A wash sale violation (WSV) occurs you purchase a “substantially identical” security or option within a 60 day window around the date that you realize a loss. That's 30 days before and 30 days after the loss.
A wash sale loss is deferred and you must increase the cost basis of the violating purchase by the amount of the loss. When you close the second ...
Normal hours for the NYSE and Nasdaq is from 9:30 am to 4 pm ET.
After hours trading rules varies from broker to broker:
Some limit the time period for after hours trading
Some charge additional fees
Order types allowed varies. Stop orders and more complex orders are not allowed in the after-hours session.
There are two main issues with after hours ...
You have a investment firm do it for you in a diversified account.
They have a team of specialist dedicated to monitoring stocks, and will know about things long before you get notified.
So now you have 15 different stock in one group monitored by a team of professionals.
Of course they do charge some sort of fee, but you won't lose everything.
As you figured out, it's a diagonal spread. Buying a long dated call LEAP and writing shorter dated further OTM calls against it is often called the Poor Man's Covered Call (PMCC) because it has a similar performance to a covered call.
The advantage of a PMCC is that since less capital is necessary, it has a higher ROI and lower risk (the price of the ...
The shares bought in your first 3 transactions were all sold on Apr 15th for a gain of $67 (+40 +18 +9).
If you were to sell the 5 shares bought on May 5th for a loss in less than 31 days after the purchase made on May 10th, that would create a wash sale violation. Selling them now would not.. But that's not what you asked. You could sell the ...
When talking about stocks, we sometimes like to pretend that the prices are completely rational and entirely related to the intrinsic value of the stock. The fact of the matter is that this is not true. In reality, stock prices are affected by human psychology (and human-designed algorithms).
If a stock repeatedly approaches a particular price before ...
Point & Figure charts are useful for determining support & resistance. They only track price change and they ignore time, filtering out day-to-day market noise.
Support levels often become resistance levels:
A more in depth explanation is available here
Here's a Point & Figure chart for the past 20 months of UAL:
By not gambling, and instead investing in something with guaranteed returns (e.g. government bonds), an FDIC insured savings account, or ownership of something whose value to you remains the same regardless of what the market does (i.e. a house).
By buying put options for the stock.
A put option gives you a time-limited right to sell a stock for a specific price. Even if the actual price of the stock is below that price at the moment. This can be used as an insurance against an unexpected price drop, because it puts a maximum on how much money you can lose. But:
The put options cost you money, no ...
How to protect your investment in such situations?
If a company whose stock you own goes bankrupt, and it's a problem for you, your stock portfolio is not diversified well enough.
In fact, I would argue you should be prepared for as many as 2-3 companies whose stocks you own going bankrupt.
By understanding into what you invest.
If you ...
The classic answer to that dilemma comes from Will Rogers:
"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it."
More practical ways of reducing losses are stop loss orders and options.
Stocks are a form of real investment, much like real estate and forest. Unlike nominal investments like bonds, real investments like stocks, real estate and forest are not affected by currencies. (Well, you could argue that some financial stocks like banks might be a bit different, closer to being nominal investments than real investments.)
Consider if you ...
If this is the US then the maximum amount of margin borrowing for equities is 50%.
Lots A and B cost a total of $11,100 so that would be $5,550 borrowed (50%).
Lots C and D sold at $16 would generate $19,200 in sale proceeds so the margin loan would be paid off.
There are always people that talk about an upcoming recession, and there are always people that talk about upcoming economic booms. Looking back in time, the number of people on each side are indicator for the opposite (so the more people claim a recession is coming, the lower the chance it is true). That should tell you the value of those people's ...
Some people claimed that if a person has a million dollars (US$1 million), and spend $4000 per month, which is $48,000 or roughly $50,000 a year, then after 20 years, the person is broke (has no money).
If you have $1 million and you spend $50k a year (5% withdrawal rate), assuming that there's no growth, your money lasts 20 years. It's not a claim. It's ...
It depends on how lucky you are. Based on on analysis of historical data, there is roughly
a 20% probability that you'd be either out of money or have fewer than 5 years of remaining withdrawls left
a 40% probability that you'd have enough left to continue funding that income stream for another 5 to 20 years (your portfolio would have ...
You can buy inflation-protected securities in some countries. In the US they're called Treasury Inflation-Protected Securities or TIPS. In the UK they're called inflation-linked GILTs. With these securities, the principal amount increases by the level of "inflation", typically measured as a change in the Consumer Price Index (CPI).
Unfortunately they don't ...
After the registration of a preferred stock is accepted by the SEC and becomes effective, there is a delay prior to the listing of shares on the NYSE or NASDAQ. You will see in almost every prospectus or registration statement a clause that says “we intend to apply to have these shares listed on the NYSE under the symbol xxxxx. If this application is ...
The stock market is an auction with buyers and sellers looking to acquire different amounts of stock at any given moment in time.
If there is a net excess of buying volume, price rises. If there is a net excess of selling volume, price declines. When buying and selling is in equilibrium, price does not change.
It's simply a tug of war between supply ...
A public company does not need a majority approval from share holders to do a secondary offering.
Note that there are two types of secondary offerings. From Investopedia, What Is a Secondary Offering?
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 ...
There are two things at work here.
Let's assume you are buying 300 shares for $32*300=$9600 at a time when the fair market value is $55. At this point you realize a gain of ($55-$32)*300 = $6900. As long you as don't sell anything, there are no taxes due.
If you sell the stock right away and cash the $6900 you need to pay regular income tax on this. How ...
I have started doing option trading and as per my knowledge so far price of option rise or fall depends upon the delta.
Sorry to nitpick on the wording but the price of option rise or fall does not depend upon the delta. Premium changes because of time decay, an ex-dividend date approaching, change in implied volatility, and change in carry cost. On a ...
The 1099-B provided by E*Trade is for the sell occurred on vest date i.e, sale proceeds from the sell of 20 shares in market. The net 100 shares you received after tax should not be on the 1099-B. The cost basis of those 20 Shares is the award price on which you received RSUs. In your case you received it as an award of 0 price.
The rest 100 shares will not ...
@D Stanley spelled out the possibilities for your trade. Unless lightning strikes, this position is a goner.
A useful adjustment to be aware of for a losing position is the Long Call Repair Strategy. In short, you convert the long call to a vertical, lowering the break even point. IMO, it should be done if you can do this for no additional cost.
When you buy an option, the premium is a "sunk cost". There's no way to get that premium back. You have to hope that either the option appreciates in value so you can sell it, or that the profit at expiry is enough to cover the upfront cost.
If you now have an option that's basically worthless, you have two options: keep it and chalk it up to a lesson ...
High volume days are generally caused by the release of news. A recurring example of this is the day of an earnings announcement where volume surges but price may or may not change significantly.
Sometimes, volume surges across the board because the market is having an active day and many stocks see increased activity.
And as mentioned in the other ...
There is a misperception among those who perform analysis of items on the ticker that it is a historical record of events as they happened. That is only true for some small trades. If small trades make up a block trade, then they never appear as separate items. Block trades that complete in the day are reported by brokers to the exchanges after the event. ...
Trendlines are arbitrary lines subjectively placed on a chart which can be interpreted in a variety of ways. Much of their success comes from hindsight resulting in accurate predictions because you know what the future will be.
Technical analysis indicators provide information like support and resistance, trend, current momentum but they are a reflection ...
Other than some optimistic news from the company, what data can be researched to raise the probability of an outcome that can say the price will rebound and will go above $35.
Easy. The fundamentals.
If the stock P/E ratio is let's say 2.5, and the company is in a sustainable and growing business and does not have heavy debt, you can be almost certain that ...
Some, like me, find long time technical analysis as we see here about as relevant as horoscopes or i ching or other ways to do predictions.
There seems to be several camps of thought about this, I guess I am a ”fundamentalist”.
If the stock isn't included in the index, there is no direct connection between the stock price and the index value.
Even if the stock is part of the index there is again no direct relationship between the index and the stock price. In the case of the Dow Jones Industrial average which is made up of 30 different companies, there are many days where the ...
From what I can tell, as of writing, Kirkland has a share price around $42 and a market capitalization of around $8.8B, implying around 200M outstanding shares ($8.8B/$42, rounded to one significant figure; I'm getting the share price an market cap from different sources, so I'm not confident that they're reflecting the same exact point in time), with the ...
When Kirkland decides to buy Detour Gold with shares, Kirkland is essentially giving up ownership to a portion of itself over to Detour Gold.
Kirkland isn't giving up ownership. They're purchasing Detour and Detour shareholders will receive some number of Kirkland shares (and possibly some cash) in return, most likely at a premium to what Detour was ...
So if the last price is 50, and the bid and ask is say 46 / 57 why should I bid 47/48/49 instead of 50 and above??
The market is an auction. The bid is the highest amount that someone is willing to pay for the stock and the ask is the lowest that someone is willing to sell the stock for. If the quote is 46x57 and you are the highest bid at 46, why would ...
Settlement for equities is T+2 not T+3. Because of that, you can turn your money over faster than every 5 days because cash from closed trades will be available for use in two days.
You can make as many day trades as you want in a cash account as long as you use settled cash. Yes, you will be a day trader but you will not be subject to the Pattern Day ...
It's possible that what you are seeing is a market-on-close order (MOC). These are often used by:
ETFs who are adjusting a price imbalance b/t share price and value
Mutual funds who are raising or freeing up cash due to purchases or redemptions
Day traders who want to be flat at the end of the day
You have bought an ETF, which replicates physically or synthetically, the index that it follows.
Yes, that is the correct way. You could see for example that DeGiro is regulated by the Netherlands Authority for the Financial Markets. Ishares is a product of BlackRock which is a well-known asset manager.
My guideline is to only buy ETFs from European or ...
In the U.S. settlement for equities is T+2 or two business days.
There is no limit to how many day trades you can make in a cash account as long as you use settled funds. If you have $10k of settled cash, you could make one $10k day trade today with or if you want, ten $1k trades. Either way, you cannot trade those funds until two days from now.
iShares Core MSCI World is not an index. It is an ETF which is tied to an index, the MSCI World index.
When you want to invest in that index, buying shares from each of the companies would be an option, but a quite complicated one.
In order to avoid this hassle, iShares (resp. BlackRock) takes this burden away from you (and thousands of other people). They ...
you're right, you aren't missing anything. The whole concept of a market for company stock is fairly new and coincidental.
Ownership of a company is merely a conduit for proportional sharing in the common enterprises' profits. They are holes in the company treasury directly to you, and any transfer through these holes to you are taxed differently than other ...
The SEC requires that Large Traders report trades to the SEC on Form 13H. A large trader is defined as someone who transacts:
2 million or more shares or $20 million in a NMS security during any one day
20 million shares or $200 million during any calendar month.
The SEC also requires that
"shareholders who acquire more than 5% of the outstanding ...
Your argument is self-defeating. It boils down to this:
As a majority shareholder, you can sell the company outright to
recover your investment. This is a legitimate investment
As a minority shareholder, disregarding dividends,
the only way to recover your investment is to sell your shares to
some other "starry-eyed investor" looking to reap ...
Why do investors pay trillions for minority stakes in companies, when their only potential payback is modest uncertain dividends?
It's just paper.
The only reason is shared belief that someone else will want to pay for the paper in the future.
End of story.
Note that the classical answer to your question is:
If in the future some large entity, E, ...
Endowment manager here.
Investing works. Really.
If you think it doesn't, that's a knowledge gap. We'll close it. Now, investments earn money one of three ways: interest (on investments such as bonds or loans), dividends (on stocks), and capital gains (the increased value of the thing.) If Ford stock went from $8.10 to $8.80 in the last year, that ...
This topic came up under another chain and I was referred here. My two cents is that the stock market is zero sum.
For every buyer, there is a seller and the amount of money involved remains the same. Money just changes hands, regardless of what happens to the price of the stock. Here's a simple scenario:
There are 3 people (A, B, and C). Each one has $...
You have several good answers already, but I feel there are two important factors worth mentioning, which haven't been brought up yet.
Firstly, your assertion about investing as a majority shareholder in a single company seems to be based on this belief:
You can guarantee your own payback.
That's simply not true, in nearly any kind of investment. ...
Buying 100% of one stock is not aiming at doing trading. It's aiming to manage a business.
While the stocks trading aim at doing capital gains regularly, by multiple operations.
If you don't invest for the long term, you are not waiting for dividends to come, since you will have resold much before the day of payment.
In general, you don't want to invest ...
Say you buy 25% of a corn field, and the other 75% is owned by others that decide how to operate the whole field (for this metaphor, assume the shares of the corn field are highly liquid and can be traded at "fair" value at any time). Every year, that field produces corn that is then sold for a profit. The majority owner can do two things with those profits: ...