Tag: Stock

What You Need To Know About Employee Stock Options

You may have heard the mention about employee stock options quite a few times, but may have wondered what these are exactly and how you as a common employee can actually benefit from it. Let us learn in this article about the whole concept of employee stock options (ESO) and how they can be of great benefit to you.

What Is An Employee Stock Option?

Employee stock options (ESO) are contracts granted to specific employees of a certain company that give rights to trade shares in the company at a fixed price and within an indicated time period. Unlike a typical option traded in the exchange however, there is no put component included.

The basic goal for this type of concept is actually to boost business within an institution. By giving employees the benefit to buy option shares of the company that they work for, they would be motivated to strive harder and work for good business production. In theory, when stocks go up, and when employees perform at their best to ensure that their investments would pay off, then business would reach its peak of high performance.

Even if the theory mainly tries to align the incentives between the major shareholders of a company and the employees, many critics have pointed out however, that there is an enormous difference between owning an option and actually owning the underlying stock.

In cases wherein stocks go down, the owner of an option would lose the opportunity of a bonus gain, but would not necessarily experience the same loss of investment from an actual stockholder. But still, at the moment, this system has proven to be of very big help to a lot of major companies in the world.

How Do I Exercise My Employee Stock Option?

The thing that people have to know about exercising employee stock options is that in most companies, there are no brokerage firms available and so, you have to do most of the work on your own.

A stock needs to be purchased by a licensed representative. And so, you have to call a broker to inform them that you are interested in exercising your options. They can do all the needed paperwork for you and can even contact your company to speed up the ongoing transaction.

Most people would opt to exercise through a cashless method in which you can use margins to purchase stocks instead of cash. Margins are actually loans that are granted by departments because they guarantee quick repayments and take not that there are not interests assessed.

Once you have made the purchase and have sold your stock, you can pay for your loan as well as the taxes. Just make sure that the portion required for you to sell is small enough for you to be able to retain profit.

Employee stock options are great tools that benefit both the company and its employees. It is a great way to ensure productivity and fluidity within an institution’s financial market and this can provide many opportunities for gains to a lot of people.

If you are one of those that work for huge companies who offer ESOs, take the opportunity to invest. This may not always be as easy, but once you know how to smartly handle such trades, then this can surely give you much promise for a good and promising investment.

What You Should Know About The Stock Trading Robot

For many individuals, trading stocks can be a very difficult and confusing arena to enter. Many first time investors are allured to try out this endeavor, only to find their selves losing a lot of money. To add to this, many traders may realize that finding good help can be quite difficult.

It is a good thing however that technology has outdone itself these days, and many hi-tech computer programs have been created to cater to the very dilemma that a lot of these traders experience.

One of the leading software programs out in the market today is the stock trading robot, otherwise nicknamed as “Marl.” This software has been created to help traders generate more profit by many advanced features that make trading a lot faster and easier.

What Is A Stock Trading Robot?

Marl or the Stock Trading Robot is a unique software program that makes use of advanced mathematical algorithms to help an investor by collecting and analyzing market data. Basically, the program scans through the current trends in the stock market and helps the investor decide on which stocks are the best ones to trade.

Some of Marl’s features may include the ability to analyze 7 stock charts per second as well as process about 1,986,832 mathematical calculations every second. The program also consists of feedback loops that can help itself update and perfect its trading formula and it can be very selective to choose the best for the trader.

The program boasts a lot of advanced features, but the bottom line is that it basically speeds up the process of trading by analyzing the data faster and offering traders good information to aid in decision-making. It also basically does all these things with great accuracy and objectivity.

How Should The Robot Help You?

However advanced Marl can be, what you should know to become successful in your trades is to not totally depend on the program. Remember that although this software can provide very significant assistance to make things easier for you, the decisions ultimately still lie on your hands.

If you are already using or about to use Marl for trading, take advantage of its analyzing and recommendation skills to provide you with good information about trends and patterns in the stock market. But make sure that you also weigh things on your own and consider if the stocks you are about to invest on are really worth the money.

A lot of people consider Marl a scam because despite using it, they still suffer from significant losses in the market. But remember, that most of these people have also been foolish enough to rely so much on a computer program instead of making use of their own decision-making skills.

Technology has really outdone itself through Marl. But like any other software system out in the market today, the stock trading robot still carries certain flaws and has not yet been fully perfected.

If you are interested in making use of this advanced software program, enjoy the liberty to maximize its potentials in analyzing data and in giving you recommendations. But never lack out in your own actual research and strategic attempts to make the best trades possible. If you do this, you might just be able to gain so much profit and lessen so many risks.

Stock Trading – When Should You Sell Stocks?

Among many stock traders, one mistake commonly made is that investors may often exhaust themselves on merely thinking about buying stocks without foreseeing that there may come a time that they may need to let go of such stocks for lucrative reasons. Sometimes, you may realize that selling can really be more practical than holding on to something that may cost you more in the long run. Let us learn why and when you should sell stocks.

When Your Stock Investment Is No Longer Doing Well

One very major reason that you may need to consider selling your investment is when it has gone sour by underperforming in the market. There may come a time when investing on certain stocks may even cost you more than the actual gains that you get in return.

There are times however, when you do not necessarily have to sell within the instant. Make sure that you check possible reasons why your stock has not been doing well, certain factors like the wrong market timing or the occurrence of certain changes within the company may normally cause some decline in stock behavior.

But when you have noticed that your stock has not been meeting your expectations for a consecutive number of trading quarters, and then it may certainly be wiser to just save yourself from a bad investment.

When A Better Opportunity Presents Itself

Another good reason to sell your stock is when there is a better opportunity available in the market. This is a frequent reason for many people to sell stocks and may create a churning in an investor’s portfolio, which may mean that the investor’s account extremely active through frequently purchasing and selling in order to generate profits.

As what has been previously mentioned, once you believe that an investment has truly gone sour and it would be quite difficult to rise above the decline, then the best option for you would certainly be selling and looking for better opportunities available.

When Your Reason For Investing Is No Longer There

Lastly, another of the most common reasons why you should sell your stock is when you have lost your belief in your investment. If you have lost or have already met your reasons for investing, then, it may be normal for you to feel that you should sell your stock.

There may be many reasons for you to invest on stocks and some of these may perhaps be the possibility that you want to gain commissions from a certain company or perhaps you truly believe in a certain company’s product.

However, when the time comes wherein you no longer believe in investing in your stocks or you have lost your reasons to do so, then selling your shares may be the right thing to do.

It is only smart if you are an investor to not only think about purchasing or buying stock shares and to stop at that. There really must be a certain degree of preparation on your part to be willing to sell your investment at some time. After all, if your investment no longer proves to be practical for you to keep, then selling it may be the best move for you.

Remember that for you to be successful in stock trading, you must be prepared with the many highs and lows of the game. Keep in mind these reasons stated above on when you should consider selling your stocks and perhaps, the selling option could be a great route for you to rise above declines.

Tips For Online Stock Trading

Trading stocks online can be a lucrative arena to enter, however, this may also come with great risks. If you are not well equipped with the artillery to get you through the online stocks jungle, then you might end up losing so much than what you have bargained for. Here are a few tips that could help prepare you for online stock trading.

Choose A Smart Trading Style That Works For You

Take time to consider what type of trading you would want to do and what style would best fit your lifestyle. For example, if you are interested in day trading, keep in mind that in order to do well in this particular field, you may need to be in front of the computer and on the telephone for very long hours in a day.

Whatever trading style you may choose, may it be day trading, short-term trading, weekly trading or even monthly trading, consider the nature of these styles and how you can fit them into your way of working.

Find A Good And Legitimate Broker

Another very important thing to remember in online stock trading is to find a good broker. Make sure that you take time to get to know your broker by checking whether the firm is legitimate under the SEC and if it receives good reviews from those with experience in trading.

The type of trading style that you decide to delve into should also greatly determine on which broker would be best for you. If you were engaging in day trading, then it would be best to choose a firm that has very good and accessible technological services. Other styles of trading can manage less sophisticated brokers.

Choose A Very Good Strategy

Because of the fact that stock trading involves so many risks, choosing a very good strategy can be very helpful for you to weather obstacles that will come your way.

Make sure that you choose a trading method that will take advantage of both up and down markets. A strategy that will work in all types of markets will surely be beneficial because you never know when demands for stocks may increase or go down, and surely, you wouldn’t want to end up losing money because you failed to foresee the different trends of the market.

Aside from this, make sure that your strategy involves minimal risks and gives you high rewards. It is always better to prevent and control risks than allow the chances that you may have to face serious dilemmas. Risk management is very vital in order to become successful in online trading.

Know About Stocks

Take time to know which stocks would be wise to place your investments on through extensive research or even through seeking the help of a professional. It is important that you are aware of the type of stocks that you risk your money on, after all, whatever results these may garner in the market will surely affect whether or not you will gain or lose profit.

Also take time to know when it would be best to sell your stocks. Most people just focus on what and when they should buy stock, but often times they forget how important it is to consider when would be the right time to sell. Take in mind the signs and conditions that can give you signals on when it would be best to get out of a bad investment before you lose substantial amounts of money.

These are all very basic, yet very vital things that anyone who wants to engage in the online stock trading business must know. After all, investing on your own knowledge and skills in trading is the most important thing that anyone must consider in order to win in this very risky trading game.

Follow these tips and surely, you can get a significant difference in your performance as an online stock trader.

Finding The Right Online Stock Broker

The online stock market is a good moneymaking playground to join these days, but often times it may seem all too chaotic and confusing, especially to those who are new to it. With too many options to consider, making decisions in stock trading in this arena can be a challenge, and finding a good online broker to help you make the right choices can just be as difficult.

In choosing an online stock broker, be sure to consider a few of these very important factors that may help you determine whether a broker can truly help you achieve success in trading.

Fees

Take note that all brokers charge fees for commissions, which are the costs to trade by buying and selling stocks. You can be charged with a commission fee twice –first when you buy a stock and second when you sell that same stock.

Aside from the commission fee, you will also be charged with a minimum initial deposit, and this can range from $500 to around $10,000. But if the balance in your account is less than the minimum, then your broker may charge a monthly or quarterly fee that may range from around $10 to $20 or higher per payment

Make sure that in choosing a broker, you should first consider that you could actually afford fees that will be charged to you.

Features

Every online broker has a set of tools and features that will be integrated in your trading account. Some trading accounts may even offer you additional features, but sometimes, these may cost you extra. Find a broker that offers you features that you believe will benefit your trading transactions, as well as your budget.

An application called the streamer, which includes tools for streaming charts, and streaming data should usually be included in your account. This allows you to see behaviors in the stock market, such as the latest real time prices.

There are even streamers that can simply the process by directly allowing you to buy and sell stocks without having to open other websites. Such features can be very helpful in making trades.

Popularity

It also wouldn’t hurt if you choose an online broker that is more popular and known. In this way, you would be able to review their performance in the market through checking out reviews and hearing what other people have to say.

There is a huge chance that when a broker has achieved popularity, that it performs quite well in the market. Aside from this, popularity may also indicate experience in trading. Of course, you would certainly prefer to get help from a trader that has sufficient knowledge and experience in the industry. Through this, you would at least be assured that you are getting good help in making trades.

Remember to first and foremost consider your needs as a trader and whether or not the broker you are eyeing-on will be able to meet these needs. Financial factors, services, knowledge and experience in the online trading market are very vital for you to garner success in this arena.

Choosing a stockbroker for online trading may certainly be difficult and even overwhelming at times. But as long as you take in mind the important factors mentioned above, then you just might be able to find the right broker that can be of valuable help to you.

Improving Your Chances In Stock Trading

Trading in the stock exchange is not a simple matter. It can be very challenging and may require a lot of time, knowledge, skills, and patience. If you do not practice trading in a smart and strategic manner, you will surely end up losing more than what you have bargained for.

Here are some major things that you must do in order to improve your chances in successful stock trading. Let us discuss what these things are and how they can help you in smart trading.

Trade With Money That You Can Manage To Lose

Stock trading can be quite a gamble. Your chances of earning can just about equal to your chances of losing, and in some cases, there are even greater risks of losing more. Money that you will need for survival should never be used in trades.

Because most trading markets can be very unpredictable, make sure that you make use of money that you can afford to lose. It may be too risky to invest money that you will badly need for your daily living or for your future. Always take note of the risks involved and what you are particularly risking in the exchange.

Always Trade In Reasonable Sizes

Some markets in the exchange are able to allow individuals to trade very large amounts of leverage. And so, a lot of people trade in large quantities in order to assure larger profits. However, doing this may also open up the possibility of losing money in such large quantities as well.

It is always wiser to scale your trades in order to lessen risks. Never trade sizes that can wipe you out of all your money. And you would have nothing to lose if you actually start small, and grow your transactions from there.

Identify Market States Before Trading

It is also very vital that you are aware of how the market is doing before you start trading. Take time to find out if trends are going up or down. If the you know whether the market trends are weak or strong then it may become easier for you to make the right decisions in your transactions.

By getting a good picture of the situations in the market, you can easily lay down a plan for conducting a successful trade. Things would become easier for you to foresee what must be done when you have a good idea on what may happen. In this way, you may prevent making a lot of wrong choices.

Set A Time Frame For Trading

Even if the main goal of trading in the market is to merely make a lot of money, planning beforehand when you would like to get out of the game can save you from a lot of risks.

The trading industry is consistently moving, and through the transition of time, prices may evolve. Because of this, there can also be a growing exit price. Although it may be impossible to absolutely determine when you would exactly quit the market, it could be helpful if you at least place your trade in perspective and find out when you would best collect the exit price. Doing this contributes to liquidity in the movements of the market.

Anyone who will lead you to believe that it is easy and it is always a sure thing to make money in stock trading is being untruthful. Remember that this particular market, by nature, is a volatile and consistently moving industry. And so, you must be aware of the different trends as well as formulate a good and strong strategy to weather whatever obstacles may come.

In order to make a successful trade, you must take into account the technical as well as fundamental factors in order to make good and informed decisions. Make sure that you use your knowledge and skills in determining a strategic plan to go about your trades. Achieving success in this industry is not as easy as it may seem, but with a little hard work, you may just get great results.

The Problem With Penny Stock Trading

Most people these days want to earn money fast. This is probably one of the major reasons that so many people are also getting scammed and often lose a lot of money. Sad to say, that the “easy money” mentality has reached the stock market and has left a lot of people investing unwisely on penny stocks that may often be too risky to begin with. Let us learn how this variety of stocks can actually be problematic to investors.

What Are Penny Stocks?

Penny stocks are stocks that are sold for less than a dollar or, in some cases, less than five dollars for each share. Most of these stocks only have a short operating history and only have a few million dollars in net tangible assets. Typically, these have low market caps, minimal liquidity and are often traded on over-the-counter exchanges.

Why Are Penny Stocks Risky?

What you should know about these stocks is that trading them may be much riskier as compared to regular stocks. After all, with such issues as these stocks having no adequate backgrounds, offer very limited information about the companies, and may often pose huge threats for scams.

Lack of Background

The chances are, if companies are willing to trade stocks in such small amounts, they most probably have very little business history or may have a very negative one. These companies are either just starting out in the business or they may have experienced bankruptcy, thus they resort to selling their stocks at such low prices.

Because there isn’t a lot of information available on penny stock companies, there is a very huge possibility that you might be making a bad investment. And of course, you may end up losing more money than you plan on gaining.

Limited Information

For most companies that offer penny stocks, not a lot of information is really available for investors to view online or elsewhere. After all, most exchanges in this market operate on the Over The Counter Bulletin Board (OTCBB), which do not really require thorough reports for public posting.

Without such valuable information, it would be very difficult on the investor’s part to make the right and objective trade decisions, and this could often lead to unwise guessing.

Bribes And Scams

It isn’t common for such stocks to be promoted by people who have been paid to do just that. Perhaps, you have received spam emails that may sound too good to be true, which may encourage you to invest in a particular penny stock. Take in mind those successful companies these days mostly did not start out through penny stocks.

The usual scenario happening that enables bribes and scams is that a company may buy some stock and then spread emails to tell people that a certain stock is doing well in the market. A lot of readers would then respond to this by investing in stocks, causing the price to dramatically shoot up due to supply and demand. After this, the scammer may sell his or her share for a huge amount before the price dramatically goes down again leaving many investors to lose a lot of money.

In conclusion, although there is a lot of potential for growth in very minute sized stocks, there are greater risks involved. And often times, if you are not well acquainted with the business background as well as with the necessary information on how your investment is doing, there is a huge chance for you to get scammed.

And so, if you are new to the whole stock exchange market, make sure that you decide wisely on which type of stocks to invest and do not go after what may seem easy to get you rich. Take in mind that, although penny stocks may be alluring, they may involve huge risks on your part.

Familiarizing Commonly Used Stock Market Terminologies

The stock market is a great arena for people to make a lot of money, however, for many beginners, all the hustle and bustle of stock trading may cause a lot of confusion, especially if you are not familiar with the many terms and tactics used for negotiations.

If you are a beginner in the stocks game, make sure that you familiarize and educate yourself well on stock trading knowledge. You can of course, start off by widening your vocabulary. Here are a few terms that you may need to familiarize:

Stocks

Stocks are probably the most important and common items traded in the stock market. These are actually shares of certain companies, which are publicly sold and traded.

Whenever people buy a portion of stock in a particular company, this means that they acquire a share of ownership and investing in that specific business. Through this, a stockholder is given certain rights towards the company such as a vote in stockholder meetings as well as his or her financial share from the company’s earnings.

Broker

A stockbroker is the person who handles the actual trading of stocks. He or she does the negotiations to buy and sell the stocks in behalf of the investors and the companies involved. The many various types of brokers may include full-service, online, auto-trade and discount brokers.

Bull Market

A bull market is a market that manifests a continuous increase in the value of its stocks as well as a steady growth. Generally, with this type of market, investors gain an optimistic attitude and may want to buy more rather than sell stocks.

Bear Market

Bear markets mainly characterize significant losses and declines in a particular market. With this type of behavior among stocks, most investors would generally want to sell more of their stocks and may be pessimistic about investing.

Dividends

Dividends are added or bonus payments given to stockholders after a profitable quarter. With this sum of money, many people may often reinvest on more shares of stock, which allows individuals to earn so much.

Futures

Futures, just like stocks, are also traded in the market. However, these are purchased against future costs of commodities. You can earn from these, if in time, the actual price of commodities become higher than what you paid for the futures. On the other hand, you can also lose money if the price becomes lower that what you paid for.

Day Trader

A day trader is the person who buys and sells stocks aggressively in one day. Usually, he or she does this for several times each day in order to make quite a few small profits within the day.

Trading on Margin

Trading on margin may be similar to trading stocks with the use of borrowed money. Through this, you can purchase shares of stock for only a portion of the actual price. The remainder of the cost can be paid upon the actual sale of the particular stock, or on a later date.

These terms are only a few of the most commonly used language in stock trading. And upon encountering them, you may certainly have the impression of how intimidating the stock market can get. With the many complicated terminologies and tactics, you may easily get backtracked if you do not know enough about what you are dealing with.

Remember that if you are new at doing business in this arena, make sure that you take the extra mile to learn more about more terms as well as strategies on how you can best maximize profit. A little hard work will certainly get you far, and one of these days you will realize how all of this can pay off.

Stock Option Trading – Starting Out On The Basics

Stock option trading is not an advisable endeavor if you are new to the whole stock market game. If you delve into it unprepared, chances are, you may lose a lot of money as fast as you can make it. But doing your homework and starting out from the very basics can help groom you to be able to play in this complicated game. After all, this is a powerful investment tool if you plan to stay long in the stock market business.

What Are Stock Options?

First and foremost, it is important that you do not confuse an option with an actual stock. A stock option is actually a contract that gives the rights to either buy or sell the securities or commodities of a certain stock at a fixed price and within a specified time. When you trade options, you are basically just trading your privileges for securities or even certain merchandise involved, but not the stock itself.

These stock options are actually very important in the market because they provide advanced investors with extra opportunities that could pave way to better returns in doing business within the stock market. Investors usually make use of these rights to evade from price declines, to give insurance for the price of a future purchase, or even to help them speculate future stock prices.

There are two kinds of options –call options and put options. Call options basically give purchasers the privilege to buy underlying stocks, while put options allow the purchaser to sell the underlying stocks.

How Do You Exercise Options?

If you already own an option, you can exercise buying or selling its stock any time on or before its expiration date. This would allow you to trade the stock at a set price regardless of what the current market price is for that particular stock.

And thus, you can have the privilege of buying or selling stocks in cases wherein you fear that prices might get too high or too low for you. In this way, you have certain degree of insurance on the investments that you make. A lot of investors simply make trades without any intent of possessing the underlying securities.

How Do You Trade Options?

In trading options, also take not that the pricing may be extremely complicated. But it will basically depend on two major factors –the pricing of the underlying stocks and the amount of time remaining within the contract.

The price for principal stocks that accompany the options directly affects the price of the option. If the demand for the stocks is high, the price for the options will also go up and vice versa.

The amount of time left within the contract for an option also determines the price. As time expires, the price for the option may go down as it may become less desirable.

Take note that in the trading options game, investors use various trading strategies, which may all be very risky and complicated. And so, to become really successful in your attempts to profit from option trading, make sure that you at least familiarize yourself with the different strategies and consult experts who can give you good and reliable training.

Stock option trading can be a very strong investment tool for anyone who does business in the stock market. However, keep in mind that for someone who is not as familiar with the different strategies and if you are new to the stock exchange, this may be a very risky endeavor to take on. And so, utmost caution for beginners is highly advised.

The Difference Between Trading Stocks And Stock Options

In the stock market industry, the trade for stocks and stock options are often interchanged and many may be confused between the concepts behind these types of trades. However, what you should know is that these two have very different characteristics from each other, and using them interchangeably can be very lethal if you want to engage in the stock trading game.

Knowing the difference between these two would not only save you on making serious trading mistakes, but perhaps, you can be guided on making a smart business decision on which particular trade you would actually want to make your investments.

Stocks Versus Stock Options

By definition, stocks are actually shares of a particular company that can be traded through the act of buying or selling by an investor. If you happen to own a particular stock from a company, you are entitled to certain rights, which may include a profit share from earnings. You may also have the liberty to sell your share of stock if you no longer desire it.

A stock option on the other hand, is not the stock or share of the company itself, but it is actually the rights for a certain stock. It actually allows you to buy and sell company stock at a set price in a certain time period. However, you do not gain the profits from the company itself.

Take note that in doing transactions for stock options, there will always be a buyer and a seller, and this may not always hold true when compared to stocks. When you sell stock options, you are actually creating a certain degree of security for the company as well as for yourself. In this way, the parties involved can make sure that money is actually made to the frequent trade that happens.

Comparing The Benefits

In comparing the benefits of trading stocks and stock options, many experts would claim that stock options might be a promising gamble for companies and individuals, especially if you have adequate experience in the trading game and can substantially use very good strategies to survive. However, the same results might not be expected if you are only a beginner.

What makes a lot of experts prefer options trading is usually because in this particular trade, no matter what would happen to the underlying security, an option buyer cannot lose to more than that of the initial price paid for the rights. Therefore in trading options, there are fewer risks involved on the part of the buyer, especially when it comes to the possibility of losing a lot of money. And it may even give promises of profitable gains.

But on the other hand, the seller may experience greater risks. There may be a possibility that one has to deliver or take deliveries of the stock shares. Unless the option is actually covered by a different option, then the seller may end up losing much more than the stock option’s original price.

And so, if you are not well skilled and knowledgeable about how you can prevent severe losses, then the best way for you to play the stocks trading game is to stick with the more traditional trading of stocks as this can be easier.

However, if you do believe that you can manage then options trading may give you many promising positive results. Just make sure that you take the time to understand concepts and strategies behind stock options before you actually start trading.