New answers tagged

1

For most large cap stocks, the borrow fee rate is low and almost negligible (as low as .25%). So as share price increases, your daily borrow fee debit will increase because share price is rising. Where the borrow fee becomes problematic is if the underlying is a less liquid stock and the borrow rate starts rocketing up because the stock has become ...


2

If you read what you wrote, I think the answer is fairly clear that you don't want to sign up for the Ally deal. I am not a financial adviser, so you can take any of the answers here with a grain of salt. My question to you is what is the 30% buffer against? Against your potential loss? I don't exactly understand. The central question here is what are ...


1

30% is a little high but gives them more flexibility to add investments strategically without having to liquidate something else (which would bring transaction costs into play). You can certainly get better than 1.6% on average by allocating that 30% to something else, and 0.3% is not a huge fee for a managed portfolio depending on what level of management ...


0

Let's say my broker wants 200% margin on short sells (100% my own money, and 100% of the short proceeds). If you have to collateralize at 100% of the value of the shorted position then you are not on margin. My question is if instead of putting $200 in margin, I put my $100 of GOOG in and $100 of proceeds from PNQI. This would mean I would spend $100 on ...


0

What if you can't find anyone willing to lend you the shares to short? Does it happen often? In real world, do we know actually know the individual/institutions we are borrowing shares from? If no shares are available to borrow, you cannot short the shares. However, if the stock offers options, you can trade a synthetic short which mimics a short position ...


2

When some companies go public, instead of just offering common shares, they offer a bundled Unit which my also include rights and/or warrants. In general, the components tend to begin trading individually once the IPO goes occurs. Rights tend to have a shorter expiration whereas warrants are effectively long term options (1-2 years or more). Rights ...


1

The owner of your short call has the right to buy this stock at $84. If the stock has dropped to $75, it would make no sense for him to do so since he can buy it for $9 less on the open market. The call will expire worthless and you will continue to own the stock but at a loss of $3.50 due to the $5 drop from $80 to $75 less the $1.50 premium received. ...


0

Doubt #1: Price of straddle vs. 85% straddle price. Implied volatility tends to trade over realized volatility. That is almost assuredly why you've read to make such an adjustment (the ~85% figure is a very ballpark number and would vary on a case-by-case basis). Look at a data vendor that such as ivolatility.com graphs to get a sense of how much and how ...


0

Each option has its own implied volatility. There are a number of option pricing models so I would assume that it's possible that there may be mild variance in the calculation via each one. I've used Black Scholes for about 30 years so I don't know to what degree it varies from model to model. There are also a number of ways to calculate the average ...


0

In a traditional stock split, the number of shares increases by the split ratio and share price decreases by the inverse of that ratio. For example, you own 100 shares of XYZ at $100 and a 2:1 split occurs. The post split position will be 200 shares at $50. The value of the position is unchanged since 100 x $100 = 200 x $50. To reverse engineer the data,...


0

An increase in cost basis is most likely a wash-sale adjustment. There can be intermediate wash-sales even when there is no ultimate wash-sale and there can be same-day wash-sales. The figures on the 1099-B don't get corrected, for instance to no-ultimate-wash-sale, until they are tabulated on an 8949. For instance on a 1099-B, a loss on the first trade ...


3

Shares outstanding are all the shares held by investors. Treasury shares are held by the corporation. Shares outstanding plus treasury shares equals the number of issued shares.


3

Presumably it means that the value of the Dow Jones Industrial Average at that time was 892. The value was around that number for much of the 1960s, 1970s, and early 1980s.


0

You stated that all of these trades occurred on the same day. If it's is simple as that then your calculation is correct. However, there is the possibility that you have other trades and positions in this stock within 60 days of the trading day in question (30 days before and 30 days after). If so, there could be a wash sale violation, resulting in the ...


0

There are two possibilities: There was a trading halt in GOOG shares at that time Data providers have screwed up Since there is no GOOG trading halt listed on the Nasdaq Trading Halt page, one can only assume that this is a data provider issue. One could also reach the same conclusion by looking at Time & Sales.


0

I suspect you're confusing gains with dividends. What you're describing is, loosely, how dividends work in this kind of account. Say you have a stock that has a present price of $100, and a dividend of $1 per share per year. You own 10 shares of that stock. Each year, you get $10 ($1 * 10) in your account, cash. That money now isn't in a stock - it's ...


0

There a lot of confused information in your question so it's impossible for anyone to provide an accurate answer. When there's a stock split (traditional or reverse), the options adjust accordingly. If the put was OTM before the split, it's OTM after the split. No one exercises OTM options nor would a broker allow you to do so. If there's time ...


2

1) Did the option value actually increase to $3.10 before close on 2/13 or do you think this was a bug in Robinhood's software? No, this was not a bug. And no, your option's value did not actually increase to $3.10. The bid/ask widened from $1.80x$2.00 at 15:54:42 to $1.70x$4.50 at 15:55:06. The latter quote is what is found in your screen capture. ...


5

From my understanding there is no penalty for doing so as it is a gain and not a loss... Correct, since you are selling at a gain you aren't breaking any rules. ...and it would allow me to buy more stock to hold. Not correct. Assuming the price of the stock does not change due to the market between you selling and re-buying, you would end up with the ...


4

The purpose of a for-profit corporation is essentially to invest money on behalf of its shareholders, and turn a profit that it can distribute in the form of dividends. More money to invest can = more return, if the company is managed well. So let's say you're a hotel company: you can buy a hotel for $10M, and you need $1M on hand for each hotel for working ...


0

Some firms are already pushing toward T+0. At one broker, when users trade with other in house accounts, settlement is T+0. Another broker offers T+1 settlement on some stocks so that when assigned on a covered call, one can buy new shares at current price, avoiding an assignment on the original shares which have a large capital gainand would therefore ...


0

As I mentioned in my comments above, a call warrant is a long term option (the right to buy the stock at the strike price but with a further expiration). In common usage, warrants are assumed to be call warrants unless specified as put warrants (the right to sell the stock at the strike price). PTE's secondary offering consists of a unit which is ...


0

To answer as mentioned above, yes you can cancel it. Thx


0

The warrants that are received along with secondary-stock-offerings are like free call-options. An investor that exercises a warrant has to pay a strike price but benefits from a gain in the stock price and that if the stock did gain beyond the strike price. The secondary-stock-offerings can sell at a higher price than the current stock price because they ...


0

From Investopedia: A secondary offering is the sale of new or closely held shares by a company that has already made an initial public offering (IPO). There are two types of secondary offerings. A non-dilutive secondary offering is a sale of securities in which one or more major stockholders in a company sell all or a large portion of their ...


3

The answer by mhoran_psprep is correct - credit unions are owned by their members, and that ownership stake is represented as a share account. In fact, any depository account is treated as ownership, there is no actual concept of a savings account at a credit union - depository accounts automatically represent an ownership share of the company, so the ...


7

When dealing with a credit Union in the United States you will frequently see the word share. That is because you are not just a customer, but a member and part owner of the credit union. The law requires that you own a share. In the three credit unions I have been a member of, every member owns a share, and a share costs 5 dollars. The share is ...


2

Contingent orders (limit, stop loss, all or none, GTC, etc.) can be adjusted or cancelled at any time.


0

Yes, short covering can raise share price above the offered buy out price. This occasionally occurs when the buy out price is significantly higher than current price and there's a gap up. If there are no other companies rumored to be possibly offering a higher buy out price then share price will correct down to the buy out price as new shorters come in, ...


0

Boeing's stock price dropped 11% on the Monday after that crash, and another 9% since then. Note also the sharp drop on 17 Oct 2019 when Boeing told the FAA that it knew about the MCAS problems.


2

If you look at a 5 year chart of Boeing where price ranges from $100 to $400 then news related price moves are going to be muted in appearance. Shorten your chart view to about 15-18 months and you'll see nearly ten drops of 30 to 70 points in a week or so. And if you check the news releases at those times, you'll see that the price drops correlate ...


-1

Air travel is growing between 4-5% a year. This is faster than economic growth in general. The economies of industrialized nations are growing between 2-3% a year. Seems like a good investment if you can invest into 4-5% a year growth instead of into 2-3% a year growth. Add 2% inflation to 4-5% a year and you'll get 6-7% per year. This alone explains 34%-40%...


2

To avoid a constructive-sale, hold the long position for at least 60 days after the close of the short position and don't carry the short position more than 30 days past the end of the year. https://wealthstrategiesjournal.com/2016/10/21/ted-dougherty-and-lisa-sergi-tax-planning-using-the-constructive-sale-rules-when-is-a-constructive-sale-not-a-...


1

Yes, you are missing some tax rules. Many decades ago when owners held their shares in certificate form, they stored them in their safe deposit boxes. If they shorted a security in their brokerage account in order to defer taxes, it became known as Shorting Against the Box. The Taxpayer Relief Act of 1997 virtually ended this tax deferral strategy by ...


3

Entering a short position that offsets an existing long position is called shorting against the box. Since 1997, the US tax code has considered this as a constructive sale of the long position, triggering a taxable capital gain if the long position has appreciated. The purpose of the constructive sale rule is to prevent investors from locking in ...


-3

Your investments don't generate taxable events in the USA until you either generate a profit or a loss. Until that point, the IRS doesn't care how you structure your investments. The other way to do what you want to do would be what the IRS calls a "wash sale". In this, you sell the stock in one year to take the loss and apply that to your tax basis. Then ...


0

I have found a plethora of articles on the median or mean investor. If there is data for a median or mean investor, then there would also be data across the spectrum. Now we can say that such studies are not reality, but we can also use them to model reality. They must certainly be a thing. I invest in a sector based mainly on politics (whatever the ...


3

Let's assume the market is perfectly efficient such that any investor has a 50% chance of beating the S&P 500 in a particular year. Given that assumption, what would be the probability of somebody beating the market at least 12/16 years, purely by random chance? This is a simple binomial distribution. You can do the math or use a calculator online to ...


1

A bought-deal just means that the underwriter purchased the bonds (note that it purchased convertible bonds, not stock) and will sell them on the open market rather than the company selling them directly and the underwriter just just acting as an agent Is the situation good news or bad news? It's not that black and white. On one hand, the bonds were sold ...


2

You are correct – the allowances work independently, i.e. you are allowed to make both £12.5k income and £12k capital gain in a year without being liable for either income tax or capital gains tax (CGT). They taxes are, however, related in a different way: the rate of capital gains tax you pay depends on which income tax band you are in. Since you are in ...


2

Yes, the shares are taxed as you describe. The term used to describe blocks of shares purchased is a "lot". In your example you have two lots, one with 10 shares and the other with 2. If you were to sell less than 12 shares you could drill down and select which shares are actually sold, and from which lot. When selling shares you have three options: First ...


1

For instance, one source has the current market capitalization of QID at about $309 million but has the May 2018 market capitalization at about $267 million. The fund declined in price but more investors needing hedges came into the fund. Well, someone might buy the QQQ and write covered calls on it. Then they might hedge the position with the QID. Or they ...


0

I would suggest contacting Customer Support at FXPro as soon as possible, explaining the situation, and asking them about the best way of closing the account. Their Contact Us page gives several ways of getting in touch. You don't say where you are (the use of dollar amounts might suggest the US, although FXPro seems to be a UK-based company) and ...


0

A one minute chart is a effectively a derivative of price because the provider is collating 60 seconds of data and creating a data point. It's very reasonable to expect that one platform may do this faster than another. It's also possible that other technology issues can add a tiny delay to the process (server speed, clock issues, starting/ending point of ...


0

Settlement refers to the transfer of funds and the title of a security between the buyer and the seller. Equities (stocks, bonds and ETFs) have T+2 settlement whereas options and government securities are T + 1. There are some exceptions. You are only allowed to trade settled cash in a cash account. That means that with T+2, the funds from a sale will ...


0

Will E-Trade and TD-Ameritrade for example, show a different price on the minute by minute chart? It is possible they show different charts, but this is not the same question as Is a stock's price different across trading platforms? because a different price may simply be an issue i.e. of time being off on a server. There is a lot of technology ...


2

This is mostly speculation, but since nobody else has answered, I'll go ahead: It's more difficult to explain to many employees (who aren't all the kind of people who visit PF&M SE) what options even are, how to value them, and how to exercise them. So participation would probably be lower for an option-based ESPP.


1

With an equity trade, transfer of title occurs between the parties of the trade. Settlement involves not only the transfer of shares between counter parties but ownership is also recorded on the share register via a transfer agent. An option trade involves a contract created between a buyer and a seller. There is no transfer of title via a transfer agent, ...


1

Answer from https://fairmark.com/compensation-stock-options/employee-stock-purchase-plans/dispositions-of-espp-stock/: For this purpose, the grant date is normally the beginning of the offering period. Tax regulations issued in 2009 specify that in some situations the end of the offering period (when you purchase the shares) will be considered the grant ...


0

i think both have their own advantage and disadvantage. one can assure the execution and other do not assure. but none the less the trailing stop limit order are better approach as compare to stop loss. it can avoid the stop loss spikes.


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