Why Do Value Stocks Tend To Come Out Ahead?
Since about 1990, it has been accepted practice in the investing world to divide stocks into “growth” and “value” categories. Furthermore, over long periods, value stocks tend to have greater total returns than growth stocks. Warren Buffett’s empire is built on this fact.
Financial Spread Betting – Explained By An Example For BeginnersFinancial spread betting is a world that appeals to many but they feel a little wary about how to get into something that on the surface complicated. Financial spread betting is in reality a very simple and can be picked up quite easily. This article explains financial spread betting by showing you a simple 12 point example.
Can You Make Money In Penny Stocks?Yes, you can! But the amount of money you make in penny stocks is directly proportional both to the amount of homework you do and the amount of discipline you have. Penney stocks are one of the most volatile investments into which you will ever put a dime, capable of breathtakingly fast gains and even faster collapses.
The Four Specific Attributes of Stock Options, Part 1Every option is characterized by four specific attributes, collectively called the terms of the option (also called standardized terms). These are striking price, expiration date, type of option (call or put), and the underlying stock.
The Four Specific Attributes of Stock Options, Part 2Type of option. Understanding the distinction between calls and puts is essential to success in the options market; the two are opposites. Identical strategies cannot be used for calls and puts, for reasons beyond the obvious fact that they react to stock price movement differently. Calls are by definition the right to buy 100 shares, whereas puts are the right to sell 100 shares. But merely comprehending the essential opposite nature of the two contracts is not enough.
Judging Whether You Can Profit From a Put Option, Part 2Tip: A bargain price might reflect either a bargain or a lack of value in the option. Sometimes, real bargains are found in higher-priced options. Example: Fast Profits: You bought a put last week when it was in the money, paying a premium of 6. You believed the stock was overpriced and was likely to fall.
Judging Whether You Can Profit From a Put Option, Part 3Example: Hesitate-and Lose: You bought a put last month for 6, and resolved that you would sell if its value rose or fell by two points. Two weeks ago, the stock’s market value rose two points and the put declined to your bailout level of 4. You hesitated, hoping for a recovery. Today, the stock has risen a total of five points since you bought the put, which is now worth 1.
Judging Whether You Can Profit From a Call Option, Part 2Call buyers will lose money if they fail to recognize the requirement that the underlying stock needs to increase sufficiently in value. A mere increase is not enough if time value needs to be offset as well. With this in mind, call buyers should set goals for themselves, defining when to leave a position. The goal should relate to gain and to bailout in the case of a loss.
Judging Whether You Can Profit From a Put Option, Part 1Time works against all option buyers. Not only will your option expire within a few months, but time value will decline even if the stock’s price does not change. Buyers need to offset lost time value with price movement that creates intrinsic value in its place.
Stock TradesThe stock market is a revolutionary concept in business economics which has enabled nations to exhibit better growth rate. This is because stock markets have enabled management and organization of the stocks in an effective way.
