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Braddon

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Everything posted by Braddon

  1. Hello Mark, Thanks for a great question. A triple bottom pattern shows a downtrend that is about to change to an ascent. It takes a “WV” shape and has three lows. At the first low, the stock’s price reaches its peak and heads to the preceding support level. This leads buyers into the trade and increases the asset’s value, therefore, creating the second bottom and peak Likewise, the final bounce forms the third low allowing traders to take a long position. However, this only happens when the value of the stock creates the third bottom over the prior resistance. The aftermath is an uptrend and piling pressure to offload the security. In turn, the price reverts to the past low triggering an ascent. If the market takes the same course a third time, resulting in a new low, the pattern is deemed complete when the position surpasses the resistance level. A triple bottom not only occurs in bar and line charts but also candlestick patterns. It’s among the slowest chart models to mature.
  2. Hi Curtis, Thanks for asking. Delta and gamma indicate how an option’s value reacts to price movements. Delta It determines the sensitivity of an option’s value to the underlying asset’s movement in market price. The delta ranges from 0-1 and 0 to -1 for call and put options respectively. Being close to 1, the delta is higher in ITM options as opposed to OTM options where it’s nearer 0. As such, the delta is positive in call options and negative in put options. It’s useful for gauging whether an option’s expiration will occur in the money. Gamma It determines the sensitivity of delta changes to the underlying security’s price movements. Demonstrated as a percentage, its values start from 0-1. The gamma is positive when you’re long on call or put options and negative when you’re short on call or put options. Therefore, values of short-term ATM options react the most to stock-price changes. Note that the delta and gamma may vary depending on variables such as duration to maturity, volatility, and interest rates.
  3. Hi Peter, Thanks for coming here. According to the latest Q4 release, Sony remains an electronics giant after announcing 35.45 billion yen in profits. Even so, it still falls below the 82.73 billion yen earned last year and their 73.77 billion yen forecast. The company attributes the decline to a reduced home electronics demand stemming from the COVID-19 wave. This is in addition to suspending gadget production in several factories to minimize the spread. Since fewer phone purchases translate to decreased sensor demand, the organization expects its gains to sink by approximately 30% this year. As such, Sony is yet to project its Q2 consumer electronics and smartphone sales. In the previous quarter, for example, the distribution of Xperia phones plunged by 63.7% from 700,000 to 400,000. That notwithstanding, the gaming side stands to benefit from people’s stay at home. What’s more, the PS5 is on its way to the market this year.
  4. Braddon

    Home Depot

    Hi Predrag, Home Depot has been on a roll with its shares recently touching $248.32. This is more than 71% in gains after its $140.63 March rock-bottom. With COVID-19 flooring most businesses, the retailer attributes its success to employee well-being. To begin with, it has increased personal time off for not only hourly workers but also non-hourly employees most prone to Coronavirus. This together with weekly bonuses and double overtimes has kept workers coming. The incentives have cost the store over $640 million which translates to roughly 60 cents per share. In a past statement, boss Craig Menear mentioned the organization’s commitment towards supplying essential commodities without risking their customers’ health. According to Menear, controlling shopper traffic has impacted sales in various markets. Merchandising EVC Ted Decker also noted a rise in online purchases from March’s 30% to triple digits in April. Best of all, the outlets remain open in most states because of HD’s status as an essential retailer.
  5. Luckin Coffee stock exceeded its IPO by 20% on day one of going public in May last year. Though the closing price was $20.38, the shares opened at $25 and even hit $25.96 before some of the gains went with profit-takers. Making $561 million from the public offering, the group’s value was approximately $4 billion at the time, barely two years after launching its first outlet. The Starbucks rival offloaded $33 million worth of American depositary shares, surpassing its $30 million target. While the coffee seller lost around $250 million during the nine months preceding September 30, 2019, its sales rose almost seven times YOY to $410 million. However, the company has been on a downward trajectory after confirming internal fraud this April. It turns out last year’s Q2, Q3, even Q4 results were fake. Ex-COO Jian Liu together with several juniors forged about $140 million in dealings. As a consequence, the organization’s shares dipped by almost 90%. This is in addition to the losses brought about by the Coronavirus outbreak.
  6. Braddon

    What are Leveraged ETF?

    Hakiza, thanks for asking. Leverage is investor speak for obtaining an advantage through debt taking. Therefore, leveraged Exchange Traded Funds borrow money in an attempt to double or triple returns within their benchmark each day. As such, when you win, it’s in a big way. When you lose, it is not pretty. Leveraged ETFs are speculative, risky, heavily managed, and extremely short-term forms of investments. They are designed for single day holding. Leveraged ETFs, as marketable securities, apply debt and financial derivatives to magnify returns of underlying indices. A normal ETF will track, on a one on one basis, a security within its underlying index. A leveraged ETF, however, will aim for ratios of 2:1 or 3:1. Leveraging ETF investments are double-edged swords. This means your investment is prone to significant gains, but also when you make loses, they can be monumental. Most indices, such as the Dow Jones Industrial Average and the Nasdaq 100, are covered by Leveraged Exchange Traded Funds. Managers rebalance securities and obtain financing each morning. Active administration mean fees are higher than normal ETFs.
  7. Hi Walter, The least amount you can pay to invest in an ETF is the purchasing price of one share of that ETF. To this, you need to add the cost of commissions and brokerage fees determined by your chosen broker. You need to think about capital gains and other taxes relative to your ETF too. In other words, to determine the minimum ETF investment, you have to take into consideration costs associated with your investment. Applying an expense ratio helps you find out how much ETFs cost. The cost amount is then skimmed from your trading account and goes into settling your ETFs’ total annual expenses. Do note that your expense ration will not include brokerage commissions you need to pay to enable you purchase or sell off your ETF shares. If you buy shares monthly, commissions add fasts. An average ETF comes with an 0.44% expense ratio. This means your ETF fund will set you back $4.40 in fees annually for each $1,000 you invest
  8. Braddon

    Uber

    Thanks Michael for a great question. Uber stock is experiencing a turnaround as the business fights to make profits. Despite its $0.59-per-share gains in 2018, it lost $5.04 a share the following year. Similarly, this year’s Q1 results were worse than expected. Instead of $0.83, the taxi service missed $1.70 per share, making the total quarter loss nearly $3 billion. Uber even reported a 14% staff reduction to minimize operating costs. But all is not lost. The stocks climbed by 6% thanks to Uber Eats, the service’s food-delivery branch, that recorded a 54% improvement for the quarter. The food unit will come in handy to redeem company shares seeing the stay-at-home Coronavirus directive has hampered the cab business. Its Uber Health feature is equally promising, with its YoY exceeding 200%. Moreover, the stock could rise further after lockdown measures are lifted. However, the return to normalcy presents new challenges. For instance, Uber increases congestion, a problem every city wants to solve.
  9. Hi Paul, In day trading, an Opening Range Breakout strategy consists of taking a position once a price breaks below or above the previous candle low or high. In the strategy, you can pick your preferred time frame. An opening range identifies the low and high of your chosen period, once the market has opened. Generally, that is the initial 15 minutes or 30 minutes of trading. Within this time window, first pinpoint the low or high of the day. Secondly, wait for prices to move below or above your range. Thirdly, proceed to initiate your trade depending on the direction of price movements. Take time to deliberate on your most optimum market time frame. That way, you avert many whipsaws in your future trading transactions. The most common time frames fall between 15 minutes and 30 minutes, depending your underlying assets. The fundamentals of an Opening Range Breakout do not change whatever time frame you pick.
  10. Call Debit Spread, or a Bull Call Spread, defines a bullish strategy involving a pair of simultaneous call option strike prices. First, you purchase a ‘one at the money’, or an ‘out of the money’ call. Second, you make a sell of one call a little further away from the money than the call you bought. In a bull call spread, you are buying an option on a particular security, at a certain strike price. This is as you sell that same option, with a similar date of expiration, at a higher strike price. The core bull call spread tenet is that premiums on options bought are higher than those sold. They also call for upfront investments. This is the reason an alternative name is Debit Call Spread. Buying options for lower strike prices is a long call, while a sale at a higher strike price is a short call. The two transactions become the call legs of your spread.
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