InvestorsFriend.com. Trading Strategies For Longer Term Investors

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "InvestorsFriend.com. Trading Strategies For Longer Term Investors"

Transcription

1 1 of 5 06/01/2013 5:50 PM Home Links Paid Subscriber Login Our Performance and Past Picks Testimonials Subcribe to Our Stock Picks Free Newsletter Our Articles About Us Contact Us InvestorsFriend.com Trading Strategies For Longer Term Investors This article explores trading strategies for use by longer-term value-oriented investors. This article does not address day trading or momentum type trading strategies. Trading issues faced by long-term investors include: - minimum size of trades to efficiently spread out trading costs - impact of buy/sell or bid/ask spreads - use of market orders versus limit orders - use of stop loss orders - using share price volatility to advantage - taking profits - income tax considerations Trading strategies involve choices and risks which may or may not pay-off. Trading strategies in several common situations are discussed below. Minimum size of trades: Trading charges for self-directed accounts at the major Canadian bank-owned brokerages are in the area of $30 per trade for up to 1000 shares. I consider $3000 to be the normal minimum size for an efficient trade. On a $3000 round-trip trade, (bought and then sold) about 2% is lost to trading fees. I consider this to be high. Even if you buy and hold, 1% is immediately lost to the trading fee. For stocks priced above $3.00, I would prefer to trade a minimum 1000 shares in order to spread out the trading charge as efficiently as possible. However, for most of us that would be unrealistic. On more predictable dividend-paying stocks, you are more likely to be hoping for a 15% return in a year as opposed to a 100% gain. In these cases the trading cost is important because a 2% round-trip trading charge can eat up a large portion of your expected gain. For highly volatile stocks, the trading charge may be the least of your worries. In this case you may be hoping for a 200% gain but also risking a 100% loss. In this case even a 5%

2 2 of 5 06/01/2013 5:50 PM round-trip trading charge may not be your biggest concern. In this case the minimum trade size is more likely to be set by the maximum amount that you are willing to risk, although you would not want to go so low as to incur a ridiculous percentage round-trip trading charge. On "penny" shares (below $2.00), the bank-owned brokerages are charging about 1.5% of the trade value, with a $30.00 minimum. In this case as long as your trade is above about $2000 (i.e. $30/0.015) then you are paying 1.5% each way or 3% for a round-trip trade. Therefore, we should try to use $2000 as the minimum trade size, with about $1000 as a lower limit. Investors should be aware of the trading charges of their particular broker and set minimum trade sizes accordingly. Impact of Bid/Ask Spreads: While broker trading commissions are a concern, they are at least highly visible. Buy/Sell spreads in contrast are rather nefarious in that they are a hidden cost of trading. For more detail see our article on understanding Bid/Ask spreads. The difference between the bid price and the ask price is the bid/ask spread and should generally be considered to be an added cost of a round-trip trade. Sometimes this cost can be avoided when you are in a position to be patient, but the risk then is that the market will move against you while you are waiting for a favorable price. Market Orders Versus Limit Orders: A market order means that you will buy immediately at the best available asking price or sell immediately at the best available bid price. A limit orders means you will buy at or below your limit (bid) price or sell at or above your limit (ask) price. A market order should generally be used when you are very motivated buy or sell and the stock is very liquid (high volumes traded and small bid/ask spread) and you entering the trade during the trading day. Since you are very motivated to buy or sell it is probably not worth the risk to try and enter a limit price to try to get a better price because the market could move against you and you could fail to make a trade that you were very motivated to make. Limit orders should always be used for stocks with very high bid/ask spreads. Even if you are happy to take the current bid or current ask, it would not be safe to enter a market order on an illiquid stock since that bid or ask might suddenly change by a material amount just as you attempt to trade.

3 3 of 5 06/01/2013 5:50 PM Limit orders should also generally be used when you are more ambivalent about making the trade. For example you think that XYZ is a probably a reasonable buy at $28 but you are a bit uncertain. In this case you might want to place a limit buy order at say $27. In this case you can take advantage of normal volatility and can often buy at the more attractive price by being patient. Sometimes though the price will rise away from you and you will miss an opportunity. Orders placed when the market is closed are a special situation. When the market is closed, a situation often arises where there a a number of bid prices that are above the lowest ask price. This can't happen when the markets are open, because the trades would have executed. When the market opens the orders where the bids and offers have "overlapped" will set the opening price. The stock market will determine a fair price at which all the overlapped orders will trade and this becomes the opening price. For example assume the closing price on a stock was $100, and assume that by the time the market is set to open there is an order to sell 1000 at $98 and another order to sell 1000 at $96, and assume there is an order to buy 2000 at $99. In this case while the market was closed these orders became overlapped. The average sell price is $97 and the buy price is $99. In this case, a fair opening price for these trades is $98. Traders may wish to avoid placing market orders when the market is closed because based on over-night news the opening price can be unpredictable. In this case it is logical to enter a Limit price. In this example if you suddenly became motivated to sell you could enter a limit sell at say $95, but you will receive the opening price if it is higher than your limit sell price. Use of Stop Loss Orders A Stop Loss order becomes an order to sell at the market as soon as any trade occurs at the specified Stop Loss price, which is set below the current market. If the market id declining sharply, the Stop Loss order could be filled at a price below the Stop Loss amount. Long-term value-oriented investors do not tend to make heavy use of stop loss orders. The reason is that these investors tend to invest based on the underlying value of the company. For these investors a price decline may signal a buying opportunity rather than a time to sell. However, there may still be merit for using stop-loss orders in some cases. The stop-loss order should be set lower than the stock would be expected to move on normal trading volatility. On a $22 stock you don't want to be sold out at $20 on normal volatility only to se the stock bounce back to $22. However, perhaps a price of $18 is outside the normal range and might be more

4 4 of 5 06/01/2013 5:50 PM indicative of bad news that is more permanent. Stop Loss orders could be used to protect against a large decline when news comes out, such as a disappointing earnings release. Stop Loss orders are much more applicable to very liquid stocks. On thinly traded stocks a stop loss order could see you filled well below the Stop Loss amount. Stop Loss order are more applicable to riskier stocks where you are not as sure about the underlying value. If you are very sure that the stock is already under-valued, then you would not want to be sold out on a Stop Loss. Using Share Price Volatility to Advantage Thinly traded shares often exhibit huge volatility. For example, for shares trading around 20 cents, you may see occasional trades at 30 cents or more and at 10 cents or less and then see the price return to 20 cents. When holding shares like this it may be advantageous to place a sell order at 50 to 100% above the current price. That way, if a some shares go out at a high rice spike, you can take advantage of it. The danger is that if there was good reason for the price increase, like a take-over offer or major good news, then you might have sold at too low a price. But as long as your sell price was well above the current market this strategy may often be advantageous. Taking Profits I believe that it usually makes sense to take some profits when gains reach 30% to 100% in a short period of time. Generally in these cases the share price has moved faster than the earnings and the stock is at least less of a bargain. A strategy of selling half the position by the time the gain has reached 100% in a short period of time, is probably sensible. However, if the company fundamentals and earnings are growing as fast as the stock price then it may not make sense to sell. Income Tax Considerations Investors in taxable accounts should be much more hesitant to take profits. In this case it may be better to risk a price decline than to accept the certain loss associated with paying income taxes. However, if the shares are clearly over-valued then it probably makes sense to take the profit and run. END November 1, 2003

5 5 of 5 06/01/2013 5:50 PM Shawn Allen, CFA, CMA, MBA, P.Eng. InvestorsFriend Inc. Click to browse all past editions of our free investment newsletter or join our list

Handbook for finding the right FX Broker

Handbook for finding the right FX Broker Handbook for finding the right FX Broker With currency trading becoming even more popular, the number of brokers is growing at a rapid rate. What should one look at when deciding which broker to open an

More information

Trading Costs and Taxes!

Trading Costs and Taxes! Trading Costs and Taxes! Aswath Damodaran Aswath Damodaran! 1! The Components of Trading Costs! Brokerage Cost: This is the most explicit of the costs that any investor pays but it is usually the smallest

More information

Market Microstructure: An Interactive Exercise

Market Microstructure: An Interactive Exercise Market Microstructure: An Interactive Exercise Jeff Donaldson, University of Tampa Donald Flagg, University of Tampa ABSTRACT Although a lecture on microstructure serves to initiate the inspiration of

More information

offering a comprehensive range of investment products and services.

offering a comprehensive range of investment products and services. Linear Investments is a global investment manager offering comprehensive range of Investments is aaglobal investment manager investment products and services Linear offering a comprehensive range of investment

More information

Short Selling Tutorial

Short Selling Tutorial Short Selling Tutorial http://www.investopedia.com/university/shortselling/ Thanks very much for downloading the printable version of this tutorial. As always, we welcome any feedback or suggestions. http://www.investopedia.com/investopedia/contact.asp

More information

For example, someone paid $3.67 per share (or $367 plus fees total) for the right to buy 100 shares of IBM for $180 on or before November 18, 2011

For example, someone paid $3.67 per share (or $367 plus fees total) for the right to buy 100 shares of IBM for $180 on or before November 18, 2011 Chapter 7 - Put and Call Options written for Economics 104 Financial Economics by Prof Gary R. Evans First edition 1995, this edition September 24, 2011 Gary R. Evans This is an effort to explain puts

More information

No duplication of transmission of the material included within except with express written permission from the author.

No duplication of transmission of the material included within except with express written permission from the author. Copyright Option Genius LLC. All Rights Reserved No duplication of transmission of the material included within except with express written permission from the author. Be advised that all information is

More information

Best ETF Trading Practices

Best ETF Trading Practices Presented by QQQ TM Also inside: 2 Why best trading practices matter 3 The value of a pretrade analysis 4 Evaluating ETFs for trading efficiency 5 Mechanics of ETF trades 5 Relationships between ETF trading

More information

Margin Trading Tutorial

Margin Trading Tutorial Margin Trading Tutorial http://www.investopedia.com/university/margin/ Thanks very much for downloading the printable version of this tutorial. As always, we welcome any feedback or suggestions. http://www.investopedia.com/investopedia/contact.asp

More information

Determining Option Price. Target Price, Strike Price, Option Premium!

Determining Option Price. Target Price, Strike Price, Option Premium! Determining Option Price Target Price, Strike Price, Option Premium! Decide on Strategy Direction, magnitude, risk! Up! Buy Calls! or! Sell Puts! or! Combo! Direction! Down! Buy Puts! or! Sell Calls! or!

More information

Trading CFDs with Trader Dealer ABN 17 090 611 680 (AFSL NO 333297)

Trading CFDs with Trader Dealer ABN 17 090 611 680 (AFSL NO 333297) Trading CFDs with Trader Dealer ABN 17 090 611 680 (AFSL NO 333297) Pages 1. Overview 3 2. What is a CFD? 3 3. Why Trade CFDs? 3 4. How Do CFDs Work? 4 4.1 Margin 4 4.2 Commission 5 4.3 Financing 6 4.4

More information

The Right Way to Assess ETFs Liquidity

The Right Way to Assess ETFs Liquidity The Right Way to Assess ETFs Liquidity Key Facts to Bear in Mind 1. When it comes to liquidity, ETF shares are not comparable with stocks. One of the key, and widely recognized, benefits of Exchange Traded

More information

Financial Markets and Institutions Abridged 10 th Edition

Financial Markets and Institutions Abridged 10 th Edition Financial Markets and Institutions Abridged 10 th Edition by Jeff Madura 1 12 Market Microstructure and Strategies Chapter Objectives describe the common types of stock transactions explain how stock transactions

More information

Intro to Forex and Futures

Intro to Forex and Futures Intro to Forex and Futures 1 Forex Trading Forex is a term meaning foreign exchange, and refers to trading the currency of one country against the currency from another country simultaneously. Over $1.4

More information

EUR/USD Trading Strategy

EUR/USD Trading Strategy EUR/USD Trading Strategy TRADING SIGNALS TRADING EDUCATION TRADING STRATEGIES Kathy Lien & Boris Schlossberg www.bkforex.com TRADING SIGNALS & TRADING EDUCATION Risk Disclosure BKForex LLC is a registered

More information

Stock Market for Beginners November 2013

Stock Market for Beginners November 2013 Stock Market for Beginners November 2013 What is a share? If you own a share, you own a portion of a company. In the same way you can see your ownership of a company as a slice of pie, cut out of a bigger

More information

Quick Guide for Trading a Ready-2-Go Model

Quick Guide for Trading a Ready-2-Go Model Quick Guide for Trading a Ready-2-Go Model Welcome to Portfolio123 s model marketplace Ready-2-Go. We have a terrific line-up of models designed by our advanced community of investors and professionals.

More information

Types of Stock Orders and Order Listing written for Economics 104 Financial Economics by Prof. Gary Evans August 30, 2010

Types of Stock Orders and Order Listing written for Economics 104 Financial Economics by Prof. Gary Evans August 30, 2010 Types of Stock Orders and Order Listing written for Economics 104 Financial Economics by Prof. Gary Evans August 30, 2010 This essay concerns how you might submit an order to buy or sell a stock, how that

More information

Trading Education. July 2014. The Five Key Elements of CFD Trading. The Five Key Elements of CFD Trading INTRODUCTION

Trading Education. July 2014. The Five Key Elements of CFD Trading. The Five Key Elements of CFD Trading INTRODUCTION READ OUR FULL RISK WARNING. Spread betting, Contracts for Differences (CFDs) & Foreign Exchange (FX) are leveraged products & carry a high level of risk to your capital as prices might move rapidly against

More information

Exchange-Traded Funds

Exchange-Traded Funds Exchange-Traded Funds Exchange Traded Funds (ETF s) are becoming popular investment vehicles for many investors. Most ETF s are cost effective, broad market funds. We have put together a layman s explanation

More information

Exchange-traded funds (ETFs) effectively blend the investment characteristics of mutual funds with the trading flexibility of individual securities.

Exchange-traded funds (ETFs) effectively blend the investment characteristics of mutual funds with the trading flexibility of individual securities. The Best buck practices stops here: for ETF trading: Vanguard Seven rules money of the market road funds Vanguard research June 2014 Joel M. Dickson, Ph.D.; James J. Rowley Jr., CFA Exchange-traded funds

More information

Investment Analysis (FIN 383) Fall 2009. Homework 2

Investment Analysis (FIN 383) Fall 2009. Homework 2 Investment Analysis (FIN 383) Fall 2009 Homework 2 Instructions: please read carefully You should show your work how to get the answer for each calculation question to get full credit The due date is Thu,

More information

COOLTRADE PERFROMANCE TIPS By Regina Guinn. Here are some things that subscribers should be aware of when running an automated trading platform.

COOLTRADE PERFROMANCE TIPS By Regina Guinn. Here are some things that subscribers should be aware of when running an automated trading platform. COOLTRADE PERFROMANCE TIPS By Regina Guinn Here are some things that subscribers should be aware of when running an automated trading platform. Run Long and Short Strategies The markets go down, often

More information

Problem Set 1 Foundations of Financial Markets Instructor: Erin Smith Summer 2011 Due date: Beginning of class, May 31

Problem Set 1 Foundations of Financial Markets Instructor: Erin Smith Summer 2011 Due date: Beginning of class, May 31 Problem Set Foundations of Financial Markets Instructor: Erin Smith Summer 20 Due date: Beginning of class, May 3. Suppose the debt holders of a cosmetics firm hold debt with a face value of $500,000.

More information

Understanding ETF liquidity and trading

Understanding ETF liquidity and trading Understanding ETF liquidity and trading ETF liquidity and trading can seem complex. For example, you may have heard that ETFs with lower average daily trading volumes (ADVs) aren t as liquid as others

More information

A Cheat Sheet to Help You Understand Investment Fees

A Cheat Sheet to Help You Understand Investment Fees A Cheat Sheet to Help You Understand Investment Fees Kate Ashford / LearnVest Nov. 19, 2015 Time Magazine Online: http://time.com/money/4120998/investment-fees-mutual-funds-etfs/ LearnVest: http://www.learnvest.com/2015/11/how-investment-fees-work/

More information

POEMS ProTrader Trading System User Guide V01/2012

POEMS ProTrader Trading System User Guide V01/2012 POEMS ProTrader Trading System Page 1 of 23 Content Page 1. Description of Orders Limit Orders 3 Stop Limit Orders 3 Iceberg 4 Contingent Orders 5 Validity of Orders 6 2. POEMS ProTrader Platform Features

More information

Liquidity in U.S. Treasury spot and futures markets

Liquidity in U.S. Treasury spot and futures markets Liquidity in U.S. Treasury spot and futures markets Michael Fleming and Asani Sarkar* Federal Reserve Bank of New York 33 Liberty Street New York, NY 10045 (212) 720-6372 (Fleming) (212) 720-8943 (Sarkar)

More information

POEMS ProTrader Trading System User Guide Ver 1.22.0 Updated on Mar 2013 PHILLIP SECURITIES PTE LTD. POEMS ProTrader Trading System.

POEMS ProTrader Trading System User Guide Ver 1.22.0 Updated on Mar 2013 PHILLIP SECURITIES PTE LTD. POEMS ProTrader Trading System. PHILLIP SECURITIES PTE LTD POEMS ProTrader Trading System User Guide Phillip Securities Pte Ltd Page 1 of 25 Content Page 1. Descriptions of Orders Limit Orders. 3 Stop Limit Orders. 3 Iceberg.. 5 Contingent

More information

What Every Retail Investor Needs to Know

What Every Retail Investor Needs to Know What Every Retail Investor Needs to Know When executing a trade in the US equity market, retail investors are typically limited to where they can direct their orders for execution. As a result, most retail

More information

50 Trading Rules for Option Traders

50 Trading Rules for Option Traders 50 Trading Rules for Option Traders Trader Psychology Rules 1. If you fail to plan, plan to fail. You must have a plan for each trade. 2. NEVER trade with money you can t afford to lose. 3. There are no

More information

These Two Words Just Made Us 37% In 3 Months. "These Two Words. Just Made Us 37% In 3 Months"

These Two Words Just Made Us 37% In 3 Months. These Two Words. Just Made Us 37% In 3 Months These Two Words Just Made Us 37% In 3 Months "These Two Words Just Made Us 37% In 3 Months" Using these "two words" in your 401k, IRA or any other investment account can make you very wealthy... What are

More information

The Stock Market for Beginners. Presenter Date

The Stock Market for Beginners. Presenter Date 1 The Stock Market for Beginners Presenter Date What is a share? If you own a share, you own a portion of a company. In the same way you can see your ownership of a company as a slice of pie, cut out of

More information

USING ORDERS TO TRADE

USING ORDERS TO TRADE INTRODUCTION PROGRAMME MODULE 3 USING ORDERS TO TRADE X This module introduces Stop and Limit orders and considers how they can be used to both open and close positions. Also covered is the difference

More information

General Risk Disclosure

General Risk Disclosure General Risk Disclosure Colmex Pro Ltd (hereinafter called the Company ) is an Investment Firm regulated by the Cyprus Securities and Exchange Commission (license number 123/10). This notice is provided

More information

TRADING GAPS TAIL STRATEGY SPECIAL REPORT #37

TRADING GAPS TAIL STRATEGY SPECIAL REPORT #37 TRADING GAPS TAIL STRATEGY SPECIAL REPORT #37 Welcome to Market Geeks special report. Today I m going to teach you a little bit about gaps, how to identify different gaps and most importantly how to put

More information

My Techniques for making $150 a Day Trading Forex *Note for my more Advanced Strategies check out my site: Click Here

My Techniques for making $150 a Day Trading Forex *Note for my more Advanced Strategies check out my site: Click Here My Techniques for making $150 a Day Trading Forex *Note for my more Advanced Strategies check out my site: Click Here The Strategy We will be looking at 2 different ways to day trade the Forex Markets.

More information

Understanding ETF liquidity and trading

Understanding ETF liquidity and trading Understanding ETF liquidity and trading ETF liquidity and trading can seem complex. For example, you may have heard that ETFs with lower average daily trading volumes (ADVs) aren t as liquid as others

More information

Testimony on H.R. 1053: The Common Cents Stock Pricing Act of 1997

Testimony on H.R. 1053: The Common Cents Stock Pricing Act of 1997 Testimony on H.R. 1053: The Common Cents Stock Pricing Act of 1997 Lawrence Harris Marshall School of Business University of Southern California Presented to U.S. House of Representatives Committee on

More information

FUNDING INVESTMENTS FINANCE 738, Spring 2008, Prof. Musto Class 4 Market Making

FUNDING INVESTMENTS FINANCE 738, Spring 2008, Prof. Musto Class 4 Market Making FUNDING INVESTMENTS FINANCE 738, Spring 2008, Prof. Musto Class 4 Market Making Only Game In Town, by Walter Bagehot (actually, Jack Treynor) Seems like any trading idea would be worth trying Tiny amount

More information

SHAREMAESTRO FTSE100 SPREAD BET STRATEGY

SHAREMAESTRO FTSE100 SPREAD BET STRATEGY SHAREMAESTRO FTSE100 SPREAD BET STRATEGY This strategy is for personal use only. ShareMaestro software is copyright and any institutions wishing to follow this strategy should contact service@sharemaestro.co.uk.

More information

Trading & Its Features

Trading & Its Features Trading & Its Features The buying and selling of futures contracts, equity shares, bonds and options is known as trading. There are several types of trading styles that persons seeking to profi t from

More information

END OF CHAPTER EXERCISES - ANSWERS. Chapter 14 : Stock Valuation and the EMH

END OF CHAPTER EXERCISES - ANSWERS. Chapter 14 : Stock Valuation and the EMH 1 EN OF CHAPTER EXERCISES - ANSWERS Chapter 14 : Stock Valuation and the EMH Q1 oes the dividend discount model ignore the mass of investors who have bought their shares with the intention of selling them

More information

Investing in onshore bonds

Investing in onshore bonds Investing in onshore bonds Open up your options with our Tailored Investment Bond Before you decide to buy, you need to know what the risks and commitments are. Read our key features document (TNB17).

More information

Day Trading Profit Like a Pro in an Hour a Day

Day Trading Profit Like a Pro in an Hour a Day Day Trading Profit Like a Pro in an Hour a Day Imagine- you could achieve any level of riches desired by spending just 1 hour per day in front of your computer trading the stock markets. No, you don t

More information

Does High-Speed Trading Hurt the Small Investor?

Does High-Speed Trading Hurt the Small Investor? Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at

More information

27PercentWeekly. By Ryan Jones. Part II in the Series Start Small and Retire Early Trading Weekly Options

27PercentWeekly. By Ryan Jones. Part II in the Series Start Small and Retire Early Trading Weekly Options By Ryan Jones Part II in the Series Start Small and Retire Early Trading Weekly Options Important My 27% Option Strategy is one of the best option trading opportunities you will come across. When you see

More information

Derivative Users Traders of derivatives can be categorized as hedgers, speculators, or arbitrageurs.

Derivative Users Traders of derivatives can be categorized as hedgers, speculators, or arbitrageurs. OPTIONS THEORY Introduction The Financial Manager must be knowledgeable about derivatives in order to manage the price risk inherent in financial transactions. Price risk refers to the possibility of loss

More information

ALFA FINANCIAL L.L.C. Licensed and Regulated by the Central Bank of the U.A.E.

ALFA FINANCIAL L.L.C. Licensed and Regulated by the Central Bank of the U.A.E. ALFA FINANCIAL L.L.C Licensed and Regulated by the Central Bank of the U.A.E. Making a world of trading opportunities accessible to you ALFA Financial L.L.C was set up to give portfolio, how to control

More information

Debunking myths about ETF liquidity

Debunking myths about ETF liquidity NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE Debunking myths about ETF liquidity May 2015 IN BRIEF Many investors believe that individual stocks and exchange-traded funds (ETFs) share similar liquidity

More information

The Stocks with the Largest Price Increase Potential. How to maximize your stock market earnings in a world full of unexpected changes?

The Stocks with the Largest Price Increase Potential. How to maximize your stock market earnings in a world full of unexpected changes? 1 The Stocks with the Largest Price Increase Potential Now every day at How to maximize your stock market earnings in a world full of unexpected changes? You make the highest earnings on the stock market

More information

I Day. article. In. you but. I just. Entry. Trend. I risk. 2.5% per. equity. a "runner" trading

I Day. article. In. you but. I just. Entry. Trend. I risk. 2.5% per. equity. a runner trading Emini Day Trading How I Day Trade for a Living I wish I had a simple answer for you but I don't. Trading is hard, very hard probably the hardest thing you' 'll ever try to do in your life and that's why

More information

FAQ. (Continued on page 2) An Investment Advisory Firm

FAQ. (Continued on page 2) An Investment Advisory Firm FAQ An Investment Advisory Firm What is QASH Flow Advantage? It is a time-tested model that includes three strategic components: A portfolio of carefully selected Exchange-Traded Funds (ETFs) for diversification

More information

Understanding Trading Performance in an Order Book Market Structure TraderEx LLC, July 2011

Understanding Trading Performance in an Order Book Market Structure TraderEx LLC, July 2011 TraderEx Self-Paced Tutorial & Case: Who moved my Alpha? Understanding Trading Performance in an Order Book Market Structure TraderEx LLC, July 2011 How should you handle instructions to buy or sell large

More information

The Options Marketplace

The Options Marketplace CHAPTER 4 The Options Marketplace INTRODUCTION Listed options trade on exchanges in a manner that is similar to the trading in listed stocks. The exchanges maintain orderly markets for listed options and

More information

1 2 3 4 5 6 Say that you need to generate $4,000 per month in retirement and $1,000 will come from social security and you have no other pension. This leaves $3,000 per month, or $36,000 per year, that

More information

CONTENTS. Chapter 1. Exploiting the Excesses of Capitalism 7. Trading 101: Buying on Bad News and Selling on Good News 19

CONTENTS. Chapter 1. Exploiting the Excesses of Capitalism 7. Trading 101: Buying on Bad News and Selling on Good News 19 CONTENTS Preface xiii Acknowledgments Introduction 1 xix SECTION I THE WORLD OF THE DAY TRADER 5 Chapter 1. Exploiting the Excesses of Capitalism 7 TheHouseEdge 9 The Bid-Ask Spread 11 SECTION II INTRODUCTION

More information

How Securities Are Traded. Chapter 3

How Securities Are Traded. Chapter 3 How Securities Are Traded Chapter 3 Primary vs. Secondary Security Sales Primary new issue issuer receives the proceeds from the sale first-time issue: IPO = issuer sells stock for the first time seasoned

More information

How to Sell Your Municipals at the Right Price

How to Sell Your Municipals at the Right Price How to Sell Your Municipals at the Right Price Back in the fifties and sixties, when the municipal bond market as we know it today was in its infancy, it was difficult to feel assured that you were getting

More information

January 2009. The 12% Letter. The World s Greatest Income Secret

January 2009. The 12% Letter. The World s Greatest Income Secret January 2009 The 12% Letter The World s Greatest Income Secret The World s Greatest Income Secret By Jeff Clark I want to introduce you to an income secret that could easily give you all the money you

More information

HOW TO SELL A STOCK BY KELLY GREEN

HOW TO SELL A STOCK BY KELLY GREEN HOW TO SELL A STOCK BY KELLY GREEN HOW TO SELL A STOCK In our first report, How to Buy a Stock, we took you step-by-step through selecting a broker and making your first trade. But we also pointed out

More information

Lecture 4: Derivatives

Lecture 4: Derivatives Lecture 4: Derivatives School of Mathematics Introduction to Financial Mathematics, 2015 Lecture 4 1 Financial Derivatives 2 uropean Call and Put Options 3 Payoff Diagrams, Short Selling and Profit Derivatives

More information

The Ultimate Guide to Buying and Selling Penny Stocks

The Ultimate Guide to Buying and Selling Penny Stocks The Ultimate Guide to Buying and Selling Penny Stocks 1 Table of Contents Part One... Introduction to Penny Stocks 3 Penny Stock Basics? 3 Why Trade Penny Stocks? 4 Where Are Penny Stocks Traded? 4 Part

More information

Client Software Feature Guide

Client Software Feature Guide RIT User Guide Build 1.00 Client Software Feature Guide Introduction Welcome to Rotman Interactive Trader 2.0 (RIT 2.0). This document assumes that you have installed the Rotman Interactive Trader 2.0

More information

CONTRACTS FOR DIFFERENCE

CONTRACTS FOR DIFFERENCE CONTRACTS FOR DIFFERENCE Cornhill Capital helps private client investors realise significant value in an innovative trading environment. Cornhill Capital Limited is a leading independent investment company

More information

JA Take Stock In Your Future Session Two

JA Take Stock In Your Future Session Two JA Take Stock In Your Future Session Two Objectives You will be able to: Identify pieces of information from a stock table (Section 2); Use that information to distinguish if the stock would be a suitable

More information

ETF trading fallacies and best practices. A practical look at Do s & Don ts in ETF trading while highlighting the need for ETF due diligence.

ETF trading fallacies and best practices. A practical look at Do s & Don ts in ETF trading while highlighting the need for ETF due diligence. About KraneShares: KraneShares is a product of Krane Fund Advisors, an asset management firm delivering China-focused exchange traded funds to global investors. ETF trading fallacies and best practices.

More information

Leverage. Chapter 1 LEVERAGE. In this chapter, you will be able to:

Leverage. Chapter 1 LEVERAGE. In this chapter, you will be able to: Chapter 1 Leverage In this chapter, you will be able to: Understand how traders magnify their profits with leverage Understand how to profit from the market when it is declining by short selling Identify

More information

The Beginner s Guide to Investing in Penny Stocks. THE BEGINNER S GUIDE to Investing in Penny Stocks

The Beginner s Guide to Investing in Penny Stocks. THE BEGINNER S GUIDE to Investing in Penny Stocks The Beginner s Guide to Investing in Penny Stocks THE BEGINNER S GUIDE to Investing in Penny Stocks TABLE OF CONTENTS Introduction...3 Chapter 1: What Are Penny Stocks?...4 Chapter 2: Upsides and Downsides

More information

Trading Basics Series

Trading Basics Series Trading Basics Series HOW DO I TRADE STOCKS.COM Copyright 2011 Trading Basics Series USING MARGIN Margin: Borrowing Money To Pay for Stocks Margin is an incredibly cheap way to borrow money from your broker

More information

22Most Common. Mistakes You Must Avoid When Investing in Stocks! FREE e-book

22Most Common. Mistakes You Must Avoid When Investing in Stocks! FREE e-book 22Most Common Mistakes You Must Avoid When Investing in s Keep the cost of your learning curve down Respect fundamental principles of successful investors. You Must Avoid When Investing in s Mistake No.

More information

The 3 Rules of Successful Swing Trading

The 3 Rules of Successful Swing Trading The 3 Rules of Successful Swing Trading Trade with the Wind at Your Back The Rule That Hits Home Runs & Be In the Right Place at the Right Time by Michele Mish Schneider, Director of Trading Research &

More information

The newest technology - unlike any other indicator How and why the Nielsen Indicators can help make you a better trader

The newest technology - unlike any other indicator How and why the Nielsen Indicators can help make you a better trader The newest technology - unlike any other indicator How and why the Nielsen Indicators can help make you a better trader - 1 - Table of Contents THE LATEST DEVELOPMENT IN ANALYSIS CAN GIVE YOU A REAL ADVANTAGE...

More information

9 Questions Every Australian Investor Should Ask Before Investing in an Exchange Traded Fund (ETF)

9 Questions Every Australian Investor Should Ask Before Investing in an Exchange Traded Fund (ETF) SPDR ETFs 9 Questions Every Australian Investor Should Ask Before Investing in an Exchange Traded Fund (ETF) 1. What is an ETF? 2. What kinds of ETFs are available? 3. How do ETFs differ from other investment

More information

Turk s ES ZigZag Day Trading Strategy

Turk s ES ZigZag Day Trading Strategy Turk s ES ZigZag Day Trading Strategy User Guide 11/15/2013 1 Turk's ES ZigZag Strategy User Manual Table of Contents Disclaimer 3 Strategy Overview.. 4 Strategy Detail.. 6 Data Symbol Setup 7 Strategy

More information

CONTROLLING. Your TRADES, MONEY& EMOTIONS. By Chris Vermeulen

CONTROLLING. Your TRADES, MONEY& EMOTIONS. By Chris Vermeulen CONTROLLING Your TRADES, MONEY& EMOTIONS By Chris Vermeulen INTRODUCTION In this condensed guide I have put together some key points which I think should be read a few times in order for these critical

More information

SAVI TRADING 2 KEY TERMS AND TYPES OF ORDERS. SaviTrading LLP 2013

SAVI TRADING 2 KEY TERMS AND TYPES OF ORDERS. SaviTrading LLP 2013 SAVI TRADING 2 KEY TERMS AND TYPES OF ORDERS 1 SaviTrading LLP 2013 2.1.1 Key terms and definitions We will now explain and define the key terms that you are likely come across during your trading careerbefore

More information

Planetary GLEN S 2 DAILY Library MOMENTUM STOCK SELECTOR LIBRARY. Introduction: Benefits: L I B R A R I E S

Planetary GLEN S 2 DAILY Library MOMENTUM STOCK SELECTOR LIBRARY. Introduction: Benefits: L I B R A R I E S Planetary GLEN S 2 DAILY Library MOMENTUM STOCK SELECTOR LIBRARY Introduction: Choosing between different stock trading strategies can be a difficult decision. When you investigate fundamentals, technicals,

More information

Strategies in Options Trading By: Sarah Karfunkel

Strategies in Options Trading By: Sarah Karfunkel Strategies in Options Trading By: Sarah Karfunkel Covered Call Writing: I nvestors use two strategies involving stock options to offset risk: (1) covered call writing and (2) protective puts. The strategy

More information

PDS TRADER MANUAL. Instructions for using the Payday Stocks Trader software. 2013 Quantum Trading Technologies. PDS Trader Manual 1

PDS TRADER MANUAL. Instructions for using the Payday Stocks Trader software. 2013 Quantum Trading Technologies. PDS Trader Manual 1 PDS TRADER MANUAL Instructions for using the Payday Stocks Trader software 2013 Quantum Trading Technologies PDS Trader Manual 1 CONTENTS Getting Started 3 Log in to the PDS Trader 3 Retrieving Market

More information

Dear DIF Broker Customer,

Dear DIF Broker Customer, Dear DIF Broker Customer, DIF BROKER SA ("DIF") is required by its regulators to provide you with certain disclosures on a periodic basis. Accordingly, we are delivering the following disclosures to you:

More information

DEALING HANDBOOK FOR FX TRADERS

DEALING HANDBOOK FOR FX TRADERS DEALING HANDBOOK FOR FX TRADERS ONLINE TRADING Trading on the QuestradeFX platforms is available 24hrs a day from 5pm ET Sundays through 5pm ET Fridays. Clients have the ability to execute trades directly

More information

Risk Disclosure Statement for CFDs on Securities, Indices and Futures

Risk Disclosure Statement for CFDs on Securities, Indices and Futures Risk Disclosure on Securities, Indices and Futures RISK DISCLOSURE STATEMENT FOR CFDS ON SECURITIES, INDICES AND FUTURES This disclosure statement discusses the characteristics and risks of contracts for

More information

CHAPTER 8: TRADING STRATEGES INVOLVING OPTIONS

CHAPTER 8: TRADING STRATEGES INVOLVING OPTIONS CHAPTER 8: TRADING STRATEGES INVOLVING OPTIONS Unless otherwise stated the options we consider are all European. Toward the end of this chapter, we will argue that if European options were available with

More information

Lecture 23: Pairs Trading Steven Skiena. http://www.cs.sunysb.edu/ skiena

Lecture 23: Pairs Trading Steven Skiena. http://www.cs.sunysb.edu/ skiena Lecture 23: Pairs Trading Steven Skiena Department of Computer Science State University of New York Stony Brook, NY 11794 4400 http://www.cs.sunysb.edu/ skiena Pairs Trading This strategy was pioneered

More information

Terms and definitions

Terms and definitions Terms and definitions Abnormal market conditions mean Fast market. Account history means a list of completed transactions and non-trading operations on the Client s account. Account type means the terms

More information

Stock Trading Systems: A Comparison of US and China. April 30, 2016 Session 5 Joel Hasbrouck www.stern.nyu.edu/~jhasbrou

Stock Trading Systems: A Comparison of US and China. April 30, 2016 Session 5 Joel Hasbrouck www.stern.nyu.edu/~jhasbrou Stock Trading Systems: A Comparison of US and China April 30, 2016 Session 5 Joel Hasbrouck www.stern.nyu.edu/~jhasbrou 1 1. Regulatory priorities for capital formation and growth. 2 The information environment

More information

Lecture 19: Brokers, Dealers, Exchanges & ECNs. Economics 252, Spring 2008 Prof. Robert Shiller, Yale University

Lecture 19: Brokers, Dealers, Exchanges & ECNs. Economics 252, Spring 2008 Prof. Robert Shiller, Yale University Lecture 19: Brokers, Dealers, Exchanges & ECNs Economics 252, Spring 2008 Prof. Robert Shiller, Yale University Brokers, Dealers Exchanges & ECNs Broker-Dealer (BD) is an organization as defined by SEC,

More information

In effect CFD s are financial derivatives, originally known as Traded Options, that allow traders to take advantage of prices moving up (long

In effect CFD s are financial derivatives, originally known as Traded Options, that allow traders to take advantage of prices moving up (long What are CFD s In finance, a contract for difference (CFD) is a contract between two parties, typically described as "buyer" and "seller", stipulating that the seller will pay to the buyer the difference

More information

Options to Invest Cash

Options to Invest Cash April 2015 Investment Update Options to Invest Cash Investors with cash holdings want to invest them in something safe that will earn at least a little interest. Money markets and short-term bond funds

More information

How to Collect a 162% Cash on Cash Return

How to Collect a 162% Cash on Cash Return How to Collect a 162% Cash on Cash Return Today we are going to explore one of the most profitable, low-risk income strategies I ve come across in my 27 years of trading. This income strategy produced

More information

Reliance Securities A Reliance Capital Company

Reliance Securities A Reliance Capital Company Reliance Securities A Reliance Capital Company Risk Management Policy April 25, 2013 SEBI, vide its circular ref. no. SEBI/MRD/DoP/SE/Cir-07/2005 dated February 23, 2005 has advised the Stock Exchanges

More information

Need a clue to short-term market direction? The premium between the Standard & Poor's 500 futures

Need a clue to short-term market direction? The premium between the Standard & Poor's 500 futures Stocks & Commodities V. 8:12 (450-452): Clues To Market Direction With The S&P 500 Premium by Jean-Olivier Fraisse, CFA Clues To Market Direction With The S&P 500 Premium by Jean-Olivier Fraisse, CFA Need

More information

Kingdom of Saudi Arabia Capital Market Authority. Examples of some violations of the Capital Market Law and its Implementing Regulations

Kingdom of Saudi Arabia Capital Market Authority. Examples of some violations of the Capital Market Law and its Implementing Regulations Kingdom of Saudi Arabia Capital Market Authority s of some violations of the Capital Market Law and its Implementing Regulations Introduction The Capital Market Authority was established to achieve a

More information

NBA 600: Day 25 Some Successes and Failures of Electronic Trading 27 April 2004. Daniel Huttenlocher

NBA 600: Day 25 Some Successes and Failures of Electronic Trading 27 April 2004. Daniel Huttenlocher NBA 600: Day 25 Some Successes and Failures of Electronic Trading 27 April 2004 Daniel Huttenlocher Electronic trading Today s Class Large changes in equity markets over 5 years Much less change in most

More information

Carry Trade Explained What Is the Carry Trade?

Carry Trade Explained What Is the Carry Trade? I The Forex Trading Formula Carry Trade Triad Trading Formula - The Introduction Carry Trade Carry Trade Explained What Is the Carry Trade? The carry trade is a trading strategy in which you simultaneously

More information

BONUS REPORT#5. The Sell-Write Strategy

BONUS REPORT#5. The Sell-Write Strategy BONUS REPORT#5 The Sell-Write Strategy 1 The Sell-Write or Covered Put Strategy Many investors and traders would assume that the covered put or sellwrite strategy is the opposite strategy of the covered

More information

Swing Trade Warrior Chapter 2. Introduction to swing trading strategies and classic swing trade patterns Options gap fill strategy We look for stocks that have made extreme moves up or down (gappers) We

More information

Chapter 5 Option Strategies

Chapter 5 Option Strategies Chapter 5 Option Strategies Chapter 4 was concerned with the basic terminology and properties of options. This chapter discusses categorizing and analyzing investment positions constructed by meshing puts

More information