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What is a currency pair?
Currency exchange rates are discussed in terms of currency pairs, where you say how much of a given currency it would take to equal one unit of another currency. The single-unit currency is the “base” currency in the pair, and it appears as the second currency or denominator in the comparison. The base currency is always implied to be 1 unit, so only the value of the other currency in the pair is stated in the exchange rate quote. Continue reading...
What is the relationship between major currencies in general?
There are six major currencies traded and used as benchmarks on Forex markets: United States Dollars, Euros, Yen, British Pounds, Australian Dollars, Canadian Dollars, and Swiss Francs. There are also relationships between these and others, known as currency correlations. Currency exchange rates can be fixed or floating, and this is determined by policy within the country and how they want to value their money. Continue reading...
What does it Mean to be "Listed"?
To be “listed” means a stock has been registered and approved for trading on an exchange. The most relevant companies will aim to be listed on a major exchange, such as the New York Stock Exchange (NYSE) or the NASDAQ. Who are Venture Capitalists? Should I Listen to Commentators on Financial News Programs? Continue reading...
What are General Market ETFs?
General market ETFs seek to capture the movements of the market as a whole by tracking major market indices. General Market ETFs track the performance of major market indices such as the S&P 500 (SPY), the Dow Jones Industrial Average (DJIA), and NASDAQ-100 (QQQQ). Most funds that track indexes do so by purchasing shares of all the publicly traded companies within an index, usually proportionally weighted by the market cap of the company (but there are other popular weighting methods). Continue reading...
What is an OTC Stock?
Over-the-Counter securities transactions are done outside of formal exchanges, and the term could refer to private investments and contracts or transactions in unlisted securities, such as penny stocks. The major exchanges have requirements for being listed, pertaining mainly to the size of the company offering equity shares and the nature of the securities. Resources such as the Over the Counter Bulletin Board and "pink sheets" help to facilitate trades that cannot be performed on the largest exchanges, but there are several caveats to bear in mind. Continue reading...
Analyzing Bitcoin's Position: Insights from Top 5 Cryptocurrency Funds
Discover how Bitcoin is transitioning towards mass adoption as we delve into its current position in the market. Learn from the strategies of the top five cryptocurrency funds and understand how they're driving this change. This article provides a comprehensive analysis of Bitcoin's potential as a new asset class. Continue reading...
What is a Leveraged Loan?
A leveraged loan is a commercial loan that is generally created by a few participants, and packaged and offered by one or several investment banks. Leveraged loans are typically targeted at companies that already have a significant amount of debt and may be limited in their options to access capital elsewhere. They are considered on the higher end of the risk spectrum. Continue reading...
What is market saturation?
Market Saturation is the point at which there are few consumers that are still interested in buying a product because those who were ever likely to already have done so. Saturation can be said to exist for all similar products in a market. This may call for different strategies which could keep a company going. One is that products can be made to wear out after a certain amount of time and need replacement. Another is that the business can shift its focus to subscription or service-based income. Continue reading...
What is the CME?
The Chicago Mercantile Exchange, now known as the CME group, is the largest derivatives exchange in the world, and one of the oldest. It has historically served as a major international exchange for commodities futures and options on those futures, along with the Chicago Board of Trade and the New York Mercantile Exchange, which are now part of the CME Group. The CME Group is now comprised of what used to be several futures exchanges: CME, the CBOT, and the NYMEX. Historically these markets traded in traditional commodities and their futures, and Chicago was the most likely location for such an exchange, being at the hub of the Midwest. Continue reading...
Who Manages ETFs?
Several large and well-known investment banks and companies are major players in the ETF industry. There are several large investment houses which specialize in managing ETFs such as Barclays, ProShares, Vanguard, and Guggenheim Partners, LLC. ETFs are also managed by investment firms such as Schwab, Credit Suisse, and Eaton Vance. Even New York Life’s Mainstay Investments recently acquired Index IQ. The ETF industry has been growing rapidly in the last 10 years, with more investors choosing to use them, more ETFs on the market, and more investment companies choosing to offer them. Continue reading...
How did the better-than-expected bank earnings affect the stocks in the Dow Jones today?
📈 Major banks deliver a surprise! Better-than-expected Q2 earnings propel Dow Jones to a fresh 52-week high despite mixed retail data. From Bank of America's loan gains to Morgan Stanley's stellar performance, discover how banking triumphs impacted Wall Street today. 🔍🏦 #BankEarningsBoost Continue reading...
Should I Trust the Opinions Expressed by Various Financial Analysts?
Studies suggest that it is not wise to put too much faith in any market analyst or commentator – but it may be wise to listen to as many of them as possible. There have been many studies surrounding the predictions of financial analysts who seek to foretell the direction of the economy, particular sectors, or even individual stocks. The studies reveal that it isn’t wise to rely on the forecasts of any one commentator or analyst. Continue reading...
What is an Income Statement?
An income statement is a business’s financial statement that gives the income results from operations and non-operations activity. It is also called a profit and loss statement or a statement of operations. It is one of the major financial statements in the world of corporate accounting. The others are the balance sheet, the statement of cash flows, and the statement of shareholder’s equity. The income statement will included revenues and gains from investments and “secondary operations”, but it will not include cash flows in or out which may stem from other accounting periods. Continue reading...
A/A2 — credit rating
A — S&P / Fitch A2 — Moody’s Such ratings are given to bond issues and insurance companies, primarily, and this particular one is in the Upper Medium band of the Investment Grade ratings. Investment grade bonds are considered to have a very low possibility of default. The ratings go up to AAA/Aaa and all the way down to DDD/D, with Investment Grade bonds being in the range of AAA/Aaa to BBB-/Baa3. Continue reading...
How Do I Structure My Bond Portfolio?
There are three major ways to structure a bond portfolio: a ladder strategy, a barbell strategy, and a bullet strategy. A ladder strategy is structured by purchasing bonds of varying maturity dates, all at the same time. This means there will be several opportunities to make decisions at different dates in the future, so the owner of this portfolio keeps his or her options open to some extent, and has some liquidity over the course of the duration. A ladder might be used when rates are expected to stay about the same. Continue reading...
What is the Size of our National Debt?
The total United States national debt is $19.3 trillion as of fiscal year (FY) 2016. Total debt is near what the U.S. produces in annual GDP, and a majority of our national debt is public debt — money owed to those who have Treasury obligations. The U.S. also owes a large amount of money to foreign countries (foreign debt), but a majority of U.S. debt is held domestically. As of June 2012, the three countries who hold the most of our national debt are: Continue reading...
What is market breadth?
Market Breadth is a descriptor that is used in several market indicators such as the daily breadth, the A/D Line, the McClellan Oscillator, and Arms Index. Breadth is the relative difference in the amount of advancing stocks and declining stocks. Daily breadth is simply computed by subtracting one from the other, or creating a ratio in which one is divided by the other. Daily breadth is closely related, even interchangeable, with the Advance/Decline ratio. It can also refer to the difference between New Highs and New Lows, or Net New Highs. Continue reading...
What is a Satoshi Cycle?
This term was coined quite recently, describing the relationship between bitcoin prices and Google searches for bitcoin. Chris Burniske, a writer focused on bitcoin since his time as an analyst at ARK Invest, coined the term Satoshi Cycle in August of 2017 to describe the strong correlation between Google searches for “Bitcoin” and a subsequent price jump for the coin. The cycle he refers to is one of consumer curiosity, interest, and acceptance which drives the price up more and more. Continue reading...
How to use the Arms Index (TRIN) in trading
Richard Arms invented the analysis tool that bears his name in 1967. The Arms Index, a technical analysis indicator, is also called the TRIN (short for “Trading Index”) because it seeks to indicate overbought or oversold conditions by serving as an index of trading activity relative to price. The Arms index is calculated using readily available data from major indexes such as the S&P 500 or NASDAQ. The ratio of the number of advancing stocks (stocks whose prices are increasing) to the number of declining stocks (stocks whose prices are decreasing) is computed to give us the A/D Ratio, a market breadth indicator that is one way of viewing the daily breadth of a security. The Advance/Decline Ratio uses the same numbers as the Advance/Decline Line but presents them as a ratio instead. The AD Ratio is sometimes more useful than an AD Line, including in instances where comparing AD for different indexes which have different metrics; the ratio is the standardization with which comparisons can be made. Continue reading...
What is a currency certificate?
A currency certificate is also called a foreign exchange (Forex) certificate (FEC), and it validates that the bearer is entitled to a certain amount of foreign currency upon the redemption of the certificate, or that a certain amount of foreign currency was exchanged for it. This is not to be confused with a certificate of currency, which is proof that some types of insurance are currently in effect. Currency certificates have been historically used in countries with closed or controlled economies, such as the Soviet Union, Cuba, and China. Continue reading...