The INDEXSP:.INX is nothing more than the S&P 500 Index. Known as the Standard & Poor’s 500 and created in 1923, the S&P is an American stock market index comprised of 500 of the largest companies listed on either the New York Stock Exchange or the NASDAQ. This index, like all other indexes, is capitalization-weighted, meaning the price of the index is created by the total weight of all 500 stocks. Here is the current breakdown of this index.
We get it…you want exposure to oil and think Barclays’ NYSEARCA:OIL is the best way to do it. We aren’t surprised about this at all.
I mean…oil is being talked about a lot lately and has been in play for well over a year now. OPEC has meetings multiple times a year where they talk about potentially cutting production supply in order to increase the price of crude oil.
Regardless of the outcome, whenever there is an OPEC meeting, crude oil is in play as it brings a lot of volatility. And when there is a lot of volatility we can be sure that there will be two-sided market action for us, thus, liquidity and opportunity.
NYSEARCA:OIL is an option for getting exposure to crude oil. Let’s see if it is the best solution for not for you.
Which of the following is not one of the responsibilities of the Federal Reserve? This is a question we received from another young client of ours who is interested in learning more about the Federal Reserve and specifically what they are supposed to do.
With interest rate hikes all the buzz as of late, this is probably a great time to throw in our two cents on the Fed. Very few people know why they were created and that their role has significantly expanded with every financial crisis that occurs.
They were founded with the mandate to provide liquidity to the system when a capital injection was required or necessary. However, they have a few more mandates than that (privately). Here we go…answering the question “which of the following is not one of the responsibilities of the Federal Reserve?”
This is the stock we are going to be discussing here. I know you are laughing right now but we suggest reading the rest of this article to really find out how bad NYSEARCA:JDST is.
Yes…that is $347 to $11.75 in less than a year. NYSEARCA:JDST is the Direxion Daily Jr Gold Miners Bear 3x ETF and it is an absolute pig. Like all ETF’s that are priced from their futures, there is a crazy negative drag to these triple leveraged instruments. However, if it is truly a liquid product, we should be adding it to our list because we add every liquid product we can get our hands on. This gives us true diversification.
Without any more hesitation, let’s see if NYSEARCA:JDST is liquid enough to be put on our list of tradable products that we will definitely only be trading from the short side.
Let’s find out what this Eaton Vance Tax-Managed Diversified Equity Income Fund ETY is all about. We have been fielding a lot of questions about this stock as a lot of our clients and students have been hearing about it lately.
Just like we have done many other times, we will go through ETY like we do everything else. We will talk about its liquidity because we do not ever trade or invest in any products that are not incredibly liquid.
To be honest, a stock that is managed by a professional having that long of a name scares me as it makes it look like a marketing ploy. We will give it a fair shot and see if we should add ETY to our portfolio or not.
I have a question for you. How far do you think the INDEXDJX:.DJI (Dow) can go up or down over the course of the next year?
This is a fun one for us because most people will throw out numbers that they may have heard on TV or read in the likes of the Wall Street Journal or Bloomberg. Maybe publications come out with a price target for not only the INDEXDJX:.DJI (Dow), but also the INDEXSP:.INX (S&P 500), or any index or stock in the world for that matter.
We are going to show you that is it not a guess. Financial institutions might send their best and brightest all over the world to give them the edge over the competition in coming up with the most “accurate” price target for the INDEXDJX:.DJI (Dow). While this is great and we have no opinion of how these institutions spend their money, we are going to show you how in about five seconds time, you will be able to know the EXACT expected price move for the INDEXDJX:.DJI (Dow) over the course of the next year. This number will not be a guess and it will be EXACTLY what the market expects and prices in.
Trading the INDEXDJX:DJI (Dow)…this should be fun and a nice addition to our ultimate guides to trading the INDEXSP:.INX (S&P 500) and the INDEXNASDAQ:.IXIC. We all know the Dow…it’s the one that gets talked about every single day on the likes of CNBC and Bloomberg. The INDEXDJX:DJI (Dow) was created by Charles H. Dow (who was also a founder of the Wall Street Journal) back in 1898 to serve as a benchmark for the greater US stock market. At that time, 12 companies were added to the Dow with only General Electric still a member of the group of now 30 stocks. Here is a list of the 30 stocks there today:
“Which of the following statements about federal student loans is true?”. This is a question we received in a portfolio consultation last week with a prospective client who also happens to be just out of college.
You see, this individual wants to get involved in the markets, compound the earnings of his profits over decades, and be able to manage his money himself. We applaud everyone like this, in fact, we hate Wall Street and believe everyone can manage their money and be very successful in doing so.
The reality is that student loans, however valuable they are perceived to be, cause significant damage to not only a majority of the individuals who get them but also for the broad overall economy. Here we go…our answer to the question “Which of the following statements about federal student loans is true?”
The INDEXNASDAQ:.IXIC is the Nasdaq Composite, and along with the Dow Jones Industrial Average and the S&P 500, is one of the most followed indexes in the world. The Nasdaq stock exchange, which opened in 1971, is a place for innovative technology companies to be listed and have their stock traded. Currently, there are about 2,500 total stocks listed on the Nasdaq exchange and the INDEXNASDAQ:.IXIC is a way to track the changes of the entire Nasdaq market. Here are the top 10 stocks traded and available on the INDEXNASDAQ:.IXIC along with their current market cap and industry.
|Kraft Heinz||$111.95B||Packaged Foods|
The Nasdaq is obviously the best gauge for all things technology and biotechnology and is watched by all institutions and professional money managers and traders all day. Why? Because some of the names in this list in the Nasdaq are incredibly correlated to the index.
Makes sense, Apple, Google, and Microsoft move with a 90+ correlation to the Nasdaq. For the rest of this article, we are going to talk about the top three ways to have immediate exposure to the INDEXNASDAQ:.IXIC (Nasdaq) and talk about which ones are right for you.
Yes, the famous stock market crash of 1929. Many people speak about it today as it is still the worth stock market crash of all time and lead to the largest recession and subsequent depression in history.
There are a lot of competing opinions for what caused this crash. Maybe historians and universities have given their opinions on the crash. However, in 1929 the stock market crashed because of some of the loose monetary policies at the time (that we still see today).
This article is going to be very much an opinion piece at it is difficult to say exactly what caused the crash back then, however, we are here to say that in 1929 the stock market crashed because of two reasons.
Which of the following conditions will maximize the amount of interest you earn? This is a question we received last night during one of our weekly webinars. It is a very interesting question, and we are happy to continue answering these questions from customers and readers to everyone on our blog.
Getting any interest of any size these days is something that is very difficult. We are currently in an environment where almost half the world yields negative interest rates, with over two trillion dollars worldwide currently collecting negative interest. Wow.
There are two different conditions that we can point out that will help us answer the question to “which of the following conditions will maximize the amount of interest you earn?” in this short article. Buckle up as it will be fun!
Yea…after I finish writing this article about CMG options I am definitely going to go to Chipotle and get one of these bad boys.
But before that, we are here to talk business, and specifically the making money business.
Every day there are hundreds of opportunities in the market, some being better than other. We would like to let our customers, clients, and readers understand how to narrow their focus to only the best opportunities which give us the best chances of making money.
Chipotle is a $400+ stock. While there are a lot of opportunities in Chipotle each and every day, we want to make sure CMG options are liquid enough for our money. Let’s see how they stack up.
Okay, Uncle Sam…
But back to reality. We have been in a historically low-interest rate environment over the last ten years or so with interest rates currently hovering around an all time low. While the Federal Reverse just raised their overnight interest rates by 25 basis points, we still have barely moved the needle towards normalizing rates.
If the Fed is going to continue somehow to raise interest rates without the market crashing, it is likely we will see and overall rise in not just short-term interest rates (like the Fed funds rate) but also in long-term interest rates (30-year bonds, mortgage rates, etc.).
The best way to get exposure to the longer-term interest rates would be trading TLT, the iShares 20+ Year Treasury Bond ETF. And as always, if TLT options are better than TLT stock, we will be trading options folks.
There is no question about it. Valeant Pharmaceuticals International, Inc is one of the most hated stocks ever. Why is it so hated?
There are a lot of reasons why a stock can be so universally hated. The street might not like the CEO or the company may have very strict working regulations. But above all else, stocks can be hated more than others because of the amount of money they lose for investors. That much is fairly obvious.
VRX has been in the news for a long time now ever since Bill Ackman of Pershing Square became an activist for the company, shooting its stock price up towards $300 a share before crashing and burning down to almost single digits.
But because Valeant is so hated and so beaten down it provides a very nice buying opportunity for us and we feel the best way to gain exposure would be through VRX options.
Here is the situation. You want to get long oil. You also want to get long natural gas. You also want to get electricity. You don’t know what to do because you want to buy all of them but think that might be too much work.
Many investors have this issue. They like all of these different stocks in the same sector but they don’t want to go through all of the effort to buy each of the names they like. For these reasons, ETF’s were created to allow investors exposure to a broad range of companies typically in the same sector.
XLE is (get ready for this ) The Select Sector SPDR Trust – The Energy Select Sector SDPR Fund. What a mouth full. This allows investors a simple way to get exposure to all things energy while at the same time paying shareholders the XLE dividend!
Ah…the dividend. The yield seekers dream. Own a stock and get paid to do it. Not bad at all.
Maybe retirees, pension funds, and passive mutual funds love investing in dividend stocks because of the yield that is generated from the dividend payment. It makes sense. Buy a stock. Get paid to hold that stock. Live off the dividend or pay pension payments off the dividend. I get it.
VOO (Vanguard Index Funds – Vanguard S&P 500 ETF) is one of the most well know index funds in the world. Managed by the multi-trillion dollar company Vanguard, VOO gives investors overall exposure to the markets that very closely mimics the S&P 500. One of the benefits of VOO is their dividend payment, and we will spend the rest of this short article discussing everything VOO dividend.
We were very happy to hear the question “which of the following is not a characteristic of a perfectly competitive market?” during our latest weekend webinar. The reason we were so excited is because answering a question like this is our bread and butter. While some of you might be saying this isn’t a crazy or an extra special question, we believe having the proper understanding of this simple question can be the difference between one investor making money and another losing money. We kid you not.
Here we go…answer to the question “which of the following is not a characteristic of a perfectly competitive market?”
You might have to keep on looking as the Google dividend is nonexistent…
But before everyone gets all up in arms about the fact that Google does not pay shareholders a quarterly dividend, we need to have a full understanding of what a dividend is, why companies give shareholders a dividend, and specifically why companies like Google do not “yet” pay a dividend to shareholders.
Don’t be mad at Google just yet. In fact, after reading this article, we are pretty sure you will be happy without a Google dividend.
This looks like technology…right?
Here is the problem. You love all of these technology stocks. You love the FANG stocks (Facebook, Amazon, Netflix, and Google). You have an iPhone so you love Apple. You have been using a Windows computer forever so you love Microsoft. You always wanted to drive an electric vehicle so you love Tesla. You see these companies as great long term plays because you think we are just going to create more and more machines to replace human jobs. Not only will this allow these companies to make more money because of lower costs, but these companies will be right there creating these technologies.
And what’s more, you think Biotech companies could go crazy high too like Celgene or Amgen or Biogen, so you need to buy those too. The problem is that you might not want to buy all of those individually and would love a way to buy them all at once…what do you do?
Alibaba is an enormous Chinese e-commerce company that we are able to trade on the New York Stock Exchange. The way you can think about Alibaba is the following; it is a combination of Amazon and Walmart. It recently passed Walmart as the world’s largest retailer and now operations in over 190 countries.
Fortunately for us, Alibaba became a publically traded company in 2014 and is one of the most actively traded stocks in the world. The stock trades a lot of volume but since we are options traders we need to know if the BABA options are as good as the stock. Let’s give it a whirl and see if BABA options are good enough for us.
There is no getting around this folks. SPY stock and SPY options combined make the S&P 500 Index ETF that greatest investing and trading vehicle in the world. There is no close second.
The most important concept in investing and trading is that we only invest and trade in assets with high liquidity.
The liquidity we are talking about is not water but the level of participation. The more participation there is, the more people compete for our orders. And the more people compete for our orders, the fairer the markets are and the better prices we receive at a faster rate. I dare you to find something that can look me in the eye and say that it not a giant edge.
The S&P 500 Index ETF is the greatest trading assets in the world, and as options traders, we need to almost always have positions on in SPY options. We will walk through everything that makes them so amazing right here.
You know this thumb. You go on Facebook every single day. And if you tell me you don’t you are lying. Please don’t lie to me. It isn’t very nice.
While the world spends most of its time on Facebook at work, fortunate traders and investors are spending that time trading Facebook stock and FB options.
If we had to choose between trading stock or trading options, we would choose options every day of the week. They provide us the ability to define our probabilities and also allow us to use far less capital than compared to holding stock. For the rest of this article, we are going to talk to you about FB options.
Look at this baby. It looks like it can keep on going down so much that is it going to go under zero.
Here we are looking at VXX, the Barclays Bank PLC iPath S&P 500 VIX Short Term, the volatility ETF that can’t seem to keep its wings up. The only reason it is still tradable is because of the VXX reverse split that Barclays has to do every so often.
We recently wrote a post on the UVXY reverse split, and we will continue our coverage of reverse splits here today by talking about the VXX reverse split.
Many people associate the VIX with the word “fear” as Wall Street spends all day every day calling it the Fear Index. However, very few people do know the true purpose of the VIX and potentially how it can give us a reasonable gauge of how far the INDEXSP:.INX (S&P 500) might go.
Every time the market goes down, the talking heads on CNBC will rave about what the volatility index is doing on that day. They say that INDEXSP:.INX (S&P 500) trader are buying protection, fear is rising in the market, risk on, etc. While this is a great selling point for Wall Street and financial institutions, the VIX is not the Fear Index by any means and it is not more than a gauge of how far the INDEXSP:.INX (S&P 500) is expected to move over the next calendar year.
As with everything here at Stony Brook Securities, we do not buy into the status quo. We prefer to mute out all of the noise and figure out what is going on under the hood. Every year, analysts from the largest Wall Street institutions come out with their price targets for how far the index’s could go over the next year. While we think this is great and we wish all of those analysts the best of luck, we do not think spending all of those countless hours digging through thousands of balance sheets is worth it. Why might you ask? Because at all times, the collective market (the million of buyers and sellers) has an agreed on expected move for the INDEXSP:.INX (S&P 500) that comes in the form of a tradable assets. We will talk about what that asset is and exactly how you can find out the expected move for any timeframe for the S&P 500 in about 7 seconds.
We have spoken in the past about risky portfolios…
But never about specific investments. Are they one in the same or are they a completely different animal?
As investors, we would like to avoid volatile returns at all times and sometimes this means staying away from volatile investments.
This is an open question to all and feel free to comment down below, but here we go.
If an investment is considered volatile it means…
This is the best we could do to try to get an image of a split. It was either these scissors or it was a photo of someone splitting their pants. Because we try to keep is professional, we chose the former of the two.
We have been getting a lot of questions lately about the continuous UVXY reverse split that seems to happen quite a bit. Fortunately (or unfortunately), there are specific reasons why these keep happening over and over again.
For the rest of this article, we will explain why there are UVXY reverse split’s and why they are likely to continue to happen.