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Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are proceeds from writing covered calls taxed? ### Answer: Successful covered calls are short term capital gains. The amount of time you have owned the underlying security is irrelevant. The gain ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are people able to spend more than what they make, without going into debt? ### Answer: That's just his base salary for last year. Keep reading in the article: He also received $1.6 million worth...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are people able to spend more than what they make, without going into debt? ### Answer: Rich people use debt for various reasons. The question should not assume that billionaires don't use debt. T...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are people able to spend more than what they make, without going into debt? ### Answer: I don't know about Jeff Bezos in particular but, in general, and with a a few other notorious exceptions lik...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are people able to spend more than what they make, without going into debt? ### Answer: Bezos made very little "money." But he is very wealthy because of stock grants and options, from his previou...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are people able to spend more than what they make, without going into debt? ### Answer: If you make $10 in salary, $5 in interest on savings, and $10 in dividends, your income is $25, not $10. If ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What US taxes are due for US stock bought via ESPP when I was in USA and sold after I returned to India? ### Answer: From an Indian Tax point of view, you can bring back all the assets acquired during...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When the market price for a stock is below a tender offer's price, is it free money (riskless) to buy shares & tender them? ### Answer: It is not a "riskless" transaction, as you put it. Whenever you ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When the market price for a stock is below a tender offer's price, is it free money (riskless) to buy shares & tender them? ### Answer: That price is the post-tender price, which already reflects arbi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Since many brokers disallow investors from shorting sub-$5 stocks, why don't all companies split their stock until it is sub-$5 ### Answer: Vitalik has mentioned this in a comment but I think it ought...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Since many brokers disallow investors from shorting sub-$5 stocks, why don't all companies split their stock until it is sub-$5 ### Answer: I do believe it comes down to listing requirements. That is...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Since many brokers disallow investors from shorting sub-$5 stocks, why don't all companies split their stock until it is sub-$5 ### Answer: A stock split can force short sellers of penny stocks to cov...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If a company I bought stock in was de-listed but is now listed again under a new symbol, what happened to my shares? ### Answer: If the company went bankrupt, the issued public shares that were outsta...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Employer 401K thru Fidelity - Investment options ### Answer: The best predictor of mutual fund performance is low expense ratio, as reported by Morningstar despite the fact that it produces the star r...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Employer 401K thru Fidelity - Investment options ### Answer: The target date investment will automatically reduce equity exposure and increase bond exposure as it approaches retirement date. If you a...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: After Market Price change, how can I get it at that price? ### Answer: If the price used to be 2.50 but by the time you get in an order it's 2.80, you're going to have to pay 2.80. You can't say, "I w...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: After Market Price change, how can I get it at that price? ### Answer: Buying stocks is like an auction. Put in the price you want to pay and see if someone is willing to sell at that price. Thing to...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: After Market Price change, how can I get it at that price? ### Answer: You can make a purchase at the after market price by sending an order that gets executed in after market. Often times these are c...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: After Market Price change, how can I get it at that price? ### Answer: The price of the last trade... Is the price of the last trade. It indicates what one particular buyer and seller agreed upon. The...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: IS it the wrong time to get into the equity market immediately after large gains? ### Answer: Its best to dollar cost average adding say 5%-10% a quarter into the fund. That's what Clark Howard would ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: IS it the wrong time to get into the equity market immediately after large gains? ### Answer: If your gut told you to buy during the depths of '09, your gut might be well-calibrated. The problem is st...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: IS it the wrong time to get into the equity market immediately after large gains? ### Answer: Past results are not a predictor of future results. There is no explicit upper bound on a market, and even...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: ADR listed in PINK ### Answer: Pink Sheets is not a stock exchange per se, and securities traded through it are not as "safe" as the ones on a stock exchange regulated by SEC. Many companies are trade...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If an index goes up because an underlying company issues more shares, what happens to the ETF ### Answer: If a stock that makes up a big part of the Dow Jones Industrial Average decided to issue a h...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the best and most optimal way to use margin ### Answer: This essentially depends on how you prefer to measure your performance. I will just give a few simple examples to start. Let me know if ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Paying Tax on Stocks Trading ### Answer: The answer to your question doesn't depend on who you trade with but what country you live in. If you live outside of the US, you will have to pay tax on divid...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: 401K or Indian CD ### Answer: As mentioned in the comments, the problem stems with converting your U.S. Dollars to Indian Rupees so as to be able to purchase an Indian fixed deposit. At the time of wr...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does lender care what I use the money for? ### Answer: When you borrow from a bank, there are secured loans, as with a mortgage, or unsecured lines of credit, usually a more reasonable amount of money...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I fund retirement with a static asset allocation or an age based glide path? ### Answer: I think not. I think a discussion of optimum mix is pretty independent of age. While a 20 year old may h...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I fund retirement with a static asset allocation or an age based glide path? ### Answer: The thing about the glide path is that the closer you're to the retirement age, the less risk you should...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I fund retirement with a static asset allocation or an age based glide path? ### Answer: So I did some queries on Google Scholar, and the term of art academics seem to use is target date fund. ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can I get a dumbed down explanation of risk measures used for evaluating stocks? ### Answer: Standard deviation from Wikipedia : In statistics and probability theory, the standard deviation (represe...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is market order's relation to bid ask spread? ### Answer: Because in the case for 100/101, if you wanted to placed a limit buy order at top of the bid list you would place it at 101 and get fille...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does modifying an order cancel the old one and submit a new one ### Answer: Limit books are managed by exchanges. If an order is not immediately filled, it is sent to the book. From there, orders are...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do credit union loans and dividends vs interest work? ### Answer: A credit Union makes loans exactly the same ways a bank does. A portion of the money deposited in checking, savings, money market...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: In 2015, why has the price of natural gas been plummeting? ### Answer: You do not hold leveraged ETF for longer than a few days. You have UGAZ and DGAZ, both 3x leveraged, one longs one shorts. What...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: In 2015, why has the price of natural gas been plummeting? ### Answer: Don't try to catch a falling knife. The fact that the prices were falling for this long means that the professional traders in th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Main source of the shares/stocks data on the web ### Answer: The main source is a direct feed from the stock market itself. The faster the feed, the more expensive. 15-minute delay is essentially free...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Main source of the shares/stocks data on the web ### Answer: To expand on keshlam's answer: A direct feed does not involve a website of any kind. Each exchange publishes its order/trade feed(s) onto ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Pros/cons of borrowing money using a mortgage loan and investing it in a low-fee index fund? ### Answer: Risk is the problem, as others have pointed out. Your fixed mortgage interest rate is for a set...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Pros/cons of borrowing money using a mortgage loan and investing it in a low-fee index fund? ### Answer: Well for a start funds don't pay interest. If you pick an income-paying fund (as opposed to on...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Pros/cons of borrowing money using a mortgage loan and investing it in a low-fee index fund? ### Answer: Risk. That's it. No guarantees on the fund performance, while the mortgage has a guaranteed r...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Pros/cons of borrowing money using a mortgage loan and investing it in a low-fee index fund? ### Answer: Something very similar to this was extremely popular in the UK in the late 1980s. The practice...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Pros/cons of borrowing money using a mortgage loan and investing it in a low-fee index fund? ### Answer: Essentially, what you're describing is a leveraged investment. As others noted, the question i...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can Form 1040a, Line 10 be left blank if the broker's 1099-Div shows 0? ### Answer: Capital gain distribution is not capital gain on sale of stock. If you have stock sales (Schedule D) you should be f...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Stocks are traded on secondary markets? ### Answer: NYSE and Nasdaq are secondary markets where stocks are bought or sold. The process of creating new stocks via IPO or private placements etc are call...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct way to report a tender offer fee on my taxes? ### Answer: It is perfectly legitimate to adjust your 1099-B income by broker's fees. Publication 17 (p 116) specifically instructs t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the correct way to report a tender offer fee on my taxes? ### Answer: Using a different cost basis than your broker's reporting is NOT a problem. You need to keep your own records to account f...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can I contribute to an IRA from investment income? ### Answer: Your contributions must come from "compensation". Quoting IRS Publication 590 on IRAs, "Generally, compensation is what you earn from wor...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can I contribute to an IRA from investment income? ### Answer: Traditional IRA contributions can be made if you have compensation and the amount of the contribution is limited to the smaller of your ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If I put dividend-paying stocks in my IRA, where does the dividend go when paid? ### Answer: The dividend goes into the IRA (either reinvested automatically or remains as cash until you invest it, per...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Indian resident owning dividend-paying shares in company based in France: Can I save on withholding tax? ### Answer: France taxes capital / dividend gains accrued in France. Hence you will not be able...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there any reason to buy shares before/after a split? ### Answer: Assuming you plan to buy a whole number of shares and have a maximum dollar value you intend to invest, it may be better to wait for...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there any reason to buy shares before/after a split? ### Answer: There has been a lot of research on the effects of stock splits. Some studies have concluded that: However note that (i) these are a...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I own ASPIRO shares (Jay Z's new company). Now that it is going private, what about my shares? ### Answer: From the press release Based on Aspiro's closing share price of SEK 0.66 as of 29 January 2...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do dividends of the underlying security in a security futures contract affect the security futures price? ### Answer: The owner of a long futures contract does not receive dividends, hence this is...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do dividends of the underlying security in a security futures contract affect the security futures price? ### Answer: The price of a future with an underlying that pays dividends is As you can se...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I file 83(b) election, but did't include a copy of it in that year’s tax return ### Answer: I've consulted with 5-6 accountants and people who've had the issue before. The advice I received boils down...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I file 83(b) election, but did't include a copy of it in that year’s tax return ### Answer: I've talked to several very experienced accountants that deal with startup shares, stock 83(b)'s, etc. weekl...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I file 83(b) election, but did't include a copy of it in that year’s tax return ### Answer: It matters because that is the requirement for the 83(b) selection to be valid. Since the context is 83(b) e...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I file 83(b) election, but did't include a copy of it in that year’s tax return ### Answer: This may be relevant: it suggests that IRS is lenient with the attachment of the form with 1040. To paraphra...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offsetting the tax on vested RSUs with short term capital loss ### Answer: No. The gain on RSU is not a capital gain, it is considered wages and treated as part of your salary, for tax purposes. You c...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If the put is more expensive than the call, what does it mean ### Answer: There are many reasons. Here are just some possibilities: The stock has a lot of negative sentiment and puts are being "bid up...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If the put is more expensive than the call, what does it mean ### Answer: What it means is that the stock has already moved down. Options and other derivatives follow the price of the underlying they ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If the put is more expensive than the call, what does it mean ### Answer: It is a fool's errand to attribute abnormal option volume or volatility to any meaningful move in the stock. One side of the c...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How does a portfolio of long stocks and short futures generate profits ### Answer: I know some derivative markets work like this, so maybe similar with futures. A futures contract commits two parties...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why sometimes payable date is BEFORE the ex-dividend date? ### Answer: Do you realise that the examples you have given are for stock splits not for dividends, that is why the date payable is before th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Medium-term money investment in Germany ### Answer: Due to the zero percent interest rate on the Euro right now you won't find any investment giving you 5% which isn't equivalent to gambling. One of ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Stocks and Bonds in Roth IRA vs non-tax-advantaged ### Answer: You should definitely favor holding bonds in tax-advantaged accounts, because bonds are not tax-efficient. The reason is that more of the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Legal documents required for managing an investment portfolio among friends? ### Answer: Sounds like you are starting an investment club. What you need is an investment club partnership agreement. Hav...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Legal documents required for managing an investment portfolio among friends? ### Answer: You have to register with the SEC as an Investment Company. The SEC has a "Investment Company Regulation and Re...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Professional investment planning for small net-worth individual in bearish market ### Answer: You're going to have a hard time finding a legit investment planner that is willing to do things like take...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Professional investment planning for small net-worth individual in bearish market ### Answer: There is no magic bullet here. If you want professional management, because you think they know more abo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Clarify on some Stocks Terminology ### Answer: Volume is measured in the number of shares traded in a given day, week, month, etc. This means that it's not necessarily a directly-comparable measure be...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Clarify on some Stocks Terminology ### Answer: Yep, you have it pretty much right. The volume is the number of shares traded that day. The ticker is giving you the number of shares bought at that pr...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Put on a put option ### Answer: I doubt that this exists, but it could theoretically. After all, a share is kind of an option to a company's future success, and so a call is already a second level on ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Put on a put option ### Answer: If you look at it from the hedging perspective, if you're unsure you're going to need to hedge but want to lock in an option premium price if you do need to do so, I co...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to read DOJI chart pattern correctly? ### Answer: Candle stick patterns are generally an indication of possible short term changes in price direction (if a reversal pattern). A doji is such a reve...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If a trendline or pattern breaks due to some bad news but it returns back what to do? ### Answer: There is a technique called the Elliott wave which explains these 'shocks'. The reversal directions yo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What does a reorganization fee that a company charges get applied to? ### Answer: Its a broker fee, not something charged by the reorganizing company. E*Trade charge $20, TD Ameritrade charge $38. As ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Allocating IRA money, clarification needed ### Answer: There was a time that a rule of thumb stated your stock allocation should be 100-your age. That rule suggests that you are at 65%stock/35% bond/c...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Allocating IRA money, clarification needed ### Answer: You're saying that you're thinking of keeping 35% in cash? If you expect the market to plummet in the next few months and then head up again, thi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Allocating IRA money, clarification needed ### Answer: You'll likely see several more scary market events before your autumn years. Ahhh, everyone has an opinion on this so here is mine :) If you are ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What should I look for when looking for stocks that are 'on-sale'? ### Answer: It might seem like the PE ratio is very useful, but it's actually pretty useless as a measure used to make buy or sell de...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What should I look for when looking for stocks that are 'on-sale'? ### Answer: Don't invest. Keep cash. And wait till you see a crash in the price of some of your favorite blue chip stocks. But wait t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I invest in US Stocks from outside the US with a credit card instead of a bank account? ### Answer: You'll have to take cash from your Credit Card account and use that to trade. I doubt any br...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to tell if an option is expensive ### Answer: An option, by definition, is a guess about the future value of the stock. If you guess too aggressively, you lose the purchase price of the option; if...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to tell if an option is expensive ### Answer: One way is to compare the implied volatility with the realised volatility over a period similar to the time left to expiry. However there are plenty o...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Will a stop order get triggered if the floor is hit and trading is halted? ### Answer: During a circuit breaker, no trading occurs. These policies have been implemented to maintain exchange liquidity ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Will a stop order get triggered if the floor is hit and trading is halted? ### Answer: quantycuenta is right, if a halt is in place, then no trading will occur, simple as that. But in the practice of ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to record a written put option in double-entry accounting? ### Answer: Because you've sold something you've received cash (or at least an entry on your brokerage statement to say you've got cash) ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Risk and reward of a synthetic option position ### Answer: You sold a call, and have a risk if the stock rises. You bought a put and gain when the stock drops. You, sir, have a synthetic short positi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Risk and reward of a synthetic option position ### Answer: But if underlying goes to 103 at expiration, both the call and the put expire worthless If the stock closes at 103 on expiration, the 105 p...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How do ETF fees get applied? ### Answer: The ETF price quoted on the stock exchange is in principle not referenced to NAV. The fund administrator will calculate and publish the NAV net of all fees, bu...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Profiting off $0.01 changes in real life? ### Answer: You can certainly try to do this, but it's risky and very expensive. Consider a simplified example. You buy 1000 shares of ABC at $1.00 each, with...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? ### Answer: The problem with daily-rebalanced "inverse" or "leveraged" ETFs is that since they rebalance every day, you can...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? ### Answer: Fund rebalancing typically refers to changing the investment mix to stay within the guidelines of the mutual fu...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? ### Answer: If you want to make a profit from long term trading (whatever "long term" means for you), the best strategy is ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? ### Answer: In addition to the excellent answers here I might suggest a reason for investing in leveraged funds and the ori...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: A stop order won't be automatically fired in after-hours trading? ### Answer: Stop orders and stop limit orders typically do not execute during extended hours after the general market session has clos...