Trading

How to Buy Stock Online

Step-by-step guide to online stock trading Buying stock with an online broker is easy – but you do need to know a few points before pulling the trigger on your online trade. Here are some pointers to get you started. Anatomy of a Stock Quote When you pull up a stock quote, the first thing […]

Options

Understanding Option Greeks and Dividends: Gamma

Keep in mind that delta is dynamic: it changes not only as the underlying stock moves, but as expiration approaches. Gamma is the Greek that determines the amount of that movement. Gamma is the amount a theoretical option's delta will change for a corresponding one-unit (point) change in the price of the underlying security. In […]

Options

Understanding Option Greeks and Dividends: Rho

Rho is the amount a theoretical option's price will change for a corresponding one-unit (percentage-point) change in the interest rate used to price the option contract. Typically the interest rate used here would be the risk-free rate of return. The rate associated with investing in Treasuries is traditionally defined by market experts as virtually risk-free. […]

Options

Understanding Option Greeks and Dividends: Theta

Theta refers to time decay and is the amount a theoretical option's price will change for a corresponding one-unit (day) change in the number of days to expiration of the option contract. Each moment that passes melts away some of the option's value. Not only does the premium melt away, but it does so at […]

Trading

How are “Hard-to-Borrow” fees calculated?

A hard-to-borrow fee is an annualized fee based on the value of a short position and the hard-to-borrow rate for that position. The fee is charged on a pro-rated basis depending on how many days you hold the position short. It will be assessed to your account at the end of the month or upon […]

Options

Protective Put Strategy

You buy stock because you're bullish and expect the stock's price to go up. Since you're bullish, chances are you aren't too preoccupied with the downside. But as we all know, markets can shift quickly. Puts are a handy tool to help lock in profits on your existing positions in the event of a sudden […]

Options

Understanding Option Greeks and Dividends: Vega

Vega is one of the most important Greeks, but it often doesn't get the respect it deserves. Vega is the amount a theoretical option's price will change for a corresponding one-unit (percentage-point) change in the implied volatility of the option contract. Simply stated, Vega is the Greek that follows implied volatility (IV) swings. Don't forget […]

Mutual Funds

Mutual Funds Tax Guide

What are mutual funds? A mutual fund is an investment company that pools money from many people and invests it in stocks, bonds, or other securities. Each investor owns shares, which represent a part of these holdings. Investors can buy shares (or portions) directly from the fund or through brokers, banks, financial planning professionals, or […]

Mutual Funds

Mutual Funds Tax Guide

What are mutual funds? A mutual fund is an investment company that pools money from many people and invests it in stocks, bonds, or other securities. Each investor owns shares, which represent a part of these holdings. Investors can buy shares (or portions) directly from the fund or through brokers, banks, financial planning professionals, or […]

Trading

What are unsettled funds and why am I being warned or restricted from using them?

Under Regulation T of the Securities and Exchange Act of 1934 all transactions in a cash account must be paid for in full and are also subject to settlement rules. If you purchase a security with settled funds in your cash account you may sell that security at any time without restriction. If you purchase […]