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Everything You Always Wanted To Know About Swaps* (*But Were Afraid To Ask)

Hello, dummies
It's your old pal, Fuzzy.
As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 1992 on the daily and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great.
What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. I do my bit to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy just for you. It's so serious I'm not even going to make a u/pokimane gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post.
That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets - spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way.
We're going to break it down like this. (1) "What's a hedge, Fuzzy?" (2) Common Hedging Strategies and (3) All About ISDAs and Credit Default Swaps.
Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy.
TL;DR? Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 5-7 minutes. You'll learn something, and I promise I'll be gentle.
Ready? Let's get started.
1. The Tao of Risk: Hedging as a Way of Life
The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third outcome. If you hedged against the possibility of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows:
Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself.
Congratulations. You just finished Hedging 101. "But Fuzzy, that's easy! I just sold a naked call against my 95% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part.
You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus.
That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically. In wallstreetbets terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it.
Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets?
2. A Hedging Taxonomy
The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (1) You have commodity risk for the shit you buy or the shit you use. (2) You have currency risk for the money you borrow. (3) You have rate risk on the debt you carry. (4) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now.
(i) Swaps
A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one.
Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered.
The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game.
I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise! - the rate gets better after you borrow. Now you're bagholding to the tune of, I don't know, 5 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging.
There are many different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 99% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested.
Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 10-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure).
(ii) Forwards
A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me.
Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 1. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways.
People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances.
These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 10 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them.
(iii) Collars
No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable to WSB. Collars deal with options! Hooray!
To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 3 or 4x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts.
(3) All About ISDAs, CDS and Synthetic CDOs
You may have heard about the mythical ISDA. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 10+ years.
First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA.
Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 90s and early 2000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire.
Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking?
Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 2000s because a shitload of them containing subprime mortgage debt went belly up in 2008. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt. They're synthetic because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in instruments that rely on that debt and then hedging that exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama.
Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (1) Investors who previously were long on the debt hedge their position by selling CDS protection on the underlying, putting downward pressure on the debt price. (2) Investors who previously shorted the debt switch to buying CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (3) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details.
I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here.
Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post.
*EDIT 1\* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open.
submitted by fuzzyblankeet to wallstreetbets [link] [comments]

Off how to put money in the stock market Abreu blocos cost $3.00

Off how to put money in the stock market Abreu blocos cost $3.00
By MATT LEE Updated Mar 7, 2020
Investors can trade almost any currency in the world through foreign exchange (forex). In order to make money in forex, you should be aware that you are taking on a speculative risk. In essence, you are betting that the value of one currency will increase relative to another. The expected return of currency trading is similar to the money market and lower than stocks or bonds. However, it is possible to increase both returns and risk by using leverage. Currency trading is generally more profitable for active traders than passive investors.

KEY TAKEAWAYS

  • It is possible to make money trading money when the prices of foreign currencies rise and fall.
  • Currencies are traded in pairs.
  • Buying and selling currency can be very profitable for active traders because of low trading costs, diverse markets, and the availability of high leverage.
  • Exchanging currency is not a good way for passive investors to make money.
  • It is easy to get started trading money at many large brokerages and specialized forex brokers.

Buying and Selling Currency Explained

It is important to note that currencies are traded and priced in pairs. For example, you may have seen a currency quote for a EUUSD pair of 1.1256. In this example, the base currency is the euro. The U.S. dollar is the quote currency.
In all currency quote cases, the base currency is worth one unit. The quoted currency is the amount of currency that one unit of the base currency can buy. Based on our previous example, all that means is that one euro can buy 1.1256 U.S. dollars. An investor can make money in forex by appreciation in the value of the quoted currency or by a decrease in value of the base currency.
https://preview.redd.it/6aqspn49zjj51.jpg?width=589&format=pjpg&auto=webp&s=9ea0ac7404e644c3d74d404a63faca1c20f6ea04
Another perspective on currency trading comes from considering the position an investor is taking on each currency pair. The base currency can be thought of as a short position because you are "selling" the base currency to purchase the quoted currency. In turn, the quoted currency can be seen as a long position on the currency pair.
In our example above, we see that one euro can purchase $1.1256 and vice versa. To buy the euros, the investor must first go short on the U.S. dollar to go long on the euro. To make money on this investment, the investor will have to sell back the euros when their value appreciates relative to the U.S. dollar.
For instance, let's assume the value of the euro appreciates to $1.1266. On a lot of 100,000 euros, the investor would gain $100 ($112,660 - $112,560) if they sold the euros at this exchange rate. Conversely, if the EUUSD exchange rate fell from $1.1256 to $1.1246, then the investor would lose $100 ($112,460 - $112,560).
submitted by SeniorPie3217 to u/SeniorPie3217 [link] [comments]

Off how to put money in the stock market Abreu blocos cost $3.00

By MATT LEE Updated Mar 7, 2020
Investors can trade almost any currency in the world through foreign exchange (forex). In order to make money in forex, you should be aware that you are taking on a speculative risk. In essence, you are betting that the value of one currency will increase relative to another. The expected return of currency trading is similar to the money market and lower than stocks or bonds. However, it is possible to increase both returns and risk by using leverage. Currency trading is generally more profitable for active traders than passive investors.

KEY TAKEAWAYS

Buying and Selling Currency Explained

It is important to note that currencies are traded and priced in pairs. For example, you may have seen a currency quote for a EUUSD pair of 1.1256. In this example, the base currency is the euro. The U.S. dollar is the quote currency.
In all currency quote cases, the base currency is worth one unit. The quoted currency is the amount of currency that one unit of the base currency can buy. Based on our previous example, all that means is that one euro can buy 1.1256 U.S. dollars. An investor can make money in forex by appreciation in the value of the quoted currency or by a decrease in value of the base currency.
Another perspective on currency trading comes from considering the position an investor is taking on each currency pair. The base currency can be thought of as a short position because you are "selling" the base currency to purchase the quoted currency. In turn, the quoted currency can be seen as a long position on the currency pair.
In our example above, we see that one euro can purchase $1.1256 and vice versa. To buy the euros, the investor must first go short on the U.S. dollar to go long on the euro. To make money on this investment, the investor will have to sell back the euros when their value appreciates relative to the U.S. dollar.
For instance, let's assume the value of the euro appreciates to $1.1266. On a lot of 100,000 euros, the investor would gain $100 ($112,660 - $112,560) if they sold the euros at this exchange rate. Conversely, if the EUUSD exchange rate fell from $1.1256 to $1.1246, then the investor would lose $100 ($112,460 - $112,560).
submitted by SeniorPie3217 to u/SeniorPie3217 [link] [comments]

The Petrodollar Is The Root of All Evil

So here is the core element of what I believe, drives US foreign policy (Wars/Conflicts/Sanctions) and also domestic policy. I tried to trim my draft down so it's not a TLDR, but not leave out any critical information or citations/sources. This is pulled directly from this brief article: Petrodollar
"KEY TAKEAWAYS
This list of facts should make clear just how dependent US currency is on the global oil economy. Which brings us to something called The Triffin Dilemma .
"By "agreeing" to have its currency used as a reserve currency, a country pins its hands behind its back.
In order to keep the global economy chugging along, it may have to inject large amounts of currency into circulation, driving up inflation at home. The more popular the reserve currency is relative to other currencies, the higher its exchange rate and the less competitive domestic exporting industries become. This causes a trade deficit for the currency-issuing country, but makes the world happy. If the reserve currency country instead decides to focus on domestic monetary policy by not issuing more currency then the world is unhappy."
"Reserve Currency ParadoxBecoming a reserve currency presents countries with a paradox. They want the "interest-free" loan generated by selling currency to foreign governments, and the ability to raise capital quickly, because of high demand for reserve currency-denominated bonds. At the same time they want to be able to use capital and monetary policy to ensure that domestic industries are competitive in the world market, and to make sure that the domestic economy is healthy and not running large trade deficits.
Unfortunately, both of these ideas – cheap sources of capital and positive trade balances – can't really happen at the same time."
Obviously, the US and global economy is a complex system with many moving parts but I think, just this small amount of information begins to clarify the bigger picture. It seems as though most people have accepted the idea that we have engaged in bad faith wars in the name of stealing oil, which is true on some level, but we are not actually trying to seize the oil, we are trying to force the entire world to participate in OUR oil economy in a way that benefits us the most.
Which leads me to the final part of this post. The Non-Alignment Movement (NAM) is a collection of approximately 120 nations that have joined together, starting back during the cold war, in an effort to remain independent and not be pressured in to choosing sides between the US and Russia. Many of these countries, such as Iran, Iraq, Afghanistan, Libya and most recently, Venezuela and Syria, have either dropped the petrodollar or made efforts to trade in other currencies. If this list looks familiar, it's because we have invaded, occupied and/or attempted regime change backed by MSM reporting of human rights violations or threat of nuclear proliferation. Obviously, we have pretty solid evidence that most of these claims were completely false.
One of the main focuses of NAM these days, has been to conduct trade and handle the oil on their land, any way they see fit and they have been mounting a pretty strong coalition in response to the insanely harsh sanctions that we have tried to levy. Article About NAM and US Sanctions . This is essentially economic terrorism and unfortunately, most people, including myself, are not quite able to grasp just how de-stabilizing these sanctions are but it is slowly becoming clear to the public that we have been carrying out this policy of global dominance for decades.
The Trump WH and John Bolton just happen to be much more open about their motives: In January, White House National Security Advisor John Bolton issued a veiled threat on Twitter: My advice to bankers, brokers, traders, facilitators, and other businesses: don’t deal in gold, oil, or other Venezuelan commodities being stolen from the Venezuelan people by the Maduro mafia. We stand ready to continue to take action.
On his Twitter account, Trump insisted, “We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”
I realize that this may not be the most exciting topic, considering the kind of news we have been peppered with recently, but I think it is important for people to consider. It seems pretty clear that almost all of our military operations around the world have everything to do with giant oil companies, defense contractors and the petrodollar and have nothing to do with spreading democracy or freeing civilians from oppressive regimes. Our allegiance with Saudi Arabia makes a lot more sense and our insane obsession on Russia also starts to take focus. Russia is also a member of NAM and is basically the biggest country that has chosen to defy the US. And since we can't push them around like a weaker country, we rely on a constant fear-mongering campaign by our media outlets.
Following the NAM summit, Venezuelan Economy Minister Tareck El Aissami announced his country’s establishment of a payment system to meet obligations to Russia that will be covered with rubles. The developments have sent the US establishment into a frenzy.
Still working on part 2, but hope some people will find this informative....
submitted by rustcole01 to WayOfTheBern [link] [comments]

What I learned: Introduction to investing

Valuable information for new investors
Warning. Looooong post. TL:DR in the bottom.
Recently I have been chatting a ton with people who are very new to investing. I don’t claim to have mastered anything, however I have been able to help a lot of people through chats and messages. I’ve given advice and answered questions, and through that I found out a lot of problems new people run into, and decided to compile some of the points I found important. I will start this with the primary compiled information I usually give people when prompted, and then move on to specific questions I found important. A final note is that this is my own opinion and views, so feel free to disagree! I’d love input, even if I feel confident about this advice.
First off I’d recommend searching for posts about starting out & learning the basics, both here and on other investing/trading subreddits. The question has been asked hundreds of times, and you’ll find some amazing answers if you look.
The first thing you need to understand is that finance is all about information. If you want to learn, you need to take in information. All of the information. Books, news, financial statements, press releases and earning calls. Read everything. You will find hundreds of words you don’t understand, so look them up (investopedia have a majority of them). In the beginning you will struggle, however, as time goes by, you will start to understand. If you do not like reading, learn to like it. There is no way around this. If you find yourself investing without reading tons, you are going to lose.
Books to recommend: Anything written by Warren Buffet, A random walk down wall street by Burton Malkiel (how I started), Stress test by Timothy Geithner & The intelligent investor (“thick” but all important).
Pick out your favorite company in the world, and check if they are public. If they are, head over to their investor relations page and read the transcript to their latest earnings call. Read their financial statement (10-Q). If you don’t understand a word, look it up. This is frustrating but required. This method of reading, finding things you do not understand and looking it up (and learning it), will be the absolute unavoidable key to improvement.
There are 3 things you should consider buying as your first investment:
Large cap companies. These are the most risky you should consider buying. These large companies (Apple, Banks, Microsoft, 3M, JnJ, Walmart and the like) are stable, but can for sure give you a great return.
Specific ETFs. An ETF is a basket of stocks, often with some sort of focus. It gives you instant diversification. The specific ETFs are less risky than the single stocks, but hold risk nonetheless. Specific ETFs are baskets of stocks of varying number, letting you buy one security, and get a tiny portion of many companies. This lets you bet on a sector. Say you think that robotics and automation is the future, you can bet on that by investing in $ROBO. Other examples of these are $KWEB, chinese e-com, $FNG, media and tech, $ITA, aerospace and defence and $SOXX, semiconductors. These let you invest in a promising industry, without having the risk of a single company failing.
Lastly, and by far the best choice, is indexing. These are ETFS like $VOO, $VTI, $VWO and $VOOG, and is a way to take on the least amount of risk while still gaining along with the market. You get a wide basket of stocks, focusing on things like the S&P500 ($VOO), which is an index of large (minimum 6.1 billion USD) US companies. Historically , you can expect 7% annual gain here. That’s realistic. Anything offering much more than that without risk has tons of risk without disclosing it, per definition. $VOOG indexes growth companies, focusing less on the giants and more on the up and coming. $VWO focuses on emerging markets, getting places like brazil, russia and all over asia. Indexing is by far the best choice, and will very often gain you a steady growth. The final and great choice is $VTI, which is the global basket which contains the market as a whole.
Remember, if you have to ask simple questions, you should be indexing. Asking questions is very important and a great way to learn, however, you should not make specific investments unless you can make the call 100% yourself with confidence. If you are not sure, you are making a mistake in purchasing.
Lastly, and honestly most importantly, here is a list of things you should ALWAYS be able to answer before buying a security, equity or derivative:
  • Why am I getting this instead of an index? Where is the upside?
  • If the stock goes up, what action do I take? When do I sell? At what price or % gain.
  • If the stock goes down, when do I sell? At what % loss or a price.
  • What risks are there? How does the worst case realistic scenario look like?
  • Why am I making this investment right now? Is there a better time?
  • What exactly am I buying?*
And finally, always, without exception, perform your own Due Diligence. Don’t take advice from other people without understanding the situation yourself. If you have to ask questions, you should not own the equity. Ask about what you do not own. If you have to ask questions about an equity you already own, you have messed up, and should rethink your strategy.
A last but VITAL note is to keep a journal. You should note down every stock purchase you make or decided to not make, noting down the stock, price, date and answers to the 6 questions. This will help massively over time, where you can look back how you felt before and why you made decisions. It helps to keep temporary emotion out, as well as self reflecting which is the most vital learning method of any craft.
Q&A
Should I buy cheap stocks like $XXX for 4 dollars per share, or expensive stocks like $YYY for 500 dollars per share? IT DOES NOT MATTER. The price of the individual share have no effect whatsoever on the price of the company, how much you will gain or how much risk there is. If you buy 10 A-stocks for 1 dollashare, and if you buy 1 B-stock for 10 dollars/share, both these purchases are EXACTLY the same, in practice. If stock A gains 10% you earn $1.00, if stock B gains 10% you earn $1.00. Then the stocks are valued at $1.1 and $11 respectively. But there is no different. Don’t let the price of the share fool you. The only thing that matters is the market cap, which is the (number of shares*price of 1 share). The market cap is the cost of ALL the shares in the entire company. Some stocks like being expensive to seem exclusive and expensive, but it’s really the company's choice.
What numbers matter the most for the companies so I can compare? Well, that's complicated. DIfferent investors value different things. Some value P/E (price per earnings) and some value margin changes. You have to decide for yourself what matters, which leads to tons and tons of reading. Really, if you don't like reading and analyzing, this isn't something for you. Look at ETFs then. As a rule of thumb, 1 or 2 numbers is not enough to gauge the HUGE and COMPLEX being that is a corporation, so don’t get caught on something like P/E. Compare everything.
Will I be able to profit? Probably. As a new investor, especially a young one, will see both success and failure over time. This is natural. I recommend investing a smaller amount of money. Either you will gain a few % and be excited to learn and continue, or you will lose a few % and you find the ultimate opportunity to analyze what your mistake was.
Is $XXX enough money? Probably. It depends on your broker and fees. Any amount invested into the market is great, and a 10% increase is a 10% increase no matter how much you invest. Depending on your broker though, it might be easier or harder. With high commission, a smaller amount will be eaten by fees. With smaller amount, some expensive stocks (see $BRK.A) might be out of your reach. This shouldn’t be too much of a problem though.
What broker should I use? The best one for you! Hard question. It is country dependent. Look around. You want low commission and any perks you require. To start out, depending on how much money you have to invest, look for low-commission brokers. $0 - $3 is a good range per stock purchase. If you pay more than 2% on your investment, you lose 2% to buy in. This would generally cause stock to not be worth to buy. So do some thinking on your own, to invest you will have to get used to it. Some brokers let you buy partial shares as well, which might be a plus if your capital is low to buy the more expensive stocks.
What should I invest in? There are so many things! Like said above, cheap funds and common stock are good places to start. They are the core of investing, and should be your start. After that, move on and understand bonds. It will be all important during your career in investing. On top of that there are warrants, options, forex, commodities, and all kinds of additional derivatives. Stay clear of those completely until you can confidently make the call to try it out.
My stock increased/decreased in value. Should I sell?
Asking this question means that you weren’t thorough enough when you made the purchase. You should always have it written down on a paper. When do you get out? A valid answer is never. If you believe in the business and they prove themself strong, why ever sell? Some people like selling if they gain 30% or lose 30%. Some do the same on 15% respective 10%. It comes down to how much long term faith you have in the company, when you’ll need the money and what your risk tolerance is. Personally, when I buy a company, I will ignore it until something changes in the core business. I re-analyze each company each earning. It takes a lot of time, but its my method. If I buy something more high risk, I will sell at a set loss-% (20-40% loss) and the same on gain.
How does taxes work and how should I plan for taxes? Taxes are hard and complicated, but it is something you must understand how it works. Capital gains taxes are vital to understand. Sadly, they work differently in each country, so there is no easy answer except for you to look up it yourself. But know it, it is vital.
To end, these are the most important 4 rules of learning how to do all this:
  • Read. Everything.
  • Keep a journal and record the answers to all 6 questions each time you make a purchase, or decided in the end to not.
  • Each time in your reading if you come over a concept, word or idea that you do not understand, get used to looking it up and learning what it is. It’s key.
  • When you succeed, analyze if you got lucky or if your actual reasoning was the correct call. When you fail, analyze what your mistake was and write it down in your journal. Both are vital.
TL:DR: Investing is about reading. You should probably start by reading this now or give up. If you read it all, success! Keep going!
Disclaimer: Don't invest money that you can't afford to lose. You might lose all your funds. Probably don't.
lykosen11
submitted by lykosen11 to StockMarket [link] [comments]

New rule! Also are cryptocurrencies an investment, will there be a crash? Everything answered here!

This is going to be the only crypto post for now and an announcement:
Rule 6: Bitcoins & cryptocurrenies should be discussed in CryptoCurrency. Posts regarding this topic will be automatically removed.
If there's a stock correlated with cryptocurrencies, like coinbase going IPO, then that's fine, you might have to message the mods after posting to have it approved, no big deal.
Also if you're questioning whether something is an investment or not, just search for it on personalfinance. For general currency trading strategies, see forex .
If you're wondering if bitcoins are an investment or if there will be a crash, read on.

Are cryptocurrencies an investment?

This post is going to deal with bitcoins & cryptocurrencies as an investment... they're more speculative. All currencies are speculative mostly due to how the forex market works, but more because of exchange rates between countries keep currencies balanced (including inflation, country debt, interest rates, political & economic stability, etc), so you can only profit in price fluctuations.
Sure you could buy the currency of a depressed country, like Mexico decades ago, and then hold in the hopes it'll go up (which it did for Mexico), but that's also speculation (no one knew Mexico would pay off so much debt).
Bitcoins are also affected by other countries' currency values, but more so by the future expectation of legitimacy, world wide adoption, limited gains from mining, and eventual limit in supply. But at any given moment the United States could pay off more debt, raise interest rates to reduce inflation (or cause deflation), grow GDP, or even reduce the supply of USD all of which would increase the value of USD (keep in mind bitcoins can't do any of these things).
Far too many people are treating cryptocoins as an investment because currently (June 5th 2017) a lot of crypto investors are worth a lot of money, god bless you people, so this post will also help you determine if we're headed for a crypto crash and maybe you can keep those profits.

Should I invest in cryptocurrencies?

Understand that an investment is something you hope will go up in the future or provide income, both of which for the long term vs speculation which profits on short term inefficiencies.
Speculative securities are typically commodities, options, bonds, and currencies, but also stocks that are volatile enough to give you extreme returns or extreme loses.

Examples of investments:

Examples of speculation:

Reducing the risk of speculation

Typically for speculation you reduce risk by reducing your trade size and timeframe, but since you're trying to invest into something that is speculative, you can try:
Asset allocation, a strategy that reduces risk.. If you're 80% stocks, 15% bonds, 4% gold, and 1% bitcoins, if something were to happen to bitcoins, you still have 99% of your money.
But even very aggressive long term portfolios leave speculation out completely and just go 100% stocks because stocks benefit from growth while speculative securities like gold benefit from global turmoil in the short term. Only mid risk & mid term portfolios can take advantage of gold's speculative returns.
I also mention asset allocation because many crypto investors have been using this strategy on a portfolio of 100% crypto coins, but that doesn't help you reduce the overall risk of crypto coins, you're just reducing the risk of 1 speculative asset with another speculative asset. 100% crypto portfolio would face the same risks such as being made illegal, IRS aggressively hunting down crypto profits, a drop in correlated coin markets, or just a loss of popularity would all cause a sell off. Even the USD or Chinese currencies becoming more valuable would reduce the value of crypto coins.

Should I buy coins right now?

Cryptocoins are a better investment after a period of consolidation when volatility has stabilized:

Bitcoin 2013/2014 speculation, chart

Bitcoin 2015 consolidation, chart

Source Bitstamp exchange, while the volume is #2 to GDAX, Bitstamp is better to look at for historical price/data, more charts here.

RSI & MACD key for above charts and primer

Analyzing overbought signals

So the first chart above have RSI & MACD screaming that bitcoin is overbought and you shouldn't invest in 2013/2014.
The black squares in the 2nd chart show consolidation and reduced volatility, a "better" time to invest. If you were trading short term, it would be a whole different story, and there would be opportunities to buy & short, but since this is written for investing, the small overbought signals are ignored, so if you were to buy Bitcoin at $300 inside the first blacksquare (2nd chart) and then it suddenly drops to 25%, it's okay because the volatility is much lower compared to previous price movements (nothing compared to 80% loss in the 1st chart). Any investor would tell you a 25% drop is terrible, but bitcoins are speculative and that kind of drop is pretty damn good for this level of volatility.

Nothing goes straight up forever

and anything that comes near this vertical incline will eventually lose 80% to near 100%, always happens, it's usually preceded by emotions (price euphoria), attention, and increased volume, all classic signs that something is becoming riskier.
Other speculative securities gaining multiples and then losing 80% to near 100% of value:

Notable comments on reddit:

*This is just to get you guys looking at different subs on this topic, and yeah it's mostly anti-crypto, but don't let that discourage you.

Is Bitcoin going to crash?

Maybe, the signals are getting louder, you tell me: The only chart you wanted to see this entire time.
So based on the above chart, is bitcoin overbought? MACD levels are the same as 2013's crash, but the increased in value is around 4.3x or 2.4x (depending on which you look at), so maybe we'll see another spike before a crash, I don't know, it's up to interpretation right now. There's the emotional price levels of 3000 and 4000 that we might have no problem getting to in an overbought environment before a correction. And how big will the correction be? I think 80%, but it very well could be around 50% down to $1200, the previous level of resistance which would become support.
I put everything above in its own wiki here.
Well I hope that helps everyone. Sorry to anyone that may feel butthurt on classifying cryptocoins as speculation, I hope you understand the facts. Feel free to argue or agree with this. If I made any mistakes and you point them out, I'll correct them and give you credit for it in an update to this post and the wiki.
Also the automod will is just going to blanket remove posts (not comments) with the following keywords {crypto, bitcoin, btc, etherium, altcoin} (see update 4 below) (this will eventually get relaxed if Coinbase ever IPOs) and then it'll send the user this message:
"Sorry your post[link] was removed in stocks because of rule 6: Bitcoins & cryptocurrenies should be discussed in CryptoCurrency. You can find more information in our are-cryptocurrencies-investments wiki. If you're trying to discuss a non-OTC stock related to cryptocoins like Coinbase IPO, or this was just a mistake, message the mods and they'll approve your post, thanks."
Update: Created wiki, added relevant websites and sub reddits. Also turned on automod reply.
Update2: those relavant websites and subreddits I put into the wiki, thanks u/dross99 for recommending ethereum

Relevant websites/wikis

Relevant subreddits

  • CryptoCurrency - main sub to learn about all bit & altcoins
  • ethtrader - trading eth
  • ethereum - for more eth information
  • btc - the place to have bitcoin discussions or r/CryptoCurrency; while Bitcoin does have a lot of information on Bitcoins in general, you'll find many reddit subs completely opposed to Bitcoin for heavy censorship of discussions, especially those critical of bitcoins, so you're better off reading the sub's wikis and discussing bitcoins in btc & r/CryptoCurrency
  • personalfinance
Update3: Shoutout to the mods on CryptoCurrency
Update4: Updated auto mod keywords, it's not a blanket catch all, a little completed to understand if you don't know regex but it looks like this
"crypto ?(trading|investing)","(should(| I)|could(| I)|can(| I)|how to|is it worth) (buy|sell|mine|min)(|ing) (btc|btcs|bitcoin|ether|etherium|eth|litecoin|ripple|altcoin)" 
submitted by provoko to stocks [link] [comments]

What Is an Investor

What Is an Investor
investor
Neither a speculator (who chooses about high-risk for high wages) nor a gambler (who wants to the chance of overall reduction for outside of percentage benefits) however one that whose primary targets are worth of their authentic expenditure (the primary), a stable cash flow, along with capital appreciation. See investment.
Investors can additionally embrace various current marketplace plans. Exotic traders tend to get and maintain numerous current industry indicators and could maximize their allocation burdens into specific strength categories centered on regulations like contemporary Portfolio principle ‘s (MPT) mean-variance optimization.
The others might be stock-pickers who make investments by the first examination of business financial statements and financial ratios.
What does it mean The Parabolic Curve Pattern Strategy
Fibonacci Retracements expert advisor, Learn Secrets About
Learn About Million Dollar Pips EA – Legendary Scalper
An investor, an average of, is manufactured differently by an individual dealer. An investor places richesse to make utilize of to get long term profit, though a broker attempts to build short term earnings by purchasing and selling stocks within and more.
Investors usually create returns by leveraging capital since equity or debt investments. Equity investments involve possession bets in the shape of firm stock that can pay gains as well as funding profits.
Financial debt investments could function loans long to new folks or businesses, or even at the buying bonds issued by authorities or firms that cover attention within the sort of vouchers.
Realtors are associations like commercial businesses or mutual funds which make investments in shares as well as different financial tools and also build large portfolios.
Many times, they can collect and swim money by several large shareholders (businesses or individuals ) as a way to shoot more significant investments.
As a result, the institutional traders frequently have much-increased industry strength and sway compared to retail traders.
One case of the is the”worth” traders that want to buy stocks using very lower share costs relative for their publication price.
The others Might Want to speculate long term in”growth” Shares That Might Be losing cash Right Now however indeed are increasing quickly and maintain guarantee for your long run, A large selection of investment vehicles exist for example (although not confined by ) shares, bonds, commodities, mutual capital, exchange-traded finances (ETFs), options, stocks, forex currency, silver, gold, retirement ideas along with property estate.
Investors usually do the fundamental or technical investigation to find out favorable investment chances, and also generally want to lessen risk while maximizing yields. Investors aren’t just a regular group.
They’ve varying hazard tolerances, funding, fashions, choices, and period frames. For example, many traders might favor incredibly low-risk investments that’ll cause traditional profits, like certificates of deposits plus specified bond solutions.
Other shareholders, on the other hand, tend to be more prone to undertake additional hazard to generate more significant earnings. These traders could put money into monies, rising stocks or markets.

Types of investors

There are two types of investors,
  1. Retail investor
  2. Institutional investor

1)Retail investor

  • Folks gaming in games of probability.
  • Individual Traders (such as trusts concerning folks, and also umbrella businesses formed by 2 or more even more to pool investment funds)
  • Collectors of art, antiques, and also other items of significance
  • Angel Traders (people and bands )
  • Sweat equity investor

2)Institutional investor

  • Investors could even be labelled depending on their fashions. Inside this regard, a significant distinguishing invest or psych attribute is hazard frame of mind.
  • Investment funding along with with private-equity funding, that function as expenditure decision collectives concerning an individual, employers, retirement programs, insurance policy policies coverage reservations, or alternative capital.
  • Businesses which create trades, either directly or through a property lender
  • Expenditure frees, such as property investment expects
  • Mutual funds, hedge Finances, along with alternative capital, ownership of that Might or Might not be openly traded(these Cash generally pool cash increased out of their owner-subscribers to Put Money into securities) Sovereign riches funding

Role of the financier

Financier is. Particular financier paths require licenses and degrees for example partnership capitalists, hedge-fund supervisors, believe in finance supervisors, accountants, stock brokers, monetary advisors, or even perhaps people treasurers.
Particular investing about the opposite side doesn’t have requirements and also can be ready to accept all with the way of this stock-market or from the method of mouth-watering asks to get your own money.
Even a financier”is likely to undoubtedly be a more technical financial contributor from the feeling it has encounter in liquidating the kind of agency it’s committing to”.
Even a financier is an individual whose chief job is facilitating or straight supplying investments into up-and-coming or recognized firms and businesses, usually involving significant amounts of cash plus generally involving personal equity and also venture capital, mergers and acquisitions, leveraged buyouts, corporate fund, investment banking, or even broad asset direction.
Even a financier earns money using this technique when their investment has been reimbursed with attention, from a portion of their provider’s equity given in their mind specified from the business bargain, or even perhaps a financier could earn money utilising commission, overall functionality, and direction service charges.
Even a financier may foster the achievement of the business by permitting the company to benefit from their financier’s standing. Competent and the capable that the financier will be the higher the financier should have the ability to donate towards the victory of this thing that is funded, and also the benefit that the financier will undoubtedly reap. The definition of, financier, is French, also derives out of the fund or even cost. (original post)
submitted by Red-its to forex__in__world [link] [comments]

Lazy European Portfolio Ideas

What etf's would you take if you where living in europe (forex risk). With the aim of growing by 5%-10% yearly but with a long term approach lets say 20-30 years, buy monthly and forget.(from etf bonds, to dividend etf's, to growth etf's, etc)
I'm still young (25 years old) and want to start investing, I don't plan to kill it with stocks/bonds just make some extra cash by dumping some of my money in a 'safe way' but not be actively trading I think you guys call it the lazy Portfolio.
I found a lot of information for american citizens and had a strategy till someone pointed out to me about forex risk and I realized I would be gambling.
So my question to you guys is if you were to create such a portfolio what etf's would you get. I just want to see what you guys recommend so I can start looking into them.
I also have another question, I was seeing these top 4 european etf bonds on investopedia https://www.investopedia.com/investing/european-bond-etfs/ and in the 5 years term there all in the negative they wrote it themselfs like how can you say they are the best etf bonds when some of them lost 15%. Am I understanding this correctly or no? I was looking at regular bonds yesterday they all seem to rise in price not decrease.
Thanks.
Edit: I'm from Malta
submitted by Dragonlordsk8er to investing [link] [comments]

First R1 of some stupid deficit fear mongering video

https://www.youtube.com/watch?v=uZLdqmA4nqw
First of all, I don't have any formal training in macroeconomics beside a course or two in college and what I've read online, but this video was actually shown in class by my prof(thankfully not an economics prof, but a finance prof nonetheless). There will be probably be some bad economics here of my own. I am sure you guys can do a far better R1 on this then I did, and I would appreciate if someone did, actually.
It is also interesting how this video is labelled "2014 Collapse" but has data from around the recession, when the government had an expansionary fiscal policy combined with a recession, leading to a larger budget deficit than usual.
At 0:37
Ever think about paying your mortgage with your credit card, that's exactly what uncle sam does(by issuing new bonds to pay interest on old bonds)
Wow, first of all, the interest rate on treasury bonds is far far lower than on any mortgage or credit cards. Secondly, a sovereign borrower is not like an individual. A sovereign government has a far, far larger credit "line", is perpetual, can increase their revenue substantially through tax raises, and their debt is actually demanded by hundreds of millions of individuals and institutions around the globe.
1:08
It's such a huge amount of money, uncle sam is running out of people to borrow money from
Standard & Poor's credit rating for the United States stands at AA+ with stable outlook. Moody's credit rating for the United States was last set at Aaa with stable outlook. Fitch's credit rating for the United States was last reported at AAA with stable outlook. . In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of the United States thus having a big impact on the country's borrowing costs. This page includes the government debt credit rating for the United States as reported by major credit rating agencies
http://www.statista.com/statistics/189302/trading-volume-of-us-treasury-securities-since-1990/
2:26
Remember the foreign governments that lent money to Uncle Sam, when they lent money to uncle sam, something interesting happened. It made the US look richer, and their countries look poorer
Does China investing the trillions of US forex they have on US bonds really make the US dollar appreciate?I understand capital inflows can increase demand for a currency, but did it really happen to extent that it provided a significant incentive for US companies to outsource operations, as he states later on?
When a country looks poor due to America, one dollar of our money, buys a lot of their money, so they can pay their workers only a few pennies a day. With such low labor costs, they can sell their products in America for lower prices than any American manufacturer can.
Obviously the difference in currency prices can affect the trade balance, but the inherent reason why Chinese goods and manufacturing is cheaper is because the the cost of labor and operations there is just a fraction of what it is in the US, in real terms.
2:50
The easiest way for American companies to compete, is to move their factories overseas, and pay their workers a few pennies a day too. This contributes to a recession
Ah yes, an increase in trade between China and the US and the wage depreciation among workers of America's massive industrial sector has been demonstrated to cause recessions
3:40
He[Uncle Sam] can't have the federal reserve make more money without making the inflation worse"
Obviously expansionary monetary policy tends to increase the rate of money supply growth in the economy and thus inflation, but the level of inflation wasn't above the threshold where it could be a problem. The recession actually had deflationary pressures rather inflationary,.
Since the 2008 financial crisis, the U.S. Federal Reserve has kept interest rates near zero and pursued a bond-buying program – now discontinued – known as quantitative easing. Some critics of the program alleged it would cause a spike in inflation in the U.S. dollar, but inflation peaked in 2007 and declined steadily over the next eight years. There are many, complex reasons why QE didn't lead to inflation or hyperinflation, though the simplest explanation is that the recession was a strong deflationary environment, and quantitative easing ameliorated its effect
3:57
Whether its in two months or two years, the day will come when uncle sam can no longer pay its bills
Its been more than two years since this video was posted on youtube(most likely just a retitled version of an older video), the US government still has by far the best credit rating in the world.
submitted by FlairCannon to badeconomics [link] [comments]

New in the game, but wanna yolo. I got questions and need inspiration!

I just started day trading a bit. Got some money and set up an account with a CFD trader.
I have invested a fair bit of money before that in the last year (100x what I am daytrading) but it was not mine, i had to play conservative buy bonds and etfs or mutual funds, and i am doing really bad so far.
First week trading I have made 1k euros playing the market even though I don't think I am rly good at that shit..
I have many questions about how to play. I am not looking to time the market like a prophet but I follow the news and some info I have through the trader and made some good buys and shorts so far, even on the same stock to take advantage of volatility.
My trader offers CFDs of shares from US and Europe, Forex trading, Commodities and Indices (snp500, nasdaq100, eurostoxx and an index for every european country and some emerging markets).
I have a different bid and ask price but no pay/trade. So far I am buying and selling stocks every hour following news and forecasts and made some good money.
I did some forex trades and made a quick buck but just folllowed info from the trader. I got no idea how they work or what my risk is exactly.
I bought some index and made most of my money off of it (nasdaq today long and last week short) but again i got no idea how i buy it and what my risk is or even if i buy an etf or another derivative.
What should I be trading apart from nasdaq and individual stocks of big companies?
How much is the risk doing Forex?
I have been reading here about options and read on investopedia about the difference with CFD and I have come to the idea that since I am outside US I should just stick to CFDs.
I really enjoy this community, memes and all and really I have devoted this money to make yolo plays and buy a car or build an empire who knows (it's not like my savings or anything just walking around money).
submitted by broker47 to wallstreetbets [link] [comments]

Forex Market Basics by Investopedia Investopedia - YouTube

INVESTOPEDIA – FOREX TRADING FOR BEGINNERS Sale Page: academy Value: 199 You just pay: 22 Status: This item is available Description: What will I learn? Buying and selling foreign currency is a fraught prospect, even for expert investors. Many investors use leverage, the practice of borrowing money to help them buy more currency. For example, if you wanted to trade $10,000 of currency, you would probably borrow at a leverage rate of 200:1. You could deposit as little as $100 into your margin account. However, if a trade goes sour, you may end ... If you're looking to diversify your investment portfolio, you'll surely consider buying some stocks, be it in the UAE or abroad. And if you're risk-averse, a It can be based on interest rate expectations OR it can be based on market uncertainty and a “flight to safety” with capital flowing from risky assets like stocks to less risky assets like bonds. After understanding how rising bond yields usually cause a nation’s currency to appreciate, you’re probably itching to find out how this can be applied to forex trading. COVID-19 has caused stocks to fall 32% and there are bond-buying opportunities investors haven't seen since 2008. Learn how to approach the 2020 corporate ... What will I learn? Examine how the Forex market works and how economic factors, commodities, and interest rates move currency values. Analyze Forex pairs, indexes and commodities to capitalize on trading opportunities. Build strategies to take advantage of long and short-term Forex trades. Take advantage of the Forex’s low commissions and fees and how to open and close trades in minutes. Buy bonds that mature at the same time. You may also consider buying many bonds that all mature around the same time, such as for a college savings account. If you are investing to fund your daughter's education, you buy a $100 par value bond each month with a maturity date sometime between the years your daughter will be 18 and 23. You will ... COP: The currency abbreviation for the Colombian peso. The COP has been the currency of the Republic of Colombia - a South American country - since 1837. The peso was fixed to the U.S. dollar for ... Forex (FX) is the market where currencies are traded and is a portmanteau of "foreign" and "exchange." Forex also refers to the currencies traded there. One of the easiest and time tested strategies for making money investing in bonds is called rolling down the yield curve. The strategy involves buying longer dated bonds and selling them after 2 ...

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Forex Market Basics by Investopedia

The foreign exchange market is a market where participants buy, sell, and exchange trillions of dollars worth of currencies daily. Learn the basics of the FX... Investopedia Video: Bond Yields - Current Yield and YTM by Investopedia. 1:57. Loan to value ratio [Video Investopedia] by AT &T. 1:31. SBO33 PRESENT - Economics 101 - Video Investopedia.mp4 by ... Official Youtube page for Investopedia.com - Your source for financial education. Join us on Facebook at http://www.facebook.com/investopedia Connect with us... Understanding Forex Quotes Investopedia Videos by Zigo. 1:34 ... 3 Most Important Things When Buying A Home by Investopedia. 1:35. Investopedia Video: The Basics Of Bond Duration by Investopedia ... Take the Investopedia Academy 'Cryptocurrency for Beginners' course: https://academy.investopedia.com?aca_ref=youtube Learn what an exchange is, how to acces...

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