What is a long position in options trading?
To be “long” means to own a security, and to essentially be bullish on it. A long position is to own a security and to expect it to appreciate. When people buy stocks, they are “long” those stocks. Listening to fund managers giving market commentary, you may hear them say they are “long” on China or Industrials or Apple Inc., and this means that even though they may have hedged their position with some “short” sales, their outlook for those markets is optimistic and their bullish bets outweigh their bearish ones. Continue reading...
What is a Bill of Sale?
A Bill of Sale is essentially a trumped-up receipt, unless you are in England. A Bill of Sale is a document affirming that the rights of ownership of an asset have been transferred from one party to another, in exchange for “full consideration,” which is another word for compensation or payment. A receipt from a retail transaction can be considered a Bill of Sale, but a full-fledged bill of sale should accompany large transactions like car sales and so on. The British definition of Bill of Sale, however, is somewhat different. Continue reading...
What is FOREX?
Forex is the common name for the Foreign Exchange market, an international network of currency trading that is active 24/7. Forex is by far the most active and highest-volume market in the world, because it involves large trades between international institutions in an effort to diversify or consolidate their exposure to various currencies. Individual traders can also participate, usually by trading nano-lots, which are 100-unit increments of currency. Continue reading...
Will My Pension Payments Affect My Social Security Payments?
Not in the way you’re probably thinking, but the answer may be yes. Generally speaking, the answer is no. Your Social Security payments depend on two factors only: the age you started to receive Social Security benefits, and the amount of contributions you made to Social Security over the years. Your pension comes from your employer, and Social Security comes from the government. However, your tax liabilities might depend on the combination of your pension and Social Security benefits, and you social security benefits can actually be taxed. In one of the few calculations that has not been indexed for inflation lately, if your retirement income is over a certain number, up to 85% of your social security may be subject to tax as income. Continue reading...
What is a commodity index?
Commodity indexes are also called commodity price indexes, and they are informational services which reflect the price action in a designated commodity or basket of commodities. Indexes are often tracked by mutual funds or ETFs, and these can be confused with the actual index. Indexes are computed and published by market research firms. They can serve as benchmarks against which the performance of a specific asset or an investment portfolio can be compared, or they can serve as the model that index funds seek to emulate. Continue reading...
If I Retire, Can I Keep the Health Plan My Employer Offered?
Some employers will offer legacy employees continued health care coverage even after retirement, but it is not very common these days. The costs of health care are rising too quickly for most corporations to keep up. Some corporations will continue to pay a percentage of premiums for their retirees, but more often than not it is up to the retiree to obtain their own health care. Following employment, most people are eligible for COBRA, and then later in life you can purchase plans through Medicare and Medicaid. Continue reading...
What is Bitcoin lending?
The cryptocurrency community has opened up creative options for making money in the form of lending platforms. A few forms of lending exist for cryptocurrencies at the time of this writing. One way to do it is to make your funds available in a lending market facilitated by an exchange, such as Poloniex, where you can name your interest rate and allow other traders to use your funds for trading on margin. Continue reading...
How to use the Chaikin Oscillator in trading
The Chaikin Oscillator is a volume indicator that can help traders discern if price movements are verified by changes in trading volume. When there are discrepancies, it can mean that prices are exhibiting overbought or oversold conditions. Before the Chaikin Oscillator, On-Balance Volume was the most popular indicator for the job. On-Balance Volume (OBV) is a popular leading indicator introduced in the 1960s by Joe Granville. OBV is a line built using differences between daily trading volume – in Granville’s estimation, the major driver of market behavior – adding the difference on days that the market or stock moves up and subtracting the difference on days when the market or stock moves down. It looks for instances of rising volume that should correlate with price movement, but price movement has not occurred; additionally, OBV can be used to confirm lag. Continue reading...
How to use Momentum Indicators in trading
A momentum indicator allows for a quick comparison of a security’s current price relative to its past prices using a flexible time period, allowing traders to decide the parameters. The formula to calculate momentum is M = V – Vx (where V is the current price and Vx is the closing price from x number of days ago). A current price in excess of past price is a positive momentum indicator; a lower current price represents negative momentum. Continue reading...
What is passive investing?
Passive investing relies on market indices and unmanaged approaches to investing, with the idea being that attempting to beat the market is futile, especially if such attempts involve fees and speculation. Passive investing favors buy-and-hold strategies using no-load, low-fee index funds and other securities meant to be held long-term, in a portfolio allocation suiting the investor that will usually be rebalanced over time to prevent overweighting anything. Continue reading...