What is Price Discovery Price discovery is the process where buyers and sellers determine where a transaction can take place based on supply and demand. This evaluation process uses the economic concept of supply and demand to find a price where a buyer and a seller agree to trade. The supply and demand for […]
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How to Trade IPO Stocks: A Primer For Beginners
Hot IPOs are becoming rarer in the late stages of this post-GFC bull market cycle. The primary reason for that is that private market financing allows early-stage firms to remain private longer. This trend is turning around, starting with the IPO of cloud data platform Snowflake (SNOW) in September, with several other hot upcoming […]
Opening Your First Trading Account? Here’s What You Need to Know
Opening your first trading account can seem daunting given the sheer number of options out there. Fortunately, most brokerage firms follow a straightforward process similar to the one laid out below. Getting your account open is just a matter of choosing a broker, providing some personal information, and funding your account. Once the formalities […]
Best Hedges for a Devaluing Dollar
Many macro investors are betting on significant inflation in the US Dollar for the foreseeable future so we put together a list of some of the best hedges for a devaluing dollar. At the risk of oversimplifying the prevailing opinions of this group, I think a basic simplification of the prevailing bearish dollar view […]
Linear vs Logarithmic Chart Scaling Explained
The style of chart scaling you use on your price charts is one of those seemingly unimportant details that can dramatically affect how you perceive market action. Linear vs Logarithmic scaling are the two primary chart scaling styles, and both are available in almost every charting platform. The Difference Between Linear and Logarithmic Charts […]
Long Put Option Strategy for Beginners
While day trading stocks can potentially lead to big profits, options are an ideal way to control a large chunk of shares without having to put up the funds necessary to own stocks of bigger companies and can actually help protect or hedge your stock investments. This article will prepare you to effectively use […]
Mean Reversion Trading: Is It a Profitable Strategy?
Almost every trading strategy aims to exploit one of two prevailing phenomena in financial markets: mean reversion or momentum. In a nutshell, mean reversion strategies assume big moves will partly reverse, while momentum strategies assume big moves will continue in the same direction. This article will explain the phenomenon of mean reversion in stock […]
The September Effect: What it is and Why it Happens
If you follow the markets long enough, you’ll see that stock prognosticators and weather forecasters have similar seasonal predictions. When the weather heats up in spring and our minds turn to the upcoming summer, the catchphrase for investors has been “sell in May and go away”. Equity returns tend to outperform between November and […]
Exercising Options: Everything You Need to Know
You may have heard that trading stock options can be worth a lot of money when used correctly, and it is certainly true. But do you really know how stock options work? Or what a stock option is? Do you know what it mean to exercise options? Do you know the difference between exercising calls […]
How To Trade a Market Sell-off (And When Not To)
How To Categorize a Sell off When speaking of a market sell off, it’s first crucial to categorize what we mean by a sell-off. Your definition should vary based on your holding period and time frame, but we need to be consistent. Here are a few ideas on how to categorize the severity of market […]