An option gives the owner the right, but not the obligation, to buy or sell the underlying instrument(we assume stocks here) at a specified price(strike price) on or before a specified date(exercise date) in the future. (this is different for European options as they can only be exercised at the end date). Exercising the option is using that right to to buy or sell the underlying instrument.
Spot and Futures contracts are a standardized, transferable legal agreement to make or take delivery of a specified amount of a certain commodity, currency, or an asset at the current date. The price is determined when the agreement is made.
What are Mutual Funds? Pop Quiz
Why Stock and Bond Prices Move Stock and bond prices move up and down every day, sometimes by very large amounts. Before you start investing, the first thing to understand is why these price movements happen, and how to plan for them. Stock Price Movements Stock prices are often represented on a line graph that Read More…
Getting Trading Ideas The most challenging aspect of starting to invest is picking the first few stocks to add to a portfolio. Every investor has their own techniques and strategies, but we want to give you the tools you need to place your first trades, and get your portfolio off to a running start. Establish Goals Before Read More…
Margin Trading and Market Timing – High Risk Investing A margin trading account is a type of investment account offered by brokerages that allow investors to borrow money to buy securities. With a margin account, an investor can borrow funds from the brokerage firm against the value of the securities in their account. This allows Read More…
Brokerages exist to allow individuals to make investments into the larger market. In other words, they connect individuals to the markets as a whole.
Bonds are essentially a much more formal I.O.U (I owe you) used to borrow money. You buy the bond in return to interest over a given period of time. When a corporation or government needs money they issue bonds that people buy. In turn, the issuer (the person who sells the bond) takes the money. However, no one would buy something if they didn’t get something in return, so the issuer will offer to not only pay the person back at a specified date but also provide some interest along the way.
Mutual Funds are a way you can buy into a wide range of stocks, bonds, money markets, or other securities all at once. They are professionally managed, so you are basically buying a piece of a larger portfolio.
ETFs are a fairly new way that you can buy a large group of stocks, assets, or other securities all at once. ETFs trade just like stock; you can buy and sell shares of an ETF throughout the day on an exchange.
The Dow Jones Industrial Average, more frequently known as the Dow or the Dow Jones, is a stock market index made up of 30 of the largest publicly-owned companies based in the United States. It’s a price weighted index meaning that the index’s price is an average of the price of the 30 stocks that make it up.
The New York Stock Exchange (or NYSE) is the largest stock exchange in the world. Think of it as an organized, fast-paced flea market where buyers and sellers from all over the world come to trade U.S. stocks (and now some foreign shares as well). It is where over 2,800 of the biggest U.S. companies have their shares listed.
Picking Stocks – The Basics The most challenging part of starting to invest is picking the first few stocks to add to your portfolio. Every investor has their own techniques and strategies, but we want to give you the tools you need to place your first trades, and get your portfolio off to a good start. Establish Read More…
How do I build a diversified portfolio? Understanding what it means to build a diversified portfolio is one of the first concepts a new investor needs to understand. When talking about investing, diversification means to expose yourself to less risk by investing in different asset classes, industries etc. So if something bad happens to one of Read More…
Why Invest in Stocks? Can’t view on YouTube? Click Here Investing in stocks can be a great way to make your money work for you and build long-term wealth, once you have set up your budget and emergency savings fund. In this lesson, we’ll explore why investing in stocks is a smart financial decision for Read More…
Getting (and Understanding) Stock Quotes Definition A stock quote gives essential information about a particular stock at a point in time. The quote normally includes information such as the name of the company, the ticker symbol, the price, the day’s high and low prices, and the trading volume. Details Usually when you get a stock Read More…
A “Ticker Symbol” is a unique one to five letter code used by the stock exchanges to identify a company.
Stock is defined as a share of ownership in a company. If you own a company’s stock, you own a percentage of the company itself. This includes partial ownership of its assets (like equipment, vehicles, and buildings) and partial ownership if its income and profits.