115 views

Bond sell off vs stocks

U.S. stocks fell following a bond selloff that sent yields to multi-year highs. New filings for unemployment fell unexpectedly to near 49-year lows. The benchmark 10-year U.S. Treasury yield rose ...
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1answer
82 views

What is payment period, and why is it equal 100 in this mortgage table?

Here’s the table: I think the payment period is a month, but I don’t understand why it’s 100. The image is taken from this Excel exercise: http://web.utk.edu/~dhouston/excel/exer3.pdf
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2answers
202 views

Does FDIC insurance at one bank cover each account?

I was reading that FDIC insurance covers accounts up to $250,000. Does this mean each account you have at a bank is insured up to $250,000 or is $250,000 the maximum for all accounts at a bank? Also,...
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4answers
142 views

Does selling index fund shares for the same amount the account grew by reduce the account's value?

I've been thinking about what retirement looks like, and I'm trying to figure something out. Let's say I have a sum invested ($Y) in an index fund that grew by 60k in 12 months, for a total value of $...
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3answers
281 views

Why would a lender raise interest rates if you are in danger of not being able to pay your loan?

This is a follow-up to this question. It is established that lenders charge higher interest rates to customers less likely to be able to repay their loan in full, but this increased rate shouldn't ...
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2answers
280 views

Why hold calls until expiration?

I am reading a book on options basics. I am in a chapter on selling covered calls. The author says that buyers of calls almost always hold the calls until expiration. Why is this? Here's how I ...
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2answers
146 views

Options when go private

What happens to options when a company goes private. For example, if I have a call option on Tesla right now and it goes private at 420/share, what will happen to my options?
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9answers
22k views

When someone's ability to pay is suspect, why would it make sense to give them more expensive credit?

Answers to the recent question "Why don't bond makers just get loans?" Seem to take it as a given that lending someone money at a 12% interest makes sense when there is already doubt about their ...
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2answers
87 views

Help me understand TradingView watchlist data

I'm trying to figure out what is the meaning of the percentage value (comparing to 24-hours before?) and the small last digit?
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4answers
7k views

My out-of-the-money call options are near expiration and won't sell in the open market. What are my choices?

I had attempted to sell my contracts off today but was unsuccessful. They are currently OTM options and will expire tomorrow. What can I do to minimize loss and why was I unable to sell?
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3answers
153 views

Does short selling create additional share in the market?

Let's say that I short-sell 1 share that A lent to me and B immediately bought from me. Doesn't this create additional share in the market because A will see it as "lent out" in his bank account and ...
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2answers
95 views

Partially vs. Fully Amortized Loan

Isn't the article beneath wrong to interpret a Fully Amortized Loan as a loan with 7 years maturity? Isn't the correct comparator a Fully Amortized Loan with 30 years maturity, and 30 years ...
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2answers
82 views

Short term dividend payout [duplicate]

I read that as long as I hold a stock for two business days, I will get a dividend? What if I make multiple trades for one stock. For example, if I buy 20 shares and sell 20 two days later, then I buy ...
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3answers
429 views

Foreign money comes to my account

A foreign friend wants to help me by transferring money to my savings account. I got an email from RBI telling me go for online procedure through a link. After completing 3 out of 2 steps, asking me ...
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1answer
57 views

Indian Mutual Funds

I am new to Stock Markets. I have interests to invest my savings on Mutual Funds. When I looking for Higher Return Mutual Fund securities, I have seen some information there. For Example, I am ...
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1answer
108 views

What is LEVERAGE SHARES PUBLIC LIMITED COMPANY LEVERAGE SHARES 2X FACEBOOK ETP (FB2)

I was looking into buying FB shares and discovered something called 'LEVERAGE SHARES PUBLIC LIMITED COMPANY LEVERAGE SHARES 2X FACEBOOK ETP (FB2)' . What is this and how does it relate to the usual FB ...
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2answers
43 views

Bull call spread

My textbook says the following for a bull call spread. "In the bull call spread, you sell a call with a lower strike price and buy a a call with a higher strike price. The call spread is a credit ...
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1answer
87 views

Why do CDO's have a reinvestment period?

If CDO's collect all the cashflows from their underlying assets and then pay them out to the CDO investors whats the need for a reinvestment period? and where is the principal that is being reinvested ...
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1answer
48 views

Meaning of 10-year treasury note price change

At this moment, WSJ quotes 10-year T-note as below: Price: $100 3/32 Price change: -2/32 (-0.08%) Question 1: Where does the -0.08% change come from? To me, it seems the old price is 100 5/32. ...
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1answer
1k views

Can I short a stock for a long amount of time?

The next recession is inevitable, if what I read is to be believed. Whether it happens tomorrow, or in 10 years, it's coming. Why shouldn't I short many stocks, and hold on to them for whatever ...
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2answers
110 views

What is option execution?

What is the meaning of "the execution of the Option" or "Option execution" in the examples below? Is it "signing"? The Completion, as well as the execution of the Option may be carried out if on ...
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2answers
324 views

What does the “OTC” stand for

Where do you buy "OTC" stocks,I may be naive but OTC means over the counter. I am confused as to where to purchase such stocks ?
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2answers
167 views

How do stocks rise?

If a stock shows great performance on the income statement, will the prices rise gradually or immediately after the release of information to the public?
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2answers
87 views

Bed Bath and Beyond: Q1 or Q2

Why do the news releases say that Bed Bath and Beyond released its Q1 earnings. Shouldn't it be Q2 earnings right now? On Yahoo finance, it says the recently released report was Q2 but BBBY says that ...
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1answer
167 views

What are the mechanics of tracking stock?

I'm curious about tracking stock. Take, for example, NASDAQ:DVMT. It's a tracking stock issued by Dell for VMWare (NASDAQ:VMW), which is partly owned by Dell. The idea is that people could invest in ...
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2answers
148 views

Understanding corporate earnings manipulation

While reading earnings manipulation on investopedia, I came across following sentences: Another form of manipulation is to change company policy so more costs are capitalized rather than expensed ...
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2answers
127 views

From the book of Benjamin Grahm “The Inteligent Investor” : chapter 5, pg 115, what does he mean imposing some limit

I am totally new to finance and investing world, hence please bear my basic question. I have a query on Ben's book The intelligent investor Page #115. point #4 it says : The Investor should impose ...
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2answers
260 views

Is there a standard ratio of preferred shares to common shares in a company?

I'm confused about how common and preferred shares coexist. Is a single preferred share always equal to the same amount of the company as a single common share, or does a preferred share somehow ...
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2answers
4k views

Stock Split seems not to have changed the Share Price. Why?

I was recently looking at the financial charts of TCS(Tata Consultancy Services) and noticed that the TCS offered 1:1 bonus on 31st May, 2018. I noticed that the price of the share stock did not ...
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2answers
121 views

Stock split vs bonus issue

I've spent a good amount of time wracking my brain about how a bonus issue actually benefits the stock holders. For example in a 1:1 bonus issue, the price of a share corrects to half of the pre-...
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2answers
166 views

When you buy an ETF, do you give cash to the fund manager?

When you buy a stock from the market, you exchange it with someone. When you buy an ETF, do you give the fund manager money so that he can buy more of the assets that the ETF is supposed to mirror, or ...
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1answer
177 views

What is the difference between net profit and net banking income

For Societe Generale Analysts had expected net profit of €811.5m on net banking income of €6.47bn. Why are they so different?
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3answers
3k views

Credit card minimum monthly payment

I am opening a new credit card and am not sure exactly what this clause means: Your Minimum Payment Each Month. Each billing cycle, you must pay at least the Minimum Payment Due shown on ...
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2answers
61 views

Do knock-out call options become worthless when the underlying stock is split?

Suppose you own KO call options based on a stock. The knock-out level would be at $90, the stock currently is at $100. But then the stock is split 1:2, so suddenly the stock is worth $50. Do the ...
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1answer
47 views

What is the difference between LIQUIDATED fund and ACQUIRED fund

There are some funds that show up as "liquidated" when googled, which implies that it closed due to a bad performance. Some funds that show up as "acquired by XYZ (ticker of another stock that's being ...
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8answers
755 views

Why are tech stocks risky investments?

I've seen this mentioned so much in writings about intelligent investing, but I don't understand why. Are Amazon and Netflix tech stocks?