Is this possible to make money in the stock market
Is this possible to make money in the stock market while the quotations are going down? And what is credit sale?
Expert
Three easy moves are here to make money while prices are going down: futures sale, purchase of put options and credit sale. Credit sale of a share means borrowing this and sell this afterwards. For case in point, we sell the share today at a specific price as €10 but we owe a share to the institution that lent this to us. If the quotation of the share goes down to 8 Euros the following week, we buy the share and provide it back to the institution which borrowed it to us and cancel out our position. In such case, we will have earned 2 Euros (the 10 Euros we earned by the sale of the share minus the 8 Euros we paid to buy this).
Meanwhile, obviously, we will owe a share to the institution that lent this to us and they will ask for several guarantees to cover the debt. Futures sale is very the same to credit sale but with the advantage which, normally, the guarantees demanded are lower. For illustration, an investor who sold a futures contract on the IBEX 35 at Friday 18th of January, while this was at 13,900 points, and closed his position with buying a futures contract the same to the one he sold on Monday 21st, when this was at 12,700, would have earned 12,000 Euros. The computation is a lot easier: 10 Euros for a point. The price fell through 1,200 points and, thus, the investor gained 12,000. But when the IBEX 36 had gone up, the investor would have lost 10 Euros for all points.
What are the various types of Corporate Bonds?
A company currently pays a dividend of $3.75 per share, D0 = 3.75. It is estimated that the company's dividend will grow at a rate of 15% percent per year for the next 2 years, then the dividend will grow at a constant rate of 7% the
Efficiency Ratios: These ratios comprise Receivables Turnover, Inventory Turnover, Asset Turnover and Net Working Capital Turnover ratios. Efficiency ratios show the utilization of Assets of the company thus as to generate Revenue that is, the best ut
Which model of frame work does not provide the very good prices for bonds?
I think Free Cash Flow (FCF) can be acquired from the Equity Cash Flow (CFac) using the relation as: FCF = CFac + Interests – ΔD. Is it true?
Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of whichrequire semiannual interest payments. Bond A has a coupon rate of 4.0%; a price qu
How must we compute the beta and the risk premium?
For an enhanced understanding of banking industry, it is significant to look at the atmosphere in which commercial banks operate. Production growth and globalization are two main forces reshaping the banking industry nowadays. The following two questions are associate
AB Restaurants has debt/equity ratio .25, and its leveraged beta is 1.5. Its tax rate is 30%, and its cost of equity is 15%. The risk-free rate is 5%. CD Restaurants has debt/equity ratio .4, and tax rate 35%. Find the cost of equity for CD.
Straddle & Strangle: In the case of shorting butterfly spread, it can be seen that the gains are limited. However, there exists another strategy known as straddle which produces unlimited gains. This strategy benefits when the trader expects that
18,76,764
1925603 Asked
3,689
Active Tutors
1434112
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!