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I have a gold mine in my back yard (pls keep this a secret). I know that I'll have 100 oz by 12 months from now. As a hedge position, I sell one future contract. I've locked in my sale price, and I no longer worry that the price of gold will drop before my 100oz is mined and ready for sale. A speculator is on the other side of that contract. In effect, he ...


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A speculator trades futures in hope of making a profit. He makes a profit if he buys and later sells a contract at a higher price (or he shorts a contract and buys it back at a lower price than he sold it for). He is simply trying to profit from price change. A hedger is someone who buys and sells the actual commodity and uses futures to protect ...


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Think about the income produced by the portfolio at retirement. Then a $75,000 income requires a $2,142,857 portfolio at 3.5% return. To produce the portfolio requires $75,000 a year put-in for twenty years at 3.5% return with monthly compounding to reach $2,209,253 . Or even yearly compounding reaches $2,195,210 . The first problem is taxes and so taxes ...


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I'd suggest you read JL Collin's stock series. This will give you a good primer on the pros and cons of stocks and bonds and (most importantly) teach you how to think about your investments. His main recommendation would be to invest in index funds which have been shown to beat the vast majority of actively managed funds over the long-term. I highly ...


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A margin account is one where you can borrow money from your broker to buy securities. The loan is collateralized by your cash and/or marginable securities. You pay interest to the broker on cash borrowed. However, you do not have to borrow cash from your broker. Some strategies cannot be done in a cash account and require a margin account: shorting ...


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Past returns are past, future returns are future. I have no experience in Indian real estate market, but I should mention that any CAGR should take into account inflation. Stocks yield about 6% above inflation. If inflation has been on average at 14-24%, that explains the origin of the high CAGR in real estate. Also, how much time has your father spent in ...


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The technical answer to you question involves the Synthetic Triangle: There are six basic synthetic positions: Synthetic Long Stock = Long Call + Short Put Synthetic Short Stock = Short Call + Long Put Synthetic Long Call = Long Stock + Long Put Synthetic Short Call = Short Stock + Short Put Synthetic Short Put = Short Call + Long Stock ...


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If you add or subtract a fixed number to the all of the portfolio returns and regress them against the market returns, you will get the same alpha value as before shocked the portfolio returns.


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The call seller has the obligation to sell IBM at $100 if it is over $100 at expiration. If it is, his gain or loss will be the premium received less the intrinsic value of the call. The intrinsic value is the in-the-money amount. 1) At $105, the intrinsic value is $5 so the loss is - $300 (+ $2 - $5) 2) At $101, the intrinsic value is $1 so the gain ...


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0.5% is less bad than 0.0%. You're only losing 0.75% instead of 1.25% to inflation (which is 60% loss instead of 100% loss). As for where to put money for two to three years... savings or term deposit accounts are exactly where I'd put them.


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While cryptocurrency is new and unusual, there is a similar instrument which is much older more familiar: Gold. Obviously it's not exactly the same, but we can make useful analogies. How does one invest in gold? Buy and sell chunks of gold itself Trade shares of a fund (ETF) that holds gold for you Trade shares of gold producers (miners) Trade shares of ...


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