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Showing posts from August, 2022

Demand

Demand in economics refers to a consumer's readiness to pay a particular price for goods and services as well as their desire to buy them. Demand for a good or service typically declines when its price goes up. The amount needed will rise when a product's price drops, in a similar manner. Consumers and businesses are quite familiar with the idea of demand because it makes sense and happens organically throughout the course of almost any day. For instance, when a product's pricing is low, shoppers who are keeping an eye on it will buy more of it. When costs increase, such as during a change in season, consumers may buy less or even nothing at all.

Snapchat (SNAP) Layoffs: What This Means for the Stock

Snapchat's (SNAP) shares rose as early Q3 guidance surpasses expectations, boosting those of its competitors (10.86 +0.85). After reporting early Q3 revenue guidance of roughly +8% yr/yr, Snap (SNAP +8%) moved higher today.  Today's prediction is a welcome surprise since the social media giant stated last quarter that it would not provide official quarterly guidance owing to economic uncertainty. This is especially true given that as of late July, quarter-to-date sales growth was roughly flat. SNAP's other announcements were not as optimistic, despite the focus on its preliminary revenue forecast today. SNAP confirmed yesterday's rumors that it would let go of about 20% of its workforce and that Netflix (NFLX) had appointed two SNAP executives to run its advertising division. Last quarter, SNAP drastically reduced its employment rate as part of its plan to improve its declining free cash flow. Company restructuring continues. It is also important to note that sales g

Gross Earnings

Gross earnings are the total income that an individual, household, or business has made during a certain period of time. Gross earnings for people and households are the sum of money received before any deductions for taxes or other adjustments. In the business world, it's a matter of accounting convention that refers to a public company's gross profit, or the amount remaining from total revenues for a given time period after deducting cost of goods sold (COGS).

Short Interest Ratio

Short interest ratio, known also as days to cover, is a metric used to evaluate the levels of bearish pressure affecting a stock. The greater the value, the heavier is the pressure. In order to calculate the short interest ratio, the average daily trading volume of the stock is divided by the number of shares that are shorted. Simply defined, by comparing a stock's short interest to its average daily trading volume, the ratio can instantly inform an investor if a stock is highly shorted or not. At some point stocks that are heavily shorted will start attracting buyers. If the buying pressure keeps growing, it will trigger what's called a short squeeze, a situation where short sellers are trying to get out of their short position as quickly as possible. A short squeeze will generally create a bullish wave that will lift the price significantly.

Positive Tilt

A method of investing that skews a fund or portfolio toward a certain industry, business, or project using predetermined values or norms-based criteria. Sometimes, the terms positive tilt is used in reference to sustainable investing strategy in which the portfolio will be weighted toward industries, companies, or projects with favorable environmental, social and governance (ESG) attributes.

Portfolio Manager

The person or organization in charge of choosing the investments for the portfolio to achieve its particular investment target or objective.

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

This week after a huge market down day and a spike in volatility, we are heading into the most volatile Index ETF, QQQ , for an Iron Condor . 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 be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory agency. This is not an offer to buy or sell stocks, cryptos, forex, futures, options, commodity interests or any

L Share Annuity Class

The L share annuity class is a type of variable annuity that has relatively high administrative costs but begins paying out earlier than most. It is made for investors who wish to be able to start taking money out of an account in a relatively short amount of time. Variable annuities also come in share classes A, B, C, O, and X.

Jobless Claims

Weekly statistical report by the U.S. Department of Labor that tracks the number of people who apply for unemployment insurance benefits. In terms of unemployment claims, there are two types: initial, which includes those who are filing for the first time, and continuous, which includes those who have previously been collecting unemployment benefits. Unemployment claims are a crucial early predictor of the strength of the labor market and the economy's overall health.

Morning Star Candlestick

Bullish candlestick pattern made up of three candlesticks: a large red candle, a small green with a long lower shadow (the color of the candle can be either green or red), and a large green candle. A morning star develops at the end of downtrend and marks the beginning of a reversal. It indicates a change in the prior price trend. A drop in a price downtrend and the appearance of evening star patterns both indicate that the uptrend is about to end. The evening star pattern, which is seen as a bearish indication, is the opposite of the morning star pattern.

Margin

Margin is the collateral that a trader or investor must deposit with their broker or exchange to cover the credit risk the trader or investor poses for them. By borrowing cash from their broker to pay for securities, borrowing securities to engage in short-selling transaction, or participating in a derivative contract, an investor can expose themselves to credit risk.

Growth Investing

Investment strategy that concentrates on companies and stock funds whose earnings are growing quickly and are anticipated to keep on growing.

Treasury Note

Negotiable, medium-term financial obligations with a maturity of one to ten years that are issued and guaranteed by the United States government.

Level 1

Level 1 is a data feed display used for stock trading that shows the national best bid and offer or the best bid-offer volume quotes in real-time (NBBO). Although active traders prefer to use more detailed and higher-level quotations, such as order book and market depth information, level 1 quotes provide basic information that, for the most part, is sufficient for most investors. There are three levels of quotes in the American stock market: Level 1, Level 2, and Level 3. An investor can examine these quotes to understand where the market is consolidating as well as how a particular stock is performing over time.

Income Stock

A stock that pays significant dividend yield in comparison to other stocks, and consistently and frequently increase its dividends payout. Blue chip or other well-established corporations with stable earnings and a positive financial outlook are frequently the issuers of income stocks. Because there is little incentive to reinvest earnings in a new product, they are able to pay the huge dividends. An income stock's price is strongly influenced by interest rates; as rates rise, income stocks fall in price, and vice versa.

Buyback

When a corporation buys its own outstanding shares. Commonly referred to as repurchasing shares, buyback lowers the number of shares that are accessible on the open market, often time causing the price to rise. Companies repurchase shares for a variety of purposes, including to boost the value of the shares still in circulation by cutting back on supply or to prevent other shareholders from acquiring a controlling interest. Understanding buybacks Companies invest in themselves through buybacks. Reducing market share promotes investor ownership. A firm may purchase back undervalued shares to reward investors. A repurchase improves a share's fraction of earnings because the company is positive on its existing operations. Keeping the same price-to-earnings ratio will enhance the stock price. The share repurchase reduces the quantity of shares, increasing each's value. EPS grows as P/E ratio drops or company price rises. A share repurchase shows investors that the company has emerg

👉Classic Day Trade Pattern. Here is How We Traded It

Today we cover GRFX day trade. This is a classic day trade pattern where price is up significantly in the premarket. Right after the open, price moved sideways, establishing a solid base near or above the VWAP (Volume-Weighted Average Price) for about 15-20 minutes. Eventually, price popped the intraday high/resistance level with some volume. Price stabilized above the breakout point and started trending, establishing a steady 30-degree-angle rising channel. Prior to the lunch hours, in our case just an hour later, price made a double top, and the rest of the morning session, price continued to move sideways. The double top, and the inability for price to break and move pass that resistance, suggested that the day trade was done and price would eventually pull back. That's what happened How to approach this scenario? Take profit (partial or full) and raise stops below the recent lows and/or the VWAP. In our case, we took some profit off the table and raised the stop a few penn

Custodian

A financial institution that manages the assets of mutual funds, settles all portfolio trades, and gathers the majority of the valuation information needed to determine a fund's net asset value (NAV).

Supply

A basic economic concept that refers to the total amount of a particular commodity or service that is made available to consumers. If depicted on a graph, supply can refer to the amount available at a single price or the amount available throughout a range of prices. This is directly related to the demand for an item or service at a particular price; assuming that all factors are equal, the supply offered by manufacturers will increase, if the price rises, because all businesses aim to maximize profits. When markets become saturated and there's an excess of supply, or a decrease in demand, prices will start to drop. Supply and demand are the dominating forces of market economy.

Fund

A collective sum of funds from a group of investors used for the purchase of securities. Firms in the securities sector, sometimes known as mutual fund companies, and bank trust departments (also known as collective funds) are the two primary sources of funding.

Trading Platform

A software program used to trade securities, mainly through an online broker or other type of financial intermediary, enabling investors to open, cancel, and manage their positions online.

Oversold

An asset is said to be oversold when its price has dropped significantly and there is a chance for the price to bounce. Being oversold doesn't guarantee a price rally will occur soon or at all since an oversold state might linger for quite some time. Oversold and overbought levels are identified by numerous technical indicators. These technical indicators base their evaluation on how the current price is moving in relation to earlier prices. Fundamental analysis can be used to determine whether an asset may have been oversold and has departed from its usual value measurements.

Trading Session

A trading session is a period of time that corresponds to the main daytime trading hours in a specific location, generally refer to as regular market hours. Depending on the markets and locations, market hours will vary. Individual investors and traders will typically refer to a single day of business in the local financial market, from the opening bell to the closing bell.

Law of Supply and Demand

The law of supply and demand combines two key economic theories that explain how variations in the prices (for goods, services, commodities...) affect its supply and demand. While demand declines as the price rises, supply grows. In contrast, as the price falls, supply is constrained and demand increases. On a chart, levels of supply and demand for various prices can be represented as curves. The point where these curves intersect denotes the equilibrium price, also known as the market clearing price, or the point when supply and demand are equal. This point also symbolizes the method of price discovery in the market.

Implied Volatility (IV)

The term implied volatility refers to a measurement that reflects the market's perception of the likelihood of price movements for a certain investment. Using implied volatility, which is frequently used to price options contracts, investors can forecast future movements as well as supply and demand. Implied volatility differs from historical volatility, which gauges prior market moves and their actual outcomes. Historical volatility is sometimes referred to as realized volatility or statistical volatility.

Capital Gains (or Loss) Long Term

The gain (or loss) resulting from the sale of an eligible investment that was held for more than a year at the time of sale. In contrast, investments that are sold off in less than a year may see short-term gains or losses. Short-term gains frequently receive less favorable tax treatment than long-term gains.

Balanced Fund

Mutual funds that combine common stock, preferred stock, and bonds in their portfolios to pursue both growth and income. The businesses chosen are often located in various industry and places. Balanced funds typically adhere to a defined stock and bond asset allocation , such as 70% equities and 30% bonds. Bonds are debt products with typical returns that are stable and fixed. A balanced mutual fund typically has both growth and income as part of its investing aim, which contributes to the fund's balance. Investors seeking a blend of safety, income, and modest capital growth can choose balanced mutual funds. Understanding Balanced Funds Investors might choose to invest in a balanced fund, which is a form of mutual fund that holds both equities and bonds. Mutual funds that aim for diversification own stocks for capital appreciation and bonds for income. A balanced mutual fund's portfolio will typically have between 50 and 70 percent stocks and 30 percent bonds. A balanced fund,

Candlestick Chart

Type of price chart used in technical analysis, which shows the high, low, open, and closing prices of a securities over a given time period. Before becoming well-known in the US, it was first used by Japanese rice dealers to keep track of market prices and daily momentum over three centuries ago. Based on whether the closing price is greater or lower than the opening price, the wide portion of the candlestick chart known as the body of the candle, or simply the candle, informs investors of the trade emotion for that particular time frame (red if the stock closed lower, green if the stock closed higher).

Long-Legged Doji

Candlestick pattern indicating a strong sense of indecision. A long-legged doji displays price opening a certain level, a run to the upside, a pullback to the opening price, a drop to the downside. a bounce to the opening price, and close at or near where the price opened. This price action takes place all within the same time period (daily chart, 30-minute chart, 5-minute chart...). The long-legged term refers to the length of the upper and lower shadows. The longer the shadows (legs) the stronger is the move following the eventual breakout, or breakdown.

Beta

Beta measures a security or portfolio's volatility, or systematic risk, in relation to the market as a whole (usually the S&P 500). Generally speaking, stocks with betas greater than 1 are thought to be more volatile than the S&P 500. If beta is smaller than 1 the stock(s) is less volatile. And if beta is equal to 1, then volatility is neutral. The capital asset pricing model (CAPM), which analyzes the connection between systematic risk and projected asset returns, employs beta (usually stocks). The CAPM approach is frequently used to value hazardous securities and to predict projected returns of assets while taking into account both the risk of those assets and the cost of capital. Understanding Beta A stock's volatility and risk can be quantified using beta. A greater beta indicates that the stock is more vulnerable to market fluctuations. A stock with a beta of 1.5 would hypothetically experience a 15% decline if the market as a whole dropped 10%. A stock's co

Price-to-Earnings (P/E) Ratio

The ratio for valuing a firm that compares its current share price to its earnings per share. Investors and analysts use P/E ratios to assess the relative value of a company's shares in a direct comparison. It can also be used to compare a company to its past performance or to compare broad markets over time or to one another. P/E estimates can either be forecast (projected) or trailing (backward-looking). For example the P/E ratio 1 year trailing is the price of a stock divided by its earnings from the latest year. On the other hand, the P/E ratio 1 year forecast is the price of a stock divided by its projected earnings for the coming year.

Energy Sector

A category of the stock market that includes companies that produce or supply energy. Companies engaged in oil and gas drilling, refining, and exploration and development are included in the energy sector or industry. Integrated power utility firms using coal and renewable energy are also a part of the energy sector.

Elliot Wave Theory

A technical analysis theory that is used to describe price movements in the financial market. Ralph Nelson Elliott developed the theory after observing and identifying recurring fractal wave patterns. Stock price movements and consumer behavior both exhibit waves. Waves patterns can be studies across multiple equities and industries, include stock price movements, commodity indices and even consumer behavior.

High-Frequency Trading (HFT)

High-frequency trading (HFT) is a type of trading that moves lots of orders in a short period of time using potent computer programs. It analyzes several markets and executes orders in accordance with the state of the markets using sophisticated algorithms. Generally speaking, traders with the quickest execution times are more successful than those with slower times. HFT is distinguished from other trading styles by its high order-to-trade ratios and high turnover rates. Citadel LLC, IMC, Tower Research Capital, Virtu Financial, and Tradebot are the principal high-frequency trading companies in the United States.

Stop Order

A stop order is an order to buy or sell a security when its price moves past a particular point, ensuring a higher probability of achieving a predetermined entry or exit price, limiting the investor's loss, or locking in a profit. Once the price crosses the predefined entry or exit point, the stop order becomes a market order.

Multiple Linear Regression (MLR)

A statistical method known as multiple linear regression (MLR), usually referred to as multiple regression, employs a number of explanatory variables to forecast the results of a response variable. Multiple linear regression attempts to represent the linear relationship between the independent explanatory variables and the dependent response variables. Since multiple regression takes into account several explanatory variables, it can be thought of as an extension of ordinary least-squares (OLS) regression.

Economic Cycle

The fluctuations of the economy between times of expansion (growth) and contraction (recession) are referred to as the economic cycle. The present stage of the economic cycle can be determined using variables like gross domestic product (GDP), interest rates, total employment, and consumer expenditure. Given that it directly affects everything from stocks and bonds to profits and corporate earnings, understanding the economic cycle can assist firms and investors decide whether to invest and when to withdraw their funds.

Quantitative Easing (QE)

Quantitative easing is a type of monetary policy in which a central bank, such as the United States Federal Reserve, uses to reduce interest rates. To lower interest rates and boost the amount of money in circulation, the Federal Reserve buys securities on the open market. By generating additional bank reserves, quantitative easing increases banks' liquidity and promotes lending and investment. QE policies are carried out by the Federal Reserve in the US and by the European Central Bank in Europe.

Moving Average Convergence Divergence (MACD)

A momentum trend-following indicator that displays the relationship between two moving averages of an asset's price. To calculate the moving average convergence divergence, the formula subtracts the 26-period exponential moving average (EMA) is subtracted from the 12-period EMA.

270% Gain Day Trade & 100% Gain Swing Trade: Same Stock. Same Day

NVTA reported earnings today which was the catalyst that produced an explosive 270% move in 7 hours of trading. Impressive!!! We day traded it right out of the gate as the ticker was in our focus list. At midday, the intraday pattern was so strong that it prompted the initiation of a swing trade. By the end of the day NVTA had run from $2.50 to $9, reaching all three (3) swing trade targets in just a day... What a monster! 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. Yo

Leverage

Financial leverage is the result of borrowing money to support investments that increase a company's asset base and produce returns on risk capital. The employment of various financial instruments or borrowed cash, or leverage, is an investing strategy that aims to improve an investment's potential return.

Common Stock

Security that represents ownership in a corporation. Common stocks must be issued by the corporation itself. Common stock owners choose the board of directors and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership. Common shareholders, however, do not have any rights to a company's assets in the case of liquidation until all bondholders, preferred shareholders, and other debt holders have received their full repayment. In the stockholders' equity section of a company's balance sheet, common stock is disclosed.

Sales Charge

A fee charged for the sale of certain fund shares, typically by brokers or other sales professionals. A mutual fund sales charge is limited by law to 8.5 percent of the cost of an investment. Depending on the selected fund and the amount invested, the fee may change. A sales charge is generally included in the asking or offered price charged by the broker.

Renko Chart

A type of chart of Japanese origin that is constructed utilizing price movement rather than price and predefined time periods (daily, hourly, 15-minute...) as other charts do. Given that the chart resembles a collection of bricks, it is believed to have been named after the Japanese word for bricks, renga. Each block is positioned at a 45-degree angle (up or down) to the preceding brick, and a new brick is produced when the price changes by a predetermined amount. A usual color for an up brick is white or green, whereas a common color for a down brick is black or red.

Floating Stock

The number of shares of a specific stock that are available for trading. Stocks with a low float have few shares outstanding. Floating stock is calculated by deducting closely held shares and restricted stock from the total number of outstanding shares of a company.

Price to Sale (P/S)

The price-to-sales (P/S) ratio is a measure of a company's value that compares its stock price with its sales. It serves as a gauge of how much the financial markets value each dollar of a company's sales or revenues. The price-to-sales ratio (P/S) is derived by dividing a company's market capitalization, which is calculated by multiplying the number of outstanding shares by the share price, by its 12-month total sales or revenue. The investment is more desirable the lower the P/S ratio. P/S ra a good metric for evaluating stocks.

Portfolio Holdings

Investments that are a part of a portfolio. A variety of financial instruments, such as stocks, bonds, mutual funds, options, futures, and exchange-traded funds (ETFs), may be included in a portfolio's holdings.

Inverse ETF

An inverse exchange-traded fund (ETF), also referred to as "short ETF" or "bear ETF" is one that uses different derivatives to profit from a drop in the value of a benchmark index that it is based on. Investing in inverse ETFs is comparable to holding a variety of short positions, which entail borrowing securities, selling them, and then buying them back at a lower price.

Relative Strength Index (RSI)

Technical analysis uses the relative strength index (RSI), a momentum indicator. to assess whether a security's price is overvalued or undervalued. RSI evaluates the speed and severity of recent price fluctuations. The RSI is shown as an oscillator (a line graph) on a scale from 0 to 100.

Duration

Duration is the number of years it takes for an investor to be repaid by the total cash flows of a bond. Duration can also be used to assess the price sensitivity of a bond or fixed income portfolio to changes in interest rates. Because many forms of duration measurements are also computed in years, the length of a bond is frequently confused with its term or time to maturity. However, the number of years until a bond's principal is repaid is a linear measure which is independent of interest rate fluctuations. When compared to maturity time, duration is nonlinear and increases at an ever-increasing rate.

Convertible Preferred Stocks

Convertible preferred stocks are preferred shares with an option for conversion into a specific number of common shares at a later time. The majority of convertible preferred stock is swapped at the shareholder's desire, but occasionally there is a clause that enables the business, or issuer, to force the conversion. In the end, the performance of the common stock determines the value of a convertible preferred stock.

Shadow

A candlestick shadow, or wick, which may be seen on a candlestick chart, is a vertical line that appear above and/or below the body of the candlestick. These shadows essentially represent the highest (upper shadow) and lowest (lower shadow) prices at which a securities has traded over a certain period of time. The candlestick's shadow can be compared to its wide part, which is referred to as the body of the candle. The longer is the shadow, the stronger is the reversal following that price action, once price breaks out of the consolidation period, either to the upside or downside depending on market conditions for that specific security.

Fundamental Analysis (FA)

A type of financial analysis which looks at relevant economic and financial elements to calculate the intrinsic value of a security. An investment's intrinsic value is determined by the financial health of the issuing company, as well as the general market and economic climate. Fundamental analysts look at all potential influences on a security's value, including microeconomic elements, like managerial efficiency, and macroeconomic factors, like the status of the economy and market circumstances. The ultimate objective is to arrive at a figure that an investor can use to gauge whether an asset is being undervalued or overvalued by other investors when compared with its present price.

Mid-Cap

Corporations with a market valuation (capitalization) between $2 and $10 billion are referred to as mid-cap (or mid-capitalization) companies. A mid-cap corporation, as its name suggests, is in between large-cap (or big-cap) and small-cap firms. Large-cap, mid-cap, and small-cap classifications are estimations of a company's current worth; as such, they may fluctuate over time.

Median Market Cap

The point at which half of the equities in a portfolio have a bigger market capitalization than the other half (market price times the number of shares outstanding).

Investment Stewardship

Process of working with publicly traded corporations to advance corporate governance principles that support the company's shareholders in generating long-term value. Shareholders have the chance to voice their opinions by participating in voting and engagement.

Venture Capitalist (VC)

A venture capitalist (VC) is a type of private equity investor who invests money in growing businesses in exchange for an equity ownership. This could include providing beginning capital or aiding small businesses that want to grow but lack access to equity markets.