New answers tagged

0

Not necessarily. Yes, traditional banks make money on interest from their customers but they also engage in borrowing (at the LIBOR rate + spread). Also, financial services are not just traditional banks. Financial services are all kinds of creatures, including investment banks and mutual funds. And those invest in the stock market. On average, at the time ...


-2

and always worry about the maintenance etc... I have to say IMO this is just a common myth. You have a service that handles the renting, and once in a blue moon you make a two-minute call to have someone install a new dishwasher or whatever. It's certainly true that many folks agree with you, "renting is a big chore", I have always found that ...


7

For most people a properly diversified stock market investment is actually better than buying 4 houses: you can start investing with small amounts of money every month a house is a huge clump investment. This is the exact opposite of a diversified investment. It does not matter if you are a company with thousands of units but if you only have 1 or 2 houses ...


1

In order to sell a covered call against 100 shares, you need Level 1 option approval. If you have Level 1 option approval and you try to sell the call without owning 100 shares, the broker's platform will prevent you from doing so. In order to sell a naked call without owning the shares, you need a margin account, Level 4 or 5 option approval (some brokers ...


3

This gets asked regularly. By keeping the pool of clients small, the main problem is taxes: you'd have to form a company, and keep track no only of everyone's balance, short and long term capital gains (realized and unrealized), dividends, etc, and inform the IRS every year. And taking a slice of their pies as an advisory fee. Plus needing a cash reserve in ...


0

Interesting question that I don't know the exact answer to. (1) Yes, you are correct that the 1/12/20 call purchase triggers a wash sale and the $1,100 loss is added to its cost basis of $3,900. (2) IRS Rev. Rul. 2008-5 Rev. Rul. 2008-5 states that if you realize a loss in a taxable account and you purchase substantially a identical securities within the 60 ...


23

First of all, you should have been receiving dividend checks from both Disney and Sony all these years. If you haven't, it probably means that they don't have your current address. The dividends themselves are going to be too small to even worry about for only one share, but you still need to make sure that these companies know who you are and have your ...


1

If you are asking how many times you need to compound 15% to result in a factor of 6, it’s simple algebra. X=log6/log1.15 = 12.82 A return of 15% per year will give you $60,000 on your $10,000 in just under 13 years. Or ignore time, and just go with 13 instances of a (compounded) 15% return.


82

Neither Sony nor Disney stock has split since 2011, so the value of each is still 1 share. The current value of 1 share of Sony stock is about $103, and 1 share of Disney stock is $174. While that's nothing to sneeze at, it's not a life changing amount either. I think the novelty of having a physical stock certificate for such popular companies is worth more ...


37

Today, it's not often that people are in possession of stock certificates in this era of electronic trading. In fact, many of today's younger investors/traders don't even know that they exist. If you want to sell such shares, the easiest way is to deposit them in a brokerage account. It's somewhat akin and not much harder than depositing a check into ...


0

You can do anything you want with the stock you receive from from exercising an option - including selling it or collecting dividends. However, there are several reasons why you probably don't want to exercise before expiration. It's usually best to execute an offsetting transaction (as D Stanley pointed out, selling a equivalent call) to close your position....


1

Once the call has been exercised and you have bought the shares at the strike price, it's no different than if you had purchased them on the open market (just at a different price). You can sell them, are eligible for dividends, splits, etc., and can buy protective puts or sell covered calls on them. While the call is still open (meaning you have bought a ...


1

Net_Income_before_tax / Sold_item_at = Operating_Margin, so yes, your interpretations are correct: raise the selling price, and Operating Margin goes up; reduce COGS and expenses (which increases Net Income before tax)and Operating Margin goes up; do both, and Operating Margin goes way up. Note that another way to compute it is: Operating Margin = 1 - ...


0

Where do I set the currency for Crypto:Bitcoin Wallet? Ideally I would them to be USD. I don't think you actually want that. A bitcoin wallet does not hold US dollars, or Canadian dollars. It holds bitcoins, which you already indicated is the currency for that account: Crypto:Bitcoin Wallet (Type: Stock, Commodity: Bitcoin) It sounds like what you ...


1

Flipping is a generic term that refers to purchasing an asset with the intent of selling it for a quick profit in a short period of time. It's most commonly used in regard to short-term real estate transactions and selling IPO shares shortly after they begin trading. You could also use flipping for short term stock trading but it's non specific. It could ...


0

You are only allowed to trade settled cash in a cash account. With T+2 settlement (adopted in the U.S. in 2017), the funds from a sale will not be available for two days. There is no limit to how many day trades you can make in a cash account as long as you are using settled funds. For example, assuming that you do not pay commissions, if you have $10,...


2

"XXX Company Announces Proposed Public Offering of Common Stock" means that the company is selling shares to the public. This could be an Initial Public Offering (IPO) or it could be a secondary offering. Whether a secondary offering is dilutive depends on whether the shares offered are newly created or if they are existing shares owned shares ...


6

No. The warning says you are placing a pre-market order that is eligible for trading until two minutes before the market opens. They are warning you because pre-market trading carries additional risks, like reduced liquidity and increased volatility, and they want to be sure you are aware of what you are doing.


1

If (for whatever reason) you're deeply interested in the "true epistemological basis" of what the hell a share is, investigate the history of "stock". Thus, begin with The Dutch East India Company and go from there. (It's interesting that everyone uses the word "stock" all the time, but few realize what it means/ origin.) I ...


3

A share is a the ownership of a fraction of a company. That said - as the average Joe private investor - you will of course hold only tiny fractions of most companies and won't be able to influence the company like a major investor does. With owning a fraction of the company you are entitled to receive a share of their earnings (called a dividend) and a ...


2

Are funding debt and Notes issued liability? Yes Is redeemable convertible preferred stock equity? Yes and No - from an accounting standpoint it is equity because it represents ownership (and shows up in the equity section of the balance sheet). However, financial analysts often value it like debt since it's typically bought for its fixed payout, not for ...


0

The Exercise Price is what you have the option to buy the shares for after the expiry date (which may be the same as the vest date, but not necessarily). So you'll have the option to buy shares for 100 Euro at that time. Obviously if the price of shares is less than 100 Euro at expiry, then you wouldn't buy them and the options would be worthless. My guess ...


0

As other answer have pointed out, in theory it does not make a difference if you have 5 shares at 20$ each or a single share at 100$. However, in practice there is one important difference if the price of a share is very high compared to your budget: fractional share ownership or rather the lack of it Many brokers will only allow you to own full shares, so ...


2

What would be the exact amount of stock that you actually receive in/after year 1, 2, 3, 4, and say 5? It depends on the value of the stock at the time of the grant. Typically stock grants vest evenly over that time period. With a "cliff", the first vest occurs after a longer period, so you may get 1/4 after 1 year then 1/36 a month for the ...


3

Some clarification first because it is not clear how many day trades you made and in what time period. You can only trade settled cash in a CASH ACCOUNT. That means that with T+2, the funds from a sale will not be available for two days. There is no limit to how many day trades you can make in a cash account as long as you are using settled funds. A ...


1

An exchange is an organized market for buying and selling the securities that are listed on it. You buy such securities via a brokerage firm where your account is located. You cannot move a stock from one exchange to another whereas you can transfer your securities from one brokerage firm to another. Interactive Brokers is a brokerage firm not an exchange....


3

From piecing together the comments and the links you provided here's how I interpret the situation: You bought stock through IB in a US company By US law, IB is required to withhold tax on dividends at a 30% rate You want to avoid that withholding (and presumably pay the tax when you file). This is because you own stock in a US company - it's not because ...


2

So, my question is "Can I trade FB specifically in IEX using my account? Yes. Does NASDAQ.NMS mean NASDAQ, Sort of. NMS means National Market System, and the venues such as IEX participate in NMS. or the query to buy FB could be eventually executed by some other exchange, not necessarily NASDAQ Based on IB's "SMART Routing" mechanism, by ...


5

Ben Miller provided a lot of good information in his answer. I'd add a few additional points: A day trade is a round trip in an equity or option on the same day (buy then sell or short then cover). Making a day trade isn't a problem. You'll be considered a pattern day trader if you trade four or more times in a rolling five business day period (and your ...


0

All U.S. brokers must comply with SEC regulations. Are you aware that as of February 18, 2020, the SEC Fee rate is $22.10 for every $1,000,000 in sale proceeds? It's listed at your broker's web site. That amounts to about two cents for a $1,000 trade.


4

First, I will point you to FINRA's page Day-Trading Margin Requirements: Know the Rules. It covers all of your questions and more. To answer each of your questions: A day trade is when you buy and sell the same stock on the same day, or if you sell short and then buy on the same day. If you open a position for Stock A and then close at least part of that ...


1

Rising interest rates suggests an economy that is strengthening. An improving economy means increased employment which improves consumption, making companies more profitable, driving the stock market higher. Banks earn more from the spread between interest paid on deposits and lending money at higher long-term rates. Insurance stocks also fare better in ...


2

Such a question is not directly answerable because there are many factors that go into a bank's profitability, but here's something to consider: Bank's don't make more profit just because the federal interest rate is higher. Banks must pay interest as well, either to entities that have large deposits with the bank, or to the fed as they borrow money to lend ...


3

As others have mentioned, the index itself is an imaginary construct derived from the prices of its constituent stocks. Therefore the index can't be changed externally and therefore have an effect on those stock prices. However, as also mentioned, there exist actual commercial products such as ETFs which actually buy stocks in an attempt to simulate indices. ...


-1

Generally - yes. Banks make money on the spread between what they lend out and where they refinance - and a 20% spread is smaller on smaller interest rate (i.e. 1% to 1.2% is 0.2%, 2% to 2.4% is 0.4%). And yes, financial institutions generally refinance. Lots of financial institutions are in serious trouble because of the low interest rate, which also makes ...


2

Several answers mentioned that derivatives of the index can move the stocks but none provided examples so I though that I'd offer one: The price of index futures equals the underlying index value only at expiration. Prior to that, they reflect the future price of a stock index given pending dividends and current interest rates. The long futures trader does ...


12

The index is an average of the stocks in the index. A very simplistic index consisting of 3 stocks might be calculated as: (share 1 price + share 2 price + share 3 price) / 3 = index price In practice the calculation will be more complicated, but the principle stands that you put in a set of share prices and get out an index price. By that definition, the ...


22

Per definition not - the Index is only a published number and when you add the price of certain things and report this number, the number can not change the price of the items. Now, if you have financial products that trade of the price of the index - futures, ETF - then yes, someone going long a large amount WILL change the index because unless someone ...


23

The tail absolutely wags the dog in the equities markets. For a long time and this has been an active area of discussion. More pragmatically, market microstructure - such as an index or even hedging against an index in the options market - can drive market direction in periods of low liquidity, as in when there are not larger counteracting forces such as a ...


1

Options are not forcibly exercised when they expire in the money. If you own an option, and you don't want your broker to exercise it even if it expires your money, you can instruct your broker not to. Source: The Options Industry Council FAQ, Options Exercise, question 11.3.5.5: The option holder can always submit instructions to their broker regarding ...


0

When I look at an income statement, I see that "net income" is equal to "net income to company" minus "minority interest in earnings". Looking at the cashflow statements, I see that the net income represented there is the net income to company minus minority interest in earnings. Where does the latter go? The rest goes into ...


-2

You have a right but not a duty to vote in the 2020 presidential election. That doesn't mean you can exercise that right on November 4th. Inaction is still an action, exercised by your choice alone. Don't you agree to the terms when you buy your options? When you open an account with your broker? Imagine your question being asked in any other economic ...


2

Regarding automatic exercise, brokers do not automatically exercise the options. In the US, if an option is one cent or more in-the-money (ITM) at expiration, the Option Clearing Corp (OCC) will automatically exercise options whether they are long or short. This is called Exercise by Exception. For equity options, you will end up with a long or short ...


1

Maybe an emergency came up, and you weren't able to access internet for a while. Maybe you got into an accident and were in the hospital for some time. Whatever the reason, you weren't able to access your online broker during those time. Suppose you bought some shares at $1.00 each, hoping/expecting them to rise in value. Shortly after, an emergency/...


1

Options are automatically exercised after expiration because there is someone that is expecting that specific result. When you buy an option, there is someone that sold an option. And vice versa. The assumption is that someone is waiting to be delivered shares. Both parties are responsible and it is worse for the brokers to assume that one is irresponsible. ...


0

For a macro picture, a screener like FINVIZ might get you in the ballpark. Their data base has 7,500+ stocks and ETFs with the industry and sector. This might be effective for a small category like Industrials/Farm and Heavy Construction Machinery that has 20 or so names but perhaps utterly ineffective for sectors like Finance, Technology, Biotech, etc. ...


0

Exchanges use price-time for order hierarchy on the order book. IOW, orders are prioritized based on the sequence that they are received. Hidden orders are prioritized after visible orders in the order book behind all visible orders and previous hidden orders at that price. An exception would be an iceberg order where the displayed portion is prioritized ...


0

Yes, you can make money from buying and selling the same stock. If it drops after you sell some/all of your shares, you can buy them back. If it rises after you buy some/all of your shares, you can sell them again. Where this becomes problematic is if: Price collapses and stays down so you either become a buy and holder waiting for recovery or you average ...


1

Americans are taxed on their worldwide earnings. Forming a foreign corporation does not absolve Americans of this, and there are a lot of information sharing agreements from foreign countries, their banks and more to the US Treasury to help the US enforce its tax collection laws on its citizens. Your idea cannot effectively function as a way to grow capital ...


0

If a person wanted to keep the holdings, one can still obtain stock certificates. Ask your broker. If the company is being de-listed because they can’t or won’t follow the transparency laws of the strongest exchange of the world, one has to wonder why.


Top 50 recent answers are included