Tag: Online Trading

Long Call Option Strategy for Beginners
Online Trading

Long Call Option Strategy for Beginners

There are many ways to make profit from a stock’s movement beyond putting your money in the actual stock itself with a popular one being the long call option strategy. Options provide a seemingly endless array of strategies because of the countless ways traders can combine buying and selling call options and put options at different expirations and strike prices. An option is a financial contract that allows (but doesn’t require) an individual to buy or sell an underlying security like a stock, index or exchange-traded fund (ETF) at a specified price (strike price) within a given period, usually a few weeks or months. Buying an option that gives you the right to buy shares at a later time is called a “call option,” whereas buying an option that gives you the right to sell shares at a la...
Checklist: Top Leading, Lagging & Coincident Economic Indicators
Strategy, Technical Analysis

Checklist: Top Leading, Lagging & Coincident Economic Indicators

Traders should be constantly looking for signs of whether and how current economic conditions change. Those signs are usually provided by economic indicators which are regularly reported and closely followed by traders and investors around the world. Metaphorically, depending on whether economic reports look at the economy through the windshield of a car, the side window, or the rear view mirror, they can be grouped into leading, coincident, and lagging indicators. I’ve provided a list of the top 19 economic indicators below. Let’s go through them… Leading Indicators: Looking Through the Windshield Leading indicators are a group of economic indicators that are considered to lead overall economic activity, and can therefore be used to anticipate how future market conditions will look...
Long-term vs Short-term Capital Gains Tax: What’s the Difference?
Investing, Online Trading

Long-term vs Short-term Capital Gains Tax: What’s the Difference?

When you buy and sell financial securities, you will inevitably generate profits and losses. The purchase of a stock that runs up 20% provides an excellent source of income, but with income comes taxes. There are two major tax implications that stock traders need to be aware of, which include long-term and short-term capital gains tax. Long-term capital gains require that you pay taxes on assets that are held for longer than one year, while short-term capital gains are taxes that are paid on assets held for less than one year. Within these categories of tax implications, there are several nuances as well as tax levels. What is important to understand is that depending on the length of your trade, as well as your income tax bracket, you will pay a specific level of tax to the governm...
Is Robinhood Gold Worth It?
Online Trading

Is Robinhood Gold Worth It?

Robinhood Gold is the premium membership offering from Robinhood. It costs $5 per month, and its core features are:  Research reports from Morningstar Level 2 quotes Increase your instant deposit limit Extended hours trading (pre-market and after hours) $1,000 of additional margin Changes to Robinhood Gold Robinhood changed their Gold offering back in April 2019, and the primary difference was their structuring of how their clients pay for margin. The initial iteration of Robinhood Gold charged clients a flat monthly fee for their Gold membership based on how much margin they’d like to utilize. Robinhood has since changed this and made Gold a flat-fee membership, regardless of account size. Now, all Gold members get access to $1,000 of margin if they mee...
Risk Tolerant vs. Risk Averse: Questions You Should Ask Yourself Before You Trade
Strategy, Technical Analysis

Risk Tolerant vs. Risk Averse: Questions You Should Ask Yourself Before You Trade

In finance and trading, risk tolerance is a measure of how much risk (or loss) an investor or trader is willing to withstand within their portfolio. Higher net-worth traders are typically able to stomach larger losses than those with a lower income, yet smaller trading accounts are still known to apply higher leverage ratios to increase their potential returns. Risk tolerance is a very important concept that you need to understand before you place a trade. If you have a trading account with $1,000, are you willing to risk your entire account on a few trades? Can you afford to lose the money in your trading account?  In general, no matter your risk tolerance levels, you should only trade with the money you can afford to lose. That’s why I recommend you take our trading class onlin...
Snowflake IPO Was Everything we Hoped For
Online Trading

Snowflake IPO Was Everything we Hoped For

The hot cloud software firm Snowflake ($SNOW) went public on Wednesday, September 16, and the stock went nuts. Despite its IPO price of $120 per share, the stock closed its first day of trading at $253.93 after reaching an intraday high of $319.00.  Tech IPOs are scarce, and Snowflake’s IPO is one of the most anticipated in years. And that was before Warren Buffett’s Berkshire Hathaway hopped aboard.  On a price-to-sales basis, they’re more expensive than even Zoom (95x) and Shopify (50x), which have gone parabolic in recent months. This probably serves as a strong indication that the market is starved for the upcoming tech IPOs from firms like Unity and Asana.  What Does Snowflake Do? Snowflake does data integration on the cloud. Large companies that utilize ma...
Consumer Price Index: Why it’s Important to Traders
Online Trading

Consumer Price Index: Why it’s Important to Traders

During September 2020 Federal Reserve monetary policy meeting, the central bank made a big deal of targeting its inflation objective. The Fed has determined that it needs to do whatever it can to push inflation back above its 2% target. While there are several different ways to measure inflation the most popular and widely watched in the United States is the Consumer Price Index, reported by the Bureau of Labor Statistics (BLS). What is the Consumer Price Index Bureau of Labor Statistics The consumer price index (CPI) calculates price changes for a basket of goods and services. This includes shelter, food, energy, transportation as well as, utility costs. CPI is available as far back as 1913. The Department of Labor uses a benchmark for the index based on the index average during t...
Top 10 Bitcoin Millionaires You Need to Know
Strategy, Technical Analysis

Top 10 Bitcoin Millionaires You Need to Know

The recent developments in the crypto-market space showed that cryptocurrencies can act as an important store of value in times of uncertainty, such as during the coronavirus pandemic. With that in mind, it’s no wonder that the number of bitcoin millionaires are rising like never before.  In fact, according to recent studies by Glassnode – a crypto-analytic firm – there are currently over 18,000 bitcoin millionaires with addresses that contain more than $1 million worth of bitcoin. The number of accounts that hold more than 1,000 bitcoins – also known as bitcoin whales – is growing at a steady pace in recent years. And with bitcoin continuing to hold above the $10,000 psychological support level, more investors will likely feel attracted to invest in the largest cryptocurrency in th...
What is the Wilshire 5000 Index?
Online Trading, Technical Analysis

What is the Wilshire 5000 Index?

When we hear “stock index,” we usually think of the S&P 500 or Dow Jones Industrial Average, and rightly so. Many prominent hedge fund managers refer to the S&P as their benchmark, and financial media like CNBC and Bloomberg discuss “the market” in terms of how these indices perform. But, did you know there’s a lesser-known index that Warren Buffett uses to gauge the performance of the “total market?” It’s called the Wilshire 5000. The Wilshire 5000 is a market cap-weighted stock index with roughly 3,400 U.S. based companies. The index aims to represent the entire US equity markets–from tiny $1M companies to $2T goliaths like Apple (AAPL). How Many Stocks Are in the Wilshire 5000? This might seem obvious, but it’s not. Despite the name, the Wilshire 5000 doesn’t contain 50...
The Craziest Stock Market Scandals of all Time
Online Trading

The Craziest Stock Market Scandals of all Time

Whether it’s an orchestrated short squeeze, an outright fraud, or insider trading, the stock market is wrought with scandal and controversy. And the kicker is that the public only hears about a tiny fraction of them.  Consider how many OTC pump and dump or insider trading schemes occur every week without anyone, but the parties involved hearing about it.  Today, we’re going to review some of the more interesting narratives and stories in the stock market in recent memory. Porsche Attempts to Takeover Volkswagen: The Biggest Short Squeeze of All Time Back in 2005, German sports car manufacturer Porsche announced that they were attempting to acquire competitor Volkswagen. Over the following few years, Porsche acquired a large portion of Volkswagen’s public float, pushing the p...