Short interest data is information related to the total number of shares that are sold short for a particular stock by investors who have yet to close or cover the position. This data can be expressed as a percentage, which is the total number of shares shorted divided by the total number ...
Equity derivatives can also be used to speculate on future price movements. For example, a trader can buy equity options instead of actual stock to try to generate profits from the underlying asset's price movements. There are two benefits to such a strategy. First, traders can lower initial ...
Although there is still significant risk, selling covered options is a less risky strategy than selling uncovered (also known as naked) positions because covered strategies are usually offsetting. In our covered call example, if the stock price rises, the XYZ shares that the investor owns will in...
Both short sales and foreclosures are difficult times for many homeowners since they occur when they're in financial distress. However, they have very different effects on a homeowner's ability to recover financially. Both will eventually fall off your credit if you satisfy anyoutstanding debtthat...
Your portfolio is made up of shares in companies that rely heavily on imported raw materials, energy, or commodities to make money. Much of the manufacturing sector depends on imported raw materials to create finished goods. When the U.S. dollar declines in value, the purchasing power of the...
Shares outstanding are useful for calculating many widely used measures of a company, like its market capitalization andearnings per share (EPS). The number of shares outstanding can impact how liquid a stock is, which may affect the price volatility. Analysts watch for dramatic changes in shares...
Valuation of private shares is often a common occurrence to settle shareholder disputes, when shareholders are seeking to exit the business, for an inheritance, and many other reasons. There are numerous businesses that specialize in equity valuations for private businesses and are frequently used for...
basis. Each purchase of additional shares of reinvested dividends at different prices adjusts the overall cost basis. Properly maintaining these records is crucial because a lower reported cost basis could lead to overpaying taxes on gains. Many brokerage firms now track your cost basis for this ...
Let's use a simplified example: suppose you sell short 1,000 shares in Company A. You haven't borrowed the shares. Still, you're betting on a rapid downturn in the stock price for Company A, which makes this not a problem—the price going down should mean many sellers are looking to...
that loan to purchase additional shares. When taking ashortposition, the shares themselves are borrowed from the broker and aresold short. The short seller then hopes to repurchase those shares in the future at a lower price, returning those shares to the broker and profiting from the ...