Investing in Bonds: A Beginner’s Guide (Part 3)
Bonds provide a fairly predictable stream of income. They are called fixed-income securities because the amount of money you receive and the dates on which you receive your payments are specified in advance. Fixed-income securities typically have a lower risk factor than stocks. Of course, any investment involves risk. Risks and Rewards of Bond Investing […]
Tips for Writing Successful Covered Calls (Part 3)
Tip 2: Don't panic if you're assigned. If you're called upon to deliver stock, it can come as a surprise. Some covered call writers worry about losing a long-held stock position this way. But you have more choices in this situation than you may realize. Let's say you've bought 100 shares of XYZ per year […]
Day Trading Rules and Leverage
What is a Pattern Day Trader? If a trader exceeds a certain number of day trades within a short period of time, the trader’s brokerage firm is required to mark the account as that of a Pattern Day Trader (PDT). Certain restrictions may apply to these accounts. Since the number of trades is such an […]
Investing in Bonds: A Beginner’s Guide (Part 4)
When you include bonds in your portfolio, you are adding diversity and offsetting potential risks to your investment. Consider these strategies as you prepare to begin bond trading. Reduce overall investment risk Stocks may go up over time, sometimes with spectacular results. But they can also stagnate, lose value, and, in rare cases, lose their […]
Tips for Writing Successful Covered Calls (Part 4)
Tip 4: Consider buy-writes. If you're attracted to covered calls as an ongoing income strategy, you can buy the stock and sell the call option in a single transaction. This is called a buy-write. Buy-writes offer more than convenience. For one thing, you reduce your market risk by not legging into the strategy. (When you […]
What You Need to Know About Buying Corporate Bonds
A corporate bond is a security issued by large, publicly traded companies. When you buy a bond, you're lending money to the company (issuer). The issuer uses bond money to fund costly business initiatives like construction, research, and manufacturing. Bonds are sometimes called fixed-income or debt securities, and are bought and sold through a brokerage […]
Investing in Options: A Beginner’s Guide (Part 1)
Options are a versatile financial instrument for investors. They are also complex and somewhat risky. It's important that you understand the basics of option trading strategy before diving in. What is an option? Options are contracts that give you the right to buy or sell an asset at a fixed price (strike price) for a […]
Bond Trading Introduction
As debt securities, bonds can provide excellent diversity to your investment portfolio. They represent money borrowed by a corporation (or government or municipality) to fund expansion, construction, and other growth-related projects. You are the bond investor, who holds an IOU from the borrower indicating you are entitled to recover your money with a specific rate […]
Investing in Options: A Beginner’s Guide (Part 3)
In the options world, there are two types of volatility: historical and implied. Historical volatility refers to how much the stock price fluctuated (high price to low price each day) over a one-year period. Since it's historical, this figure refers to past price data. If the number of data points is not stated (for example, […]
Investing in Options: A Beginner’s Guide (Part 4)
Speaking Greeks For option traders, the Greeks are a series of handy variables that help explain the various factors driving movement in option prices. Although the Greeks collectively indicate how the marketplace expects an option’s price to change, the Greek values are theoretical in nature. There is no guarantee that these forecasts will be correct. […]
