A calendar spread is a strategy also known as a horizontal spread or time spread, in which the investor uses two options contracts, with the same strike price, on the same underlying security, but with different expiration dates. The trader will “write” (sell) the near-term one (front month) and hold the one with the more distant expiration date (back month) long. This is a debit spread, since the investor will pay more to establish this position than is received from the short sale of the near-term option: longer-term options have a greater time value than short-term options. Continue reading...
“Load” mutual funds are those which have a fee structure that includes a front-end or back-end sales charge. All funds have expenses, but not all funds have loads. Loads are sales charges that are part of the fee structure of a mutual fund. Each mutual fund will typically offer a few types of shares classes to its investors, and the main difference between the share classes are their fee structures. There are front-end loads, which come out of your initial investment and can be up to 5%. Continue reading...
Earnings surprises occur when the reported quarterly or annual earnings of a company are different than they were projected to be. This could be a good surprise or a bad surprise. The price of a stock will change quickly with this new information. Positive or negative earnings surprises occur when the earnings estimates for a company in a given quarter or year turn out to be better or worse than expected. Positive surprises will naturally cause the stock price to jump up, while negative surprises will cause the price to fall. Continue reading...
Mutual funds that do not charge a front-end or back-end sales load are known as no-load funds. What are Load Mutual Funds? While no-load mutual funds do not require the investor to pay sales charges (i.e., commissions) when buying or selling that fund, it’s important to remember that nothing is free, especially in the world of financial services. The portfolio manager of the fund and his team of analysts still have their salaries, bonuses, retirement benefits, and so on, and fees are needed to pay for it. Continue reading...
Monte Carlo Simulations can help investors project future values and the impact to portfolios from market movements and cash flows. A Monte Carlo Simulation outlines the many possible outcomes of a situation with random variables, as well as the probability that any particular outcome will occur. It is used in a wide variety of professional fields from finance to engineering and even astrology. The technique has many applications in finance and is commonly used to help predict the future value of an asset when there are multiple variables involved. Continue reading...
Asset allocation tools and Monte Carlo simulators are available through broker-dealers and online services. You may wish to construct your own asset allocation, but there are asset allocation programs available which can take a lot of the uncertainty out of the process. The most famous method for analyzing and testing an allocation involves the so-called Monte Carlo simulation. This simulator helps you determine what would have happened with your portfolio if you were invested according to a particular mix of assets. Three main parameters you should consider for each asset class are: the asset’s historical performance, its volatility, and its correlation to other asset classes. Continue reading...
A general rule-of-thumb is to withdraw no more than 4% of your retirement savings per year. Since your retirement money has to last you for the rest of your life (and in most cases, your spouse’s), it’s extremely important to carefully calculate how much you can withdraw each year without risking running out of money. Retirees should avoid withdrawing more than 4% of your total retirement assets in any given year, and that’s assuming that your assets are invested for growth over time (with some equity exposure). Continue reading...
Inflation plays a crucial role in your retirement planning. Investors should anticipate 2% - 3% inflation each year, meaning that the costs of goods and services rise substantially over time. Retirees should also consider that inflation is different for different items. For instance, health care has a higher rate of inflation each year than retail goods, and the cost of home improvements generally rises faster than the cost of food. Continue reading...
Contango is when the price of a futures contract is higher than the current spot price of a commodity, and the expected future spot price. Some contango falls within the normal range, but too much is generally unfavorable. Contango means that the price of a futures contract has become inflated beyond the expected price range of a commodity. Backwardation is the word for the opposite of contango, in which futures contracts are being sold for less than the current spot price and below the probable future spot price. Some backwardation and contango is part of life and considered normal, but contango markets can have a particularly negative impact on some ETFs. Continue reading...
Unlock the secrets of stock trading timing! Discover the best hours, days, and months to buy or sell stocks. Explore historical patterns and market behavior in our comprehensive guide. Boost your trading strategies now! Continue reading...
The Monte Carlo simulation method, named after the famed Monaco casino, is a powerful tool to model the probability of diverse outcomes in uncertain processes. This technique, involving random variables, is pivotal in understanding and managing risk and uncertainty across various sectors. Continue reading...
Several forms of fees and expenses may be charged to those who own, buy, or even sell mutual funds. With mutual funds, there two types of charges that might be paid by the investor: expenses and fees. Different types of share classes may have different types structures to their fees and expenses. Expenses are the operating costs of the fund company, essentially, and these show up in all mutual funds, usually labeled as expense ratios. The returns reported by the fund will be after expenses. Continue reading...
Unlock the world of S&P 500 Futures options! Discover the unique features that set them apart from traditional stock options. Learn about the underlying asset, multiplier effect, pricing logic, and more in our comprehensive guide. Whether you're an experienced trader or new to options, this knowledge can elevate your investment strategy. Dive in now! 📈💼 #S&P500 #OptionsTrading Continue reading...
A breakpoint generally refers to a level of investment at which the fee structure changes. For mutual funds, it can mean a level that triggers a reduced sales load. An investor can either hit the breakpoint at the time of original investment or in some cases can sign a letter of intent to reach a certain investment level and qualify for the reduced fee that way. There may be multiple breakpoints for an investment, with the fee falling at each one. Continue reading...
Business process outsourcing (BPO) has emerged as a pivotal strategy for modern businesses looking to streamline operations, reduce costs, and gain a competitive edge in today's fast-paced global economy. This article delves into the essence of BPO, exploring its various facets, benefits, and potential drawbacks. Continue reading...
Lenders have a different par rate for different types of borrowers, which is the base around which they have the ability to negotiate deals. The par rate will be based on the prevailing interest rate environment, with factors changing it slightly for different potential borrowers and the risk associated with them based on creditworthiness. Par rate is the fair market value of a loan for a person with certain risk characteristics, from a lending institution of certain size and qualities. The par rate is the reference point around which a borrower and a lender will strike a deal, even though this is often unknown to the borrower. If the lender, which might be a bank loan officer or a mortgage broker, gives the borrower a break on the front-end cost of the loan, the borrower might have some interest tacked on to the par rate to make up for it. Continue reading...
The easiest way to start trading is Tickeron's Daily Trade Signals with Odds of Success. Scroll down the Daily Trade Signal feed to review each tile separately. One tile is one signal. Signals are based on indicator alerts, price and volume actions, big market cap moves, insider trading information, patterns, trends, etc... This feed only shows trade signals with good odds of success. Signals are calculated overnight for all asset classes and setups. Continue reading...
Barclays Bank, a titan in the financial world, offers a blend of traditional banking and modern rewards that sets it apart. While giants like Visa and Mastercard dominate the credit card scene, Barclays carves its niche with competitive interest rates, no minimum deposit mandates, and a suite of credit card rewards that cater to diverse financial needs. However, it's not just about the offerings; Barclays' online-only model and acclaimed mobile app make banking a breeze for the digital-savvy user. But every coin has two sides. The absence of physical branches might deter some, and the exclusive nature of certain services could be a constraint for others. Dive deeper into this comprehensive review to unravel the intricacies of Barclays Bank and determine if it's the right financial partner for you. Continue reading...
Mutual funds come in many varieties, but here are some basics to keep in mind to help you find your way. While most people have definitely heard the term mutual fund, many people do not understand how they work and how to use them. With over 10,000 mutual funds available in the marketplace today, the average person may have a hard time selecting appropriate mutual funds for his or her portfolio, determining a good asset mix, and understanding all of the charges associated with buying, owning, and selling mutual funds. Continue reading...