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Showing posts from May, 2022

Market Timing

A risky investing plan that involves buying and selling securities in anticipation of market circumstances.

Position Trader

Trader with a mid-long term horizon (between one and twelve months) who purchases a security in the hope that its value will increase over the long run. Unless something changes in the position's long-term outlook, position traders are not concerned by short-term price fluctuations, market volatility and world events.

Knowledge Capital

Knowledge capital is an organization's intangible value made up of its relationships, relationships, learned skills, learnt procedures, and innovations. In other terms, knowledge capital refers to all of an organization's knowledge.

Federal Reserve Board (The Fed)

The Federal Reserve System's governing body controls the nation's money supply by determining the discount rate and tightening or relaxing the economy's access to credit.

Price-to-Cash Flow (P/CF) Ratio

A stock valuation indicator used to assesses the value of a stock in relation to its operating cash flow per share. The operating cash flow (OCF) used in the ratio adds back non-cash expenditures like depreciation and amortization to net income. P/CF is particularly helpful for appraising firms with good cash flow but negative profitability due to significant non-cash charges.

Strike Price

A strike price, also known as exercise price, is the fixed price at which a derivative contract can be bought or sold when it is exercised. The strike price of a call option is the price at which the option holder can purchase the asset; the strike price of a put option is the price at which the security can be sold.

Guaranteed Bond

A guaranteed bond is a type of financial security that provides a secondary assurance by a third party, in the event that the issuer defaults due to insolvency or bankruptcy. The third party is the entity that would make interest and principal payments. A guaranteed bond may be corporate or municipal in nature. Guaranteed bonds can be backed by bond insurance companies, fund or group entities, government agencies, or the corporate parents of subsidiaries or joint ventures that are issuing bonds.

Pattern Day Trader (PDT)

The term "pattern day trader" (PDT) refers to a trader or investor who uses a margin account to execute four or more day trades in a row during a period of five working days. Within that five-day period, the total number of day trades must exceed 6% of the entire volume of trades in the margin account.

Optionable Stocks

A stock is considered to be optionable if its shares have the volume and liquidity required for an exchange to offer its options for trading. Exchanges require that certain conditions be met in order for a stock to be optionable, such as a minimum share price, number of shares outstanding, and minimum unique shareholders, among others.

Return On Investment (ROI)

Return on investment (ROI) is a performance metric used to assess an investment's effectiveness or profitability, or to compare the effectiveness of several distinct investments. ROI aims to quantify the amount of return on a specific investment in relation to the cost of the investment.

Hedge

An investment made as a hedge has the goal of lowering the risk of unfavorable asset price changes. Typically, hedging involves taking an opposite or offsetting position in a similar security.

How Day Trades Become Swing Trades. What to Look For

Today we cover two day trades that became swing: DKS and PLAB Both companies had different premarket patterns: DKS was down -30% following disappointing guidance PLAB reported earnings , it was up +8% By the end of the day, both companies had formed bullish reversal patterns:  bullish engulfing for DKS hammer breakout for PLAB Watch this video to get the technicals and what to expect moving forward. Good trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. Sha

Cyclical Stocks

Cyclical stocks are those whose price is influenced by systematic or macroeconomic shifts in the overall economy. Cyclical equities are well known for tracking an economy's boom, peak, recession, and recovery phases. The majority of cyclical stocks belong to businesses that sell consumer discretionary goods, which consumers tend to spend more on during an expansion and less on during a downturn.

Unicorn

A startup company with a valuation of over $1 billion. The term unicorn is extensively used in the venture capital industry. Venture capitalist Aileen Lee is credited with coining the term. Due to their rarity, unicorns need tremendous amount of creativity. Due to their enormous size, unicorn investors typically are private investors or venture capitalists, making them unavailable to retail investors. Although it is not required, many unicorns work their way up to being public companies.

Commodity Futures Contract

An agreement to buy or sell a fixed quantity of a commodity at a specific price on a specific date in the future. A position in the stock market can be protected or hedged using commodity futures. They can also be used to make directional bets on the underlying asset. Investors frequently mix up futures and options contracts. The holder of a futures contract is required to take action. The underlying asset must be purchased or sold at the stated price if the holder does not unwind the futures contract before it expires. The spot commodities market can be contrasted with commodity futures.

Annualized Rate of Return

The equivalent yearly return that an investment would have received during a specific period is used to determine the annualized rate of return. The returns of portfolios or composites for periods of less than a year may not be annualized, per the Global Investment Performance Standards. This prohibits the "projected" performance for the remaining part of the year. Understanding annualized return The term "annualized return," sometimes known as "annual return" or "annualized total return," refers to the geometric average of an investment's gains over the course of a year. This formula calculates the rate of return on the invested principal and ignores any free or committed funds. The annualized rate of return can also demonstrate to an investor what they would receive if the yearly rate of return was compounded over a given time periods. Note that this computation does not reveal the negative changes, volatility, or price swings that may occu

Swing Trading

Swing trading is a type of trading strategy that aims to generate gains in the short- to medium-term trading stocks, options, ETFs, or any other financial instrument, over a few days up to several weeks. Technical analysis is a main tool used by swing traders to find trading opportunities, design their trading plan, identify entry areas and plan their exit strategies. In addition to examining price trends and patterns, swing traders may also use fundamental analysis.

Index

An index measures the overall performance of a specific investment type or category by monitoring the performance of numerous investments. For example, the S&P 500 is frequently used as the standard for investors in large-cap stocks. It monitors the stock performance of 500 major American corporations.

Portfolio

A portfolio is a collection of financial assets, such as securities, bonds, commodities, cash, and cash equivalents, such as exchange-traded funds (ETFs). The common belief is that the three main components of a portfolio are equities, bonds, and cash. Although this is frequently the case, it need not be the exception. Various types of assets, such as private investments, real estate, and fine art, may be included in a portfolio. A portfolio can be held and managed either by the individual who owns it, or by a money manager, financial advisor, or other finance expert.

Repurchase Agreement

For dealers in government securities, a repurchase agreement (repo) is a type of short-term loan. In a repo, a dealer offers investors government assets for sale, typically overnight, and then buys the securities back the next day at a slightly higher price. The overnight interest rate is implicit in that modest price difference. Repos are often used to raise quick money. They are frequently used in open market operations by central banks as well. It is a repurchase agreement (repo) for the party purchasing the security and promising to sell it in the future; it is a reverse repurchase agreement (rrpa) for the party selling the security and promising to repurchase it in the future.

Penny Stock

The term penny stock refers to a company's stock that is traded for less than $5 a share. The $5 price level comes from the 1934 Securities Exchange Act, a law which was passed by the U.S. Congress to control all securities transactions involving parties other than the original issuer. The Security Exchange Act stated that equity securities with a market value of less than $5 per share could not be listed on any national stock exchange or index. Although some penny stocks are traded on significant exchanges like the New York Stock Exchange (NYSE), the majority are traded over-the-counter (OTC) using either the privately held OTC Markets Group or the electronic OTC Bulletin Board (OTCBB). OTC trades don't take place on a trading floor. All quotations are generated digitally.

Market Cycles

Trends or patterns that arise in various types markets, indices, and economic and business environments. Some equities or asset classes do better than others during a cycle because their business strategies are compatible with favorable growth circumstances. Market cycles, which show a fund's performance in both up and down markets, are the interval between two recent highs or lows of a common benchmark, such as the S&P 500, the Nasdaq 100, the Dow Jones Industrial and the Russell 2000.

Par Value

A bond's par value is the initial purchase price plus the amount that will be repaid when it matures. Normally, bonds are sold in multiples of $1,000.

Portfolio Allocation

A type of investment strategy that divides up a portfolio's assets according to a person's objectives, risk tolerance, and investment horizon in order to balance risk and reward. Equities, fixed-income, and cash and equivalents, the three primary asset classes, each have a unique level of risk and return, and as a result, each will perform differently over time, providing capital diversification and various degrees of risk protection.

Value-Style Funds

Value-style funds often invest in undervalued companies. Value funds may also choose companies with solid fundamentals whose shares are cheap but starting to rise.

Fibonacci Retracement

Based on the Fibonacci sequence, a series of continuously growing numbers where each number is equal to the sum of the two numbers before it, Fibonacci retracement levels are horizontal lines that show where support and resistance are expected to occur. A percentage is connected to each level. How much of a previous move the price has retraced is shown by the percentage. There are four Fibonacci levels for retracement: 23.6%, 38.2%, 50%, 61.8%, and 78.6%. The 50% Fibonacci ratio, 50% is one of the most commonly utilized ratios. The indication can be drawn between any two important price points, such as a high and a low, making it handy. The levels between those two spots will subsequently be created by the indicator.

Kal's Option Trade of the Week - GLD Iron Condor

This week we are going in with the Iron Condor strategy in Gold (GLD) The reason for choosing this option trade is that Gold has taken a beating over the last couple months and is extremely volatile, and we love volatility. Why? Because that means the options are expensive, and we love to Sell expensive things (and hopefully buy them back when they are cheap). Watch this video to get the trade details. Hope you enjoy it! Kal Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never

Money Flow Index (MFI)

A technical oscillator called the Money Flow Index (MFI) analyzes price and volume information to spot overbought or oversold indications in an asset. It can also be used to identify divergences that signal a change in price trend. Oscillator movement ranges from 0 to 100. The Money Flow Index, in contrast to conventional oscillators like the Relative Strength Index (RSI), integrates both price and volume data rather than just price. Because of this, some analysts refer to MFI as the volume-weighted RSI.

Portfolio Allocation

A type of investment strategy that divides up a portfolio's assets according to a person's objectives, risk tolerance, and investment horizon in order to balance risk and reward. Equities, fixed-income, and cash and equivalents, the three primary asset classes, each have a unique level of risk and return, and as a result, each will perform differently over time, providing capital diversification and various degrees of risk protection.

Cash Flow (CF)

The net amount of cash and cash equivalents coming into and going out of a business is referred to as cash flow. Money spent and money received reflect inflows and outflows, respectively. Fundamentally, a company's capacity to produce positive cash flows, or more specifically, its capacity to optimize long-term free cash flow, determines its ability to create value for shareholders (CFC). FCF is the cash a company generates from its regular business activities after deducting any funds used for capital expenditures (CapEx).

Corporate Bond

A type of financial product issued by a corporation and sold to investors to raise outside capital. The investor receives a predetermined amount of interest payments at either a fixed or variable interest rate in exchange for providing the firm with the money it requires. The bond "reaches maturity" when it stops making payments and the initial investment is refunded. The ability of the corporation to repay the bond often serves as its security, and this ability is based on its expectations for future revenues and profitability. Physical assets of the corporation may occasionally be utilized as collateral.

In The Money (ITM)

When a call option is said to be in the money (ITM), it means that it has inherent value. An option that is in the money is one that offers a chance to profit since the strike price and the current market price of the underlying asset are in close proximity to one another. A call option that is in the money allows the holder to purchase the securities for less than its current market value. If a put option is in-the-money, it allows the holder to sell the security for a higher price than it is currently trading for. Bear in mind that a trader may not always make money by exercising an option even if it is in the money because of the costs (such commissions) associated with options.

Market Indicators

Market indicators are quantitative in nature and aim to forecast market movements by interpreting stock or financial index data. Market indicators are a subgroup of technical indicators. Investors and traders utilize those indicators to help analyze the market and support their investing decisions.

What's Happening in the Crypto Market? Watch Video

Today we take a look at the technicals for Bitcoin and Ethereum. The crypto market (and stock markets globally) has been down heavily during the past several months. The current pullback is allowing price to stabilize above 52-week lows as it continues to form a base. Unless price breaks and fails to recover, we can expect price to continue the current sideways trend. Watch this video to get the technical insights. Good trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can neve

Even During Downtrend Markets, Day Trading Still Remains the Best Trading Strategy

Today we cover two day trades that had very different response to earnings : - one stock was up 12% in premarket (BMBL); - the other was down 20% in premarket (BYND). Despite the difference response following earnings , we day traded both with a positive end result. Watch this video to get the technicals. Good trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory

Evening Star

Bearish candlestick pattern used to identify when a trend is ready to change direction. Three candles make up the pattern: a large green candle, a small candle with a long upper shadow (the color can be either green or red), and a large red candle. A peak in a price uptrend and the appearance of evening star patterns both indicate that the uptrend is about to end. The morning star pattern, which is seen as a bullish indication, is the opposite of the evening star pattern.

Transfer Agent

An agent, usually a commercial bank, who is in charge of keeping track of stock, bond, and shareholder data. A transfer agent maintains a record of each registered shareholder's name, address, and the number of shares owned, as well as ensuring that certificates given for transfer are properly canceled and fresh certificates are issued in the name of the new owner.

Crash

A stock market crash is a rapid and frequently unforeseen decline in stock values. A stock market crash can be a byproduct of a significant disaster, an economic downturn, or the burst of a protracted speculative bubble. A stock market crash can also be significantly influenced by public outrage over it, which can lead to panic selling and more price declines.

Growth Company

Any company that creates considerable positive cash flows or earnings that grow significantly more quickly than the entire economy is considered a growth company. A growth company usually offers excellent potential for reinvested retained earnings. As a result, it frequently pays little to no dividends to stockholders, since it chooses to reinvest the majority or all of its earnings in growing the company instead.

American Depositary Receipt (ADRs)

The term American depositary receipt (ADR) refers to a negotiable certificate issued by a U.S. depositary bank that represents a predetermined number of shares of a foreign company's stock—typically one share. Similar to domestic shares, the ADR is traded on American stock exchanges. ADRs give American investors a chance to buy stock in foreign corporations that would not otherwise be possible. On the other hand, ADRs allow foreign corporations to draw in American money and investors without the difficulty and cost of going public on U.S. stock exchanges. ADRs are advantageous for both parties. By purchasing American Depositary Receipts (ADRs), investors in the United States can acquire exposure to the performance of stocks listed on foreign stock exchanges without having to deal with the complexities of doing business in those markets directly. Common names in business such as Royal Dutch Petroleum (the company behind Shell fuel), and Unilever are all represented. These companies,

Three White Soldiers

A bullish reversal pattern made of three green (or white) consecutive long-bodied candlesticks indicating the end of a downtrend. These candlesticks should not have long shadows and should preferably open within the body of the preceding candle in the pattern. For reference, a candlestick is green (or white) when price closes above the opening price, indicating that equities are advancing; a candlestick is red (or black) when price closes below the opening price, indicating that equities are falling.

Unlisted Security

A financial instrument that does not meet the criteria for listing on a formal exchange. Unlisted securities are traded on the over-the-counter (OTC) market and are frequently referred to as OTC securities. On the OTC market, market makers, also known as dealers, help buyers and sellers exchange unlisted assets.

Load Fund

A load fund is a mutual fund that has a commission or sales fee. The load is paid by the fund investor and goes toward compensating a sales intermediary, such as a broker, financial advisor, or investment advisor, for his/her time and knowledge spent helping the investor choose the best fund. When shares are sold, the back-end load is paid; or the back-end load can be paid for as long as the investor holds the fund. The front-end load is paid at the time of purchase (level-load). Load funds and no-load funds, which don't charge a sales commission, are the contrast to load funds.

Sustainable Development Goals (SDGs)

A United Nations (UN) initiative calls for all nations to ratify 17 goals that address issues such as poverty, inequality, climate change, environmental degradation, and peace and justice.

Stochastic RSI (StochRSI)

A technical analysis indicator that uses relative strength index (RSI) readings instead of traditional price data to calculate a number between zero and one (or zero and 100 on some charting platforms). Traders can determine if the current RSI value is overbought or oversold by incorporating RSI values into the Stochastic calculation.

Large-Cap

A corporation is referred to as large cap if its market capitalization is greater than $10 billion. Large size, or "big cap," is another term for a group of well-liked stocks that investors favor for their consistency.

Long-term Investment Strategy

A kind of investing that pays attention to underlying changes in the economy or financial markets rather than the daily swings of the stock and bond markets.

Income Fund

Type of mutual fund or exchange-traded fund (ETF) that prioritizes current income over capital gains or appreciation on a monthly or quarterly basis. These funds often invest in a range of preferred shares, stocks that pay dividends, money market instruments, and debt obligations issued by governments, municipalities, and corporations.

Fair Value

The projected price at which an object is purchased or sold when the buyer and seller voluntarily agree on a price. An individual or organization may look at real market transactions for comparable assets, estimate the asset's predicted earnings, and calculate the cost to replace the asset in order to determine the fair value of a good or financial investment.

Dow Jones Industrial Average (Dow)

The most widely used metric to measure stock market performance. The Dow Jones Industrial Average index is based on the prices of 30 actively traded blue chip stocks, primarily those of important industrial corporations.

Loads (Back-End, Front-End and No-Load)

Fees for selling mutual funds. A front-end load is paid at the time of purchase, whereas a back-end load is charged at redemption (see contingent delayed sales fee). Sales fees aren't applied to no-load funds.

Asset Class

An asset class is a collection of investments that share similar traits and are governed by the same rules and laws. Thus, the instruments that make up asset classes frequently exhibit similar market behavior. The most common asset classes are stocks, bonds and cash equivalents. Stocks, bonds, and cash equivalents are the three most popular asset classes. The Different Types of Assets The three most popular types of assets are stocks, bonds, and cash equivalents. In addition to these three, we find  real estate, commodities, futures, other financial derivatives, as well as cryptocurrencies.  Investment assets can be either physical or abstract things that investors buy and sell to make a profit in the short or long term. Experts in the field of finance consider various types of investments to be distinct asset classes that can be employed for the aim of diversification. It is widely accepted that various asset classes will behave in distinct ways in response to varying market conditio

Ex-Dividend Date

The day that a stock becomes exempt from dividends. Before the dividend is distributed to shareholders of record, there are typically three weeks.

Option Premium

The current market value of an option contract is known as an option premium. It is thus the money received by the seller (writer) of an option contract to another party. Premiums for in-the-money options are made up of intrinsic and extrinsic value. Premiums for out-of-the-money options only include extrinsic value.

Recession

A recession is a substantial, pervasive, and protracted decline in economic activity. One widely used guideline is that a recession is defined as two consecutive quarters of declining gross domestic product (GDP) in a nation. Recessions often run six months or longer, but they can last shorter periods as well.

Account Balance

The account balance is the amount of money held in a financial institution, such as a savings or checking account, at any one time. The account balance is always the net amount, which includes all debits and credits. A negative account balance shows a net debt, such as when a checking account is overdrawn. An account balance may also reflect the amount owed for recurrent payments, such as a mortgage or an electric bill. The Meaning of Account Balance You may see your net worth by subtracting your debts from your assets. When positive amounts are subtracted from negative ones, the result is sometimes called a person's "net worth" or "total wealth." Your current account balance at a bank or brokerage firm will indicate the total amount of money in that account as of a certain date. Your account balance for investments and other hazardous assets will fluctuate over time as security prices rise and decrease. A balance can also be found in many different types of fin