What is a ratio put spread?
A ratio put spread uses multiple put contracts in a certain ratio that makes them start off delta-neutral. Ratio put spreads are similar to regular spreads, but instead of using the same number of put contracts sold short as are held long, ratio spreads are set up with more of one than the other, in a ratio such as 2:1 or 3:2. The short contracts will have different strike prices than the long contracts. Continue reading...
What are the Contribution Limits for My Money Purchase/Profit Sharing Plan?
Contributions are generally limited to 25% of employee compensation, but a small addition amount may be contributed for higher-income employees. Money Purchase plans and Profit Sharing plans are funded by employer contributions, and in general these contributions cannot exceed 25% of gross compensation. For a self-employed person or a partner in a pass-through entity, the real percentage of contributions cannot exceed 20% of net profits because self-employment taxes will reduce the amount of profits considered compensation, as will the actual contribution. Continue reading...
How is a 457 Plan Different From a 401(k)?
A 457 is only slightly different than a 401(k), but the differences can be important. Although the two plans are similar in practice, there are some very important differences. Former employees can withdraw from their accounts penalty-free after they have separated from service, even if they are under 59 ½. 457 plans must also be offered to independent contractors, which 401(k)s do not. 457 plans are offered to state and local public workers and employees of certain nonprofits.Top-hat 457 plans can also be offered to highly compensated employees without being offered to other employees, at both non-profit and for-profit businesses. Continue reading...
What is an Electronic Communication Network (ECN)?
An ECN is an alternative platform to an index for making trades. An Electronic Communication Network is a type of alternative trading system that allows for trading listed stocks and other exchange-traded products. Trading on an ECN is typically limited to institutions and broker-dealers, and trades are facilitated when the price on a buy order intersects with a price on a sell order. ECN’s must register with the SEC, and you must be a subscriber to trade on one. Continue reading...
What is Investment Advice?
Professional investment advice is highly regulated, and all publications, seminars, correspondence and recommendations between professional advisors and clients must be kept on record and hold up to scrutiny. It is easy to mislead or misinform investors who have not had a chance to educate themselves, and their very livelihoods are at stake if their money is mishandled. Investment advice can be found at the local barber shop, bleachers, and beaches, but those who want to make sure their money is handled correctly will seek professional advice. Continue reading...
Can I Purchase Individual Health Insurance?
Yes, you can purchase individual health insurance if you are not covered by an employer-sponsored plan, or if you are too old to be on your parent’s plan. You can start your search at www.healthcare.gov, though you may end up finding the best plan on your state’s exchange (if your state has a health insurance exchange. Financial aid is also available for health plans if you are below a certain income threshold. Continue reading...
What is Life Expectancy?
Life Expectancy at Birth Statistics — Found Here Life expectancy may be different for each subset of the population, based on risk factors and age. It is most commonly discussed as the average for an entire population or a specific age group, without regard for specific health risks that may be present. Life expectancy may come into play in discussions of the economy, the health of a population, or for individual planning purposes. Actuarial tables with life expectancy are published by government entities and private companies. The most basic variable will be age. Continue reading...
What Can You Buy with Bitcoin?
With every day that passes, bitcoin is becoming a more usable and accepted form of payment for a variety of goods and services, even those in the mainstream economy. To be sure, it’s arguably a long way off from being able to use bitcoin for small purchases at your local coffee shop or for big purchases like buying a house, but it is not unfathomable. The financial company Visa (ticker: V) has been working with bitcoin wallet services and various cryptocurrency exchanges to make cryptocurrency debit cards easy to acquire and use. These cards are known by names such as the Shift Card, Bitwala, BitPay, and others, partially depending on the region of the world in which they can be used. These cards allow users to transfer funds from Bitcoin wallets and immediately convert them into spendable fiat currency wherever Visa debit cards are accepted. Customers can also withdraw national currencies from Visa debit ATM machines based on bitcoin and cryptocurrency exchange rates, which often fluctuate wildly. Continue reading...
What are Fibonacci Extensions?
In Fibonacci line analysis, chartists attempt to predict how far a trend will go in a single direction, despite some minor pullbacks that do not break the overall, stronger trend (behavior known as retracements). Trends can be upward or downward and still experience this phenomenon. Fibonacci extensions are estimations of the next high after an initial push and retracement, using Fibonacci sequences as guidelines. Some investors believe that, like many naturally occurring systems in nature, mark... Continue reading...
Is there any merit to fundamental analysis of the markets?
Fundamental analysis has been around for a long time, and will probably always remain relevant. Fundamental Analysis is the oldest and most well-established market theory. Fundamental analysis is to take all the real-world information about a company into account when evaluating securities and to acknowledge that the shares are what they are: partial ownership in a company. It follows that someone should know about the company and its earnings potential. Continue reading...