How do investment bank take home their money?
Question:
Take Goldman Sachs for example. Do they make their money from fees? Or do they in fact invest their own money into the markets (stocks, bonds, etc)?
Answer:
Most comes from fees or margins (find someone selling something for $10, and another that requirements to buy it for $15 and then buy and get rid of at the same time and craft $5).
They make some money from their own investing, but they do not want to purloin too much of a risk. That is why they are 100 years old and haven't gone backrupt
Investment companies will charge commissions and fees for guaranteed services. However, a larger source of income is the investment of money into companies that they think will accomplish well and take-home pay dividends to them. Then, sometime in the to hand future they would plan to go the company for more than they paid for it.
I will not distribute a very long and detialed answer here, but will try to stress on the point your are aiming at: fees or physical risk taken.
The truth is investment banks sort most of the money from fees and commissions not from money they invest and risk.
For example most oftne they will help a company go and get funded (initial or more offten additional funding for exapnsion) through equity or debt property (equity = investors will own shares of the co.; debt = investors will simply lend money most likely through bonds). Or they will relieve with the getting hold of of a co. (ownership trasnfered in a big chunck).
They will once in a blue moon invest their own money but in most cases find (solicit, achieve through advertising) investors (in the regular big cases of large deal uaually big institutional investors like mutual funds, beat about the bush funds, pension funds other institutional investors approaching insurance co.'s etc). They will usually get a pretty nice cut from the total amount funded.
Let's vote you want to do an IPO for your new co. They can rob you through the registration process and finding interested first buyers of you shares. And in exchange take 3% of the deal.
It looks similar to banks, commersial or investment never in truth take risks contained by what they advertise. They carry other to do so.
Banks are the most standard and developed way of using other people's money. The mound itself will not stand on the side of the investor (saver) or the business operation (borrower). They stay in between. They will never lend or borrow. They will never invest ot nouns. They help (not for free) the others do that.
A typical commercial wall makes most of its money by soliciting deposits and using these funds to bring in loans. The loan rate is, of course, highly developed than the deposit rate. This is the bank's net interest fringe. Commercial banks also enjoy fee income which supplements their lattice interest margin.
An investment mound makes money primarily from fees they charge for managing property markets transactions (mergers and acquisitions- big money-makers, stock offerings, bond offerings, etc.). However, investment bank do "position" securities at times - maybe as a by-product of their transaction headship, maybe freshly as a temporary trading position where on earth they feel a short-term gain might be realize.
I am an international student surrounded by the US, i wonder if i could invest my money within the US bazaar?
Question:
I am very interested contained by invest someof my money in US bazaar.. i dunno where to start and what to know and how to do it.
Answer:
Yes, you can invest. Contact any reputable stock broker. You will also want to find out how to pay tariff on any income you make from your investment. You will entail to talk to the IRS for that information.
Are you looking to buy stocks? Anybody can do that. Just find a devout discount online brokerage and start buying! That's what I did.
(I'm using sharebuilder.com, it's the cheapest but not the most convenient)
Options closing moments up worthless?
Question:
If I own a contract of options which stands on an advantageous position (eg. 45 christen options near the underlying stock at $50) and for odd defence (eg. forgot to exercise or sell the options) if it does not return with exercised or sold before the expiry deadline, is near a way to recuperate this contract for the profit? Is the expiry date the hard-solid deadline before the option become worthless?
Can you please provide some strategies to avoid this situation?
Also, another situation i'm curious about is when the online brokerage server go down on the options expiration year (usually 3rd Friday) which makes the odds trading or exercising impossible. Are the traders liable for the loss?
Answer:
(I assume that you are referring to long options contracts, since in-the-money short contracts will be automatically assigned by the OCC upon expiration.)
In direct answer to your question:
- No - once expiration-Saturday has come-and-gone, here is no way to recuperate the contract for profit;
- Yes - the expiration date is a "hard-solid deadline".
Using personal illustration - yes, some time ago, I had some profitable in-the-money long call that expired worthless because I forgot to either put on the market or exercise them. (They were $0.50 in-the-money.)
HOWEVER - In September 2006, the OCC (Option Clearing Corporation) set automatic exercise thresholds of ALL option contracts, both long and short. And SOME brokerages also have have there OWN policies/protocols for automatic exercise of long option as a way to protect their clients (you involve to ask your particular brokerage for info.) I hold heard and see different thresholds mentioned: $0.05, $0.25, $0.75 in-the-money for automatic exercise (see below).
NOW, the OCC will automatically exercise your long call (or put) option on the expiration date and you will be PURCHASING the underlying stock at $45 per share (using your example). This is similar to the auto-exercise of puts and calls on indexes, that are automatically cash-settled at execution - near is no worry nearly remembering to close-out the positions.
The PROBLEM that can occur is if your sketch does not have the outside edge or buying power to actually BUY the appropriate number of shares at $45. My kindly is that, in this travel case, your brokerage will "break the trade" if you cannot come up with the appropriate outside edge or cash.
Again, a personal illustration - before this year, I just tolerate some long calls be auto-exercised so that I done up with the underlying stock (but first I made sure that I have the margin to do it).
Strategies: you should return with in the need of ALWAYS checking with your broker for any sympathetic option positions the week of expiration. You can ask your broker to remind you, but don't depend on that - remember, it's YOUR money at stake! You MAY be capable of give instructions or "standing orders" to your broker or brokerage to close any enlarge option positions on expiration-Friday (or later business day formerly actual expiration), but the same presage applies - it's YOUR money at stake.
In answer to the other situation - the answer depends upon the specific language contained by the contract that you signed when you opened the reason with the online brokerage, and whether they own human brokers available to take cell phone orders to close or exercise risk positions - it is very possible that they are not liable surrounded by such a situation! READ YOUR CONTRACT.
But let's say that they DO own human brokers available - in which casing, it is probably YOUR responsibility to call one of them and place a cellular phone order to any close or exercise the options.
BTW - "option expiration day" is the Saturday following the third Friday of each month - which method that the third Friday is (usually) the last business light of day to close your position. (Exceptions for Good Friday or other market closures, within which case the final business day would be Thursday.)
====================
Automatic Exercise
A protection procedure whereby the Options Clearing Corporation attempts to protect the holder of an expiring in-the-money risk by automatically exercising the option on behalf of the holder.
http://www.cboe.com/learncenter/glossary...
http://www.cboe.com/learncenter/workbenc...
... Individual investors may be automatically assigned or exercised at expiration by The Options Clearing Corporation if the preference is 0.75 or more in the money. Also, most brokerage firms enjoy rules under which option will be automatically exercised; check with your broker to determine which automatic exercise rule may apply.
http://www.888options.com/help/faq/assig...
Q: ... My broker told me that call are "automatically" assigned when they are a certain amount contained by the money at expiration. Is there is a opening that I can avoid being assigned?
A: While respectively firm may have their own thresholds, the Option Clearing Corporation's auto exercise threshold as of September 2006 is 5 cents (.05) surrounded by the customers account. ... Customers and Brokers should check beside their firm's Operations Department to determine their company's policies regarding exercise thresholds.
http://thismatter.com/money/options/trad...
The OCC automatically exercises any risk that is contained by the money by at least $0.50 (automatic exercise), unless notify by the broker not to. A customer may not want to exercise an option explicitly only slightly within the money if the transaction costs would be greater than the net from the exercise. ... Exact procedures will depend on the broker.
https://us.etrade.com/e/t/kc/oic?id=5001...
... The Option Clearing Corporation's auto exercise threshold is 75 cents (.75) surrounded by the customer account. The automatic exercise threshold surrounded by firm and market originator accounts is 25 cents (.25). ...
There is an auto-exercise point but I can't remember what it is. I thought it was similar to 1.50 or 2.00 in the money, but I can't remember. The remedy expiration date is the third Saturday of the month no exceptions and there is no repossession process that i've ever heard of aside from what I mention above. Check the Chicago Board of Options website for more details.
Assuming you own American exercise option why don't you exercise them the year before? You don't own to wait until the finishing day (unless they are European options). Also, if the brokerage server go down call them - they own to execute your order no situation what. They would be at fault if they couldn't and you could claim them for the amount you lost.
I would set reminders contained by your cell phone or email system to check your options on the Monday since expiration. That way you enjoy all week to remember, although, if you are trading option I would be looking at them everyday.
How and where on earth to buy shares?
Question:
Answer:
Shares of what? Stock? a condo in Biloxi MS? You want to be fragment owner of a trailer park in Rome NY?
Edit your grill and you can get great relief on RunEye.com
There are two options for you.
1. You should confiscate any opportunity for a public offer ususally advertise in the the media.
2. Consult a broker for direct purchase of shares at the stock exchange in any company of your choice. Though, this is at the prevailing rate and a moment or two addition for brokerage commission.
Contact to any D.P.(Depository Participant)in your nouns. U can find the adds. on web or else shift to ICICI web site. Then surf trellis sites that gives Market rewiews approaching our Yahoo.com. Also keep on reading News Papers for Market actions.U will get the approach ! Where there is will in that is way! righteous Learning!
Maybe contact your local - large Bank - for info.
They may bestow Stock Buying services.
Consider ETFs or Mutual Funds, to begin beside, ok
Have a look at this page to invest small amounts of money:
http://www.best-stock-trading-systems.co...
Open a brokerage account at Zecco.
you should approach to a broker i.e. reliable like reliance money ,sharekhan,smc or india bulls they will charge rather and they will give you adjectives the knowledge about demat account , trading picture and share trading or investing etc.
if u r new to this chain then u should give somebody a lift help of any other household member or friend .
www.Ways2gain.com/todaytrading...
www.stocksadvisor.tk/
www.jayan.bravehost.com
www.content.icicidirect.com/ma...
What is the approximate numerical pro for the DV01 of a par 10 year treasury?
Question:
Best Regards..
Answer:
10 year UST is yielding 4.654 right immediately. A ten year bond trading at par yielding 4.654% would hold a duration of 7.92 and a DV01 of $0.792 per $1000 of face.
VaR of 100 million of 10 year treasury?
Question:
Can you give a back-of-the-envelope estimate of the 1-day 95% VaR of 100 million of 10 year treasury? Describe the steps that relinquish this estimate, using as volatility measure the annual volatility of the bond relinquish.
Answer:
Assume annualized bond volatility is 6%. This is a rough guess but I think it's close. Get a each day vol. Divide 6% by the sqrt of 252 because annual vol = daily vol * sqrt (# of trading days. That is your 1 s.d. move. I seize .00378. Double it a 2 s.d. move to get a 95% event. My stats is rusty you might check that rule of thumb. Multiply the result by $100MM to go and get the value at risk. I procure about $756,000.
So would I lose 75 bps on a 2 s.d. daytime? It generally pass the smell test.
Stock alert?
Question:
Answer:
42!
Your question is not clear, but if you received an email message next to the subject Stock Alert, it is probably part of a pump and dump venture. Someone finds a company whose stock sells for pennies and is meagrely traded, buys a large body, and then sends out millions of emails to folks urging them to buy the stock. They pump the stock. If people start buying the shares, they walk up in price and the inventive buyer sells at a profit, (dumps the shares) going away the rest holding worthless stock. If you pay attention to these stock alerts, you are guaranteed to lose money. I receive frequent of these and always forward them to the Securities and Exchange Commission (SEC). They examine for these types of swindles. The SEC address is enforcement@sec.gov.
Hi..
You will get perfect value by using this blog.
Free courses as economically as trading videos.
Learn more or less MarketClub's buy/sell alerts:
Federal reserve ridge meeting?
Question:
where can I find out when they join to adjust intrest rates?
Answer:
They have a net page where they post it:
http://www.federalreserve.gov/boarddocs/...
The subsequent meeting is on 4/23/2007.
Go to the Federal Reserve Bank website
http://www.federalreserve.gov/
Are here any websites that document foreign companies traded on nasdaq and NYSE?
Question:
Answer:
There is. The NYSE web site index all foreign companies timetabled on that exchange. Nasdaq lists those traded on nasdaq also but not surrounded by a convenient manner. Another site that list all adrs traded on adjectives exchanges including foreign exchanges and as restricted stocks is
http://www.adrbny.com/dr_directory.jsp?p...
Now there are some foreign stocks traded on the pink sheets also that are not scheduled in the above join because the are not adrs. They are traded as native securities but within U S dollars. You can find them on the pink sheets web site.
Here are 2 portfolios of foreign stocks that trade within the US markets, one of Indian stocks, one of Chinese stocks:
http://www.top10traders.com/viewportfoli...
http://www.top10traders.com/viewportfoli...
Here is my portfolio of weave energy stocks from http://www.top10traders.com
http://www.top10traders.com/viewportfoli...
How can I trade currencies beside no money down ?
Question:
Answer:
You can trade currencies on margin - approaching 10 to 1. However, that means you entail to put up the initial 10%. If you don't have the brass, you would need to borrow it. Here's some thinking:
1. Loan from family/friend.
2. Loan from Prosper.com
3. Bank loan using your home or car as collateral
4. Credit Card
Now that I've answered your cross-examine, I will tell you that its probably NOT a apposite idea for you to trade currencies because 90% of adjectives traders loose money...and the 10%? Guess what? They don't need to borrow money to trade next to no money down.
I think you can put your 0% equity surrounded by your no money down house as collateral.
you can also sell in the buff puts and lose your house
yeah its called demo trading. Tons of websites own those.
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Open a demo sketch.
Hey,
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Let me underscore that this is a long term investment strategy and not a catch rich quick program. The forex marketplace can be very tough and complex and you necessitate to arm yourself with the proper know-how and system to reap the riches and rewards. It doesn't happen within 24 hours. You need to know that.
This is a drastically simple and easy system to take to mean and I’ve never seen near any other program where someone near no prior trading experience or knowledge of the Forex bazaar could invest and actually be profitable.
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How long since a company pays a dividend do you hold to own the stock contained by directive to qualify for the dividend?
Question:
A big thanks to answerers.
Answer:
The announcement of the dividend will include an "ex date". For owners of dictation on that date, you'll get the dividend. Remember that stocks run 3 days to settle so you'll need to buy at tiniest 3 days before the diary date in demand to be an owner of record.
Don't reflect on that you can buy the stock, take the dividend and after sell the stock put money on out. If the dividend is $1 then the stock will move about down by $1 on the ex-dividend date. Also, you'll pay routine taxes on the dividend if you do that so you'll be taxed at your levy rate.
that "record date" is established by the corporation when issuing the dividend, and vary from time to time and company to company
Dividends are payed out every QUARTER(4 months).The quarter you invest in, you next get rewarded the following quarter.
Most of the company that pays dividend are matured companies. Most of the growth young companies that are 3 to 8 years are mostly not paying dividend they usually re-invest to somewhere else approaching additional funding surrounded by R&D. marketing etc. Definitely you have to own the stock to qualify but their a unquestionable date that you have to own it if not you are not qualified to get the dividend. I hope this help.
Federal reserve sandbank?
Question:
Answer:
http://www.federalreserve.gov/
37!
Uncle Ben
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What is the approximate numerical efficacy of delta for a weighty in-the-money telephone way out?
Question:
Thank all
Answer:
In the money? 1. The phone up price and the option price will move surrounded by lockstep.
Very close to 1.00
0.93572
Basic equity option question(s)?
Question:
im looking into trading options (buying calls) and own a few questions....
let assume the following;
yahoo stock price right now; 32.00
yahoo may 37.50 call are currently trading at 0.05/0.10
Implied volatility: 36.39
Time value: 0.15
Days to expiration: 32
immediately lets articulate i think yahoos stock price will walk to 36.00 before the preference expires. i do not plan to excercise the option...i in recent times want to buy the call and put on the market it when the price of the underlying increase.
a.) i can buy 100 calls for $1000, correct?
b.) is in attendance anyway, given the information i have provided (impled vol, days to expiration, time value), to determine what the price of the option will be if yahoo's stock price goes to read out, 36.00?
c.) if i cannot answer (b.), then let assume the options rise contained by value to $0.50 i can consequently sell my 1000 call for $50,000? is that correct? (seems like a tremendously dramatic movement)
many gratefulness
Answer:
Yes, assuming that 100 calls are offered at .10 (there could be a reduced amount of offered) you could buy 100 for $1000.
No, there is no method to know the price of the calls because WHEN the stock go to 36 is really the vital piece of the puzzle. If YHOO go to 36 tomorrow then the call might go to .50, if YHOO go to 36 on the day of expiration afterwards the calls will jump even lower (no bid, offered at .05).
No, your options aren't worth $50,000. You started near $1000, your options appreciated by 5X, so you bring to a close up with $5000.
How and when the stock rally is what really matters here. Option traders consider themselves more traders of volatility than anything else. If you buy the call and the stock is very volatile upward afterwards you'll make money. If the stock is not volatile, even if it go up, you'll lose money. This is expiration week for options so look at how cheap some option set to expire on Friday are now (don't be confused by those stocks that will announce yield between now and expiration).
a) correct
b) no, It's base on supply and demand simply.
c) yes, in view you could.
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The steaming quotes articulate they are on but arent working .Why?
Question:
Answer:
they are all wise saying the same piece for me too. i think it's lately a glitch. they are delayed anyway, and update regardless sooo.. the streaming quotes don't really add much