New answers tagged

1

Just to illustrate what others have said in their answers... Here is the order book for a randomly picked stock: (this is from a French site, because order books are public on many french sites, when they are often reserved to subscribers on US sites, but you probably have access to that with your trading account, and it works the same everywhere). The ...


0

Public companies use stock transfer agents to keep track of the who owns their stocks. Direct registration Under direct registration, when you buy a stock, the stock is not held in your broker's name. It is held in your name, and your name appears on the stock transfer agent's list. In this scenario, there is no "custody" as the stock is held directly ...


3

Yes, you have to pay it. The person you borrowed the shares from is entitled to the dividend, whether small or large. You are likely to have enough cash in your account to pay the dividend, because you are required to maintain margin for the short position. Of course, the stock price (all else equal) will go down by a similar amount on ex-dividend day, so ...


2

Market Makers On exchanges with market makers (as opposed to auctions/specialists), the agent which actually executes the trades ensures a positive bid/ask spread, because that is their compensation. Obviously, if you were a market maker for such an exchange, you would never offer to sell a security for less than the price you are willing to buy it, ...


1

Stock issue, transfer, and holding is a system of accounting. A stock-transfer-agent keeps an accounting of a company's stock. If the transferred stock is not held in the investor's name then there is a second accounting by a stock-broker who is holding the stock in their name but accounted on their books to their customers. The real risk is the company ...


0

The brokerage company doesn't own the stock. The brokerage facilitates the buying and selling of stock. The shares you buy in any brokerage are your shares. The brokerage can't just steal people's shares because they're going broke. The more interesting question in this case would be where does he (or where do they) keep their cash. The cash actually ...


7

What you propose is a bit related to High-Frequency trading, more specifically low-latency strategies: In these strategies, computer scientists rely on speed to gain minuscule advantages in arbitraging price discrepancies in some particular security trading simultaneously on disparate markets or flash trading: This order type was available to all ...


10

The basic premise of you question is incorrect. The bid price is the lower price and that is the price that traders are bidding to buy the security. The ask price is the higher price and that is the price that traders are offering to sell the security at. You cannot buy at the bid (the lower price) and sell at the ask (the higher price). It is the ...


2

Only the lowest sell price and the highest buy price execute during opening hours, at the open all overlapping prices will execute at what is called the match price assuming there is sufficient volumes to execute the trade, it depends on the exchange algorithmn and the order types in the execution range though, for example an order may not allow a partial ...


2

Regardless of which broker you choose, you will have access to UCITS ETFs, many of which follow international indices. However, you cannot buy funds that are domiciled outside of the EU, at least not as a private investor. The website https://justetf.com has a database of ETFs and automatically applies availability restrictions based on country, and often ...


34

No, because the lower prices are prices at which you can sell (offers by others to buy), and the higher prices are prices at which you can buy (offers by others to sell). Any trader who offers to sell at a price lower than where someone has offered to buy, or vice versa, will be immediately matched by the exchange to execute the order; the prices will not ...


1

In my experience, a ticker symbol is always sufficient to identify a stock, at least for domestic stocks. (I'm in the United States; I don't know what country you're in.) So you should be able to just use the ticker symbol. You write that "if I try to use GoogleFinance it requires me the Exchange Symbol as well". That's not true for me; I can just type a ...


1

I agree that the shirt answer is no. However, you should research “delta neutral options trading” strategies. This is how market makers make money on your trades no matter which way the market goes. Another strategy would be to sell a put spread AND sell a call spread. I don’t suggest you try any of this before you thoroughly understand options gamma, ...


1

The short answer to your question is no. You have to put in one trade before the other right? So you buy 500 shares, now you're long 500 and you want to put on your second trade i.e. short 500...how do you do that? Well, you sell 500 and now you're flat, right back where you started. So you sell 500 more and now you're short 500. Then you try to go long and ...


1

Well, a system of reorganization in bankruptcy often just wipes out the shareholders and makes the bondholders the new shareholders. That's why I don't favor government bailouts because the purpose of the bailout is not to save the shareholders but just to give the bondholders time to hedge their bonds before reorganization. But the economy can adapt to an ...


1

what are the implications of having more or less of one's income in publicly traded shares? Stock-based compensation is taxed in several parts. First it's taxed as ordinary income when it's vested, which can be immediately or in groups over several years. Typically, this tax is automatically deducted from the shares that you get, meaning if you are ...


0

This depends on when the next dividend will be paid. Basically, if the dividend yield is 5.5% then the dividend paid 1 year from now must be 2.585. But, Gordon's formula makes certain assumptions about when the next dividend will be paid. If they do not hold, the dividend could be slightly different. For example, type into GNU Octave: 2.585*sum(1./(1.055)....


3

The only totally rational basis for this would be transaction costs -- if the stock is expected to appreciate slightly from here (so one should wait to sell), but not enough to cover commissions and spreads on a new purchase. Or similarly, if the stock is expected to dip slightly before heading higher (so one should wait to buy), but for an existing position ...


2

Costco supplies a very large number of small businesses. If a large number of small businesses go bankrupt Costco takes a big hit. Walmart's customers are mostly individuals, some small businesses. A large number of small businesses going bankrupt will not be as big of a hit to Walmart. There's also the issue of having a membership fee. Membership fees are ...


2

It doesn't follow that high volume means the price will go up. Yes, the volume could be high because lots of people think the stock is undervalued and are rushing to buy. But the volume could also be high because lots of people think the stock is overvalued are are rushing to sell. If news came out that a company had some sudden, major problem -- a big ...


2

Throughout the day, if a similar amount of buying and selling volume occurs at current price, there is equilibrium and price goes nowhere. It doesn't matter how high or low the volume is, there's equilibrium. If an excess of buying volume occurs, price rises. The longer this continues, the higher share price goes. Note that it is the aggregate buying and ...


6

There is no correlation between volume and price. There can be a ton of volume on a day when the price moves a lot, or there can be a ton of volume when the price barely budges. Volume doesn't imply direction of the price movement. Volume is just a count of the number of shares that exchanged hands. It doesn't tell you if people were willing to sell no ...


2

Good question, here are 2 (among many) possible answers: The Chinese Government seems to manage the stock market directly at times. I.e. There are stories (like the one above) where the governments doesn't allow funds or brokers to sell. That level of control likely wouldn't happen in the USA. Maybe their Central Bank stepped in more quickly/strongly. ...


0

In the USA, a Pattern Day Trader is defined as a person who executes 4 or more day trades (options and equities) in a rolling FIVE business day period in a MARGIN ACCOUNT, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period. A PDT must maintain a minimum equity of $25k on any day ...


5

When investors buy stock in an IPO, they give the company money in exchange for the stock. The company now has cash. It uses that cash to buy equipment, hire employees, etc. When an investor buys stock on the stock market, you're normally not buying an IPO. You're buying stock from another investor. In that case the company doesn't get the money: the person ...


0

The simplest way to determine the return of an asset is to take the ending value and divide it by the starting value. Let's build that up in terms of how complex you may want to get: 1) If you start with $100 in the bank, they pay you $2 in interest, and you end the year with $102. 102 / 100 = 102%, and after subtracting the 100% you started with, this is a ...


0

This is not easy. It is made harder by there being several measures of return. One is money-weighted rate of return and the other is time-weighted rate of return. If you did not make any changes, the return is 100*(market_value_now / market_value_3mo_ago - 1). This formula requires that there are no dividends, or that you wish to exclude dividends from the ...


3

Did you set a limit on the order? The price shown is never a guaranteed price, it only shows you what the last sale was for, and maybe what offers are currently in the order book. If you give a buy order without a limit, it means "I want to buy for any price", and if this is a share not traded frequently, someone will see the order and fulfill it at a (...


6

Something is amiss and without detailed information, we'd be just guessing at an answer. But here are some guesses anyway: Make sure that you bought not shorted the stock. Check your trading fees (doubtful since it's 10%) Perhaps it was a fast market day when there was a lot of trading and price movement. The last price was 165 but the bid/ask spread ...


0

XYZ can make a secondary offering (create more outstanding shares) to raise additional capital. There is a limit to how many additional shares (how much dilution) the market can easily absorb, so more money can be raised when the stock price is higher. XYZ can attract and retain employees with stock bonuses more effectively with the stock at $200 than at $10,...


0

Not fully answering your whole question, but a quick and dirty way to get the expected daily move by using the Implied Vol is to divide the implied vol by 16. (Taken from the Sheldon Natenburg book) So an implied vol of 80% would imply that a 1 standard deviation move per day of 5%


1

The reporting of financial data in round thousands is applicable only on the tabbed page headed "Financials". The tabbed page headed "Statistics", where you are reading the total shares outstanding, does not report figures in round thousands. Nor does the statistics page say that it is reporting in round thousands. For example, the reported earnings per ...


1

If i’m not mistaken, common stock under the balance sheet under shareholder equity is the cumulative amount of “the value” of the shares issued!! 45,972,000 * 1000 is the total value of shares issued throughout the history The previous quarter was: 45,174,000 * 1000 The difference is $798,000,000. No clue what is is though. I’m assuming its the amount of ...


1

An option can be traded at any time. There are 3 main reasons why an option price will change: Underlying price of LB stock moves Implied volatility increase or decrease Time decay, the non-intrinsic premium of your option will slowly decay over time and go to zero until the time of expiration when essentially the option is worth only its intrinsic value. ...


4

This isn't really the result of a deliberate strategy (most of the time). In this case, there are no sellers, i.e. the stock at the moment is worth more to a potential seller than is currently being offered by the market. That means the price must rise to entice the potential sellers to part with their stocks. Suppose you had bought a stock and you think it'...


0

when the demand is high, so in this case the bid price raises, the price get high too. Moreover there's no seller-side offer, so the price necessarily must raise.


0

Lower the IO the better. If a stock is 100% IO then there's no room left to rise quickly. Less IO means there's room for the big guys to get involved, and us retail traders piggy backing off the large block purchasing.


4

Stock prices are not tied to current performance, they are tied to future performance that may be tied to current (and future) market conditions. So if the market thinks that a company will perform poorly going forward based on the current environment, then it's likely that it's stock price will suffer. The financial (i.e. ignoring voting rights) value of a ...


0

Consider an individual company. Or, a portfolio of companies. At discount rate of 10%, and growth rate of 4%, one dollar of yearly income is worth 18.3 USD. (If you want the formula, open GNU Octave or Matlab and type sum(1.04.^[0:1000] ./ 1.10.^[0:1000]) into it). Now, if this year, income drops by 20%, instead of getting 1 USD, you get 0.8 USD, the ...


0

Stock prices can not be smaller that zero, but remember that you pay for the ask price and you get the bid price (the difference is the spread). Some brokers might also charge commissions for each order and on top of that they usually charge overnight fees. With the current Forex brokers your equity can't be negative, so if all the factors named above are ...


1

Your general supposition is correct: if you had an imaginary stock that could go up 10% every year, you're better off just keeping the money in, as then you are basically doing what you say (earning 10% on the money you'd be taxed on), and you get to keep 80% of that additional 10%. However, the real world doesn't work that way - stocks go up and down, and ...


0

Essentially correct, which is why it doesn't usually make sense to sell and rebuy the same stock in a short time period. Note that when dealing with losses, this would amount to a wash sale - you can't sell a poorly performing asset to claim capital losses and then re-establish your position immediately (you are disallowed from claiming the loss, since it ...


1

No. You selected some US stocks that have (very) high P/E ratios. There are many US stocks with P/E ratios below 15. Those include most big banks, airlines (obviously), retailers, oil/metals producers, etc. All of the stocks you mentioned are technology stocks that Graham would likely have ignored anyway.


1

How are stock buyback announcements made and are these announcements voluntary? Under SEC rule 10b-18, companies are required to disclose their stock buyback programs in their quarterly and annual reports. Normally they also announce them in a quarterly announcement or other public forum, as they're generally perceived as positive development for the ...


2

From multpl: 12-month real dividend per share — inflation adjusted February, 2020 dollars. I think you'll find the reason there. To make it easier to see, I highlighted it in bold. (Also, as you already noted, it appears the multpl figures are annualized, not per-quarter dividends.)


0

I believe that a precursor to corporate stock buybacks are insider transactions, at least sometimes. I've not yet identified a good way to identify stock buybacks, but I've been on board when it happened simply by investing based on certain insider transactions.


1

The question cannot be fully answered due to missing details: What is the taxation? How much dividend does the stock pay? ...but, the correct formula for zero taxation and zero dividend is 100*100*(1.10 / 1.02)^25. So the value will be 66040.88 dollars, IF there is no tax, and IF the stock does not pay any dividend and will not pay any dividend in the ...


1

Real growth is 8% per year, so in n years one share will be worth (in today’s money): 100 x (1.08 ^ n). Remember not to ignore dividends when calculating the total return.


-1

i would almost invariably say use a trailing buy order and a traling sell order, if you want to make money and buy dips and follow the trend up


0

You can make money buying or selling options if the stock cooperates. Timing is everything. Avoid selling options until you really understand options and you are an experienced investor/trader. As for LB, it normally has an implied volatility of about 50%. At that level, you 4/21 $5 put would have a theoretical value of ZERO. Because the market has ...


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