The P/E ratio, or the price to earnings ratio, is one of the simplest and most popular metrics for evaluating stocks. The P/E ratio compares the stock’s current market price with its most recently reported earnings per share. The price of the stock is then evaluated as a multiple of the earnings that each share […]
The PEG ratio, or the price/earnings to growth ratio, is a stock’s price to earnings ratio divided by its earnings growth rate over a defined period of time. The PEG ratio is a metric used by traders to complement or supplement the classic P/E ratio by incorporating a measure of a company’s expected future earnings. […]
The alternative minimum tax, or AMT, is a tax regulation intended to limit the ability of wealthier taxpayers to avoid paying a proportionate share of taxes as a result of their greater opportunity to use tax breaks and exemptions to reduce their tax burden. Calculating Alternative Minimum Tax Calculating the alternative minimum tax is a […]
Amortization is an accounting term that describes the method used for allocating the capital costs of intangible assets over time. It is also often used as a method for creating fixed payments on a loan or bond with a rate of interest so that the payments stay the same for the entire duration of the […]
Bitcoin Cash is a cryptocurrency that split from Bitcoin Classic in a ‘fork’ event, where holders of the original Bitcoin were allowed to exchange their units for new Bitcoin Cash units. The split from which Bitcoin Cash emerged was driven by a disagreement among Bitcoin stakeholders about altering the code of Bitcoin to allow it […]
An ad valorem tax is any tax that is based on the assessed value of an asset or set of assets. Ad valorem taxes are a method of periodically taxing assets and properties, as opposed to a transactional tax that only taxes a good or service once at the time of exchange. Ad valorem taxes […]
A basket trade is any trade that is performed for a set of 15 or more different shares or other securities, usually as a set proportion of those shares. Basket trades are most commonly used by institutional investors to maintain a proportionate portfolio of different shares or to purposefully alter the proportion of the shares […]
Contrarian traders base their trading strategies on the underlying principle that the market tends to overreact at both extreme highs and lows. Contrarian traders see these extremes as opportunities to profit from sharp reversals that can occur when the market corrects from a recent overreaction. However, contrarian trading strategies are more complex than simply betting […]
The wash sale rule is an IRS taxation regulation governing the use of investment losses in capital gains tax. The wash sale rule prohibits the investor from claiming any sale of a security as a loss if a similar security is purchased within 30 days of the sale. The wash sale rule also applies to […]
What is a Bull Trap? A bull trap is a trading term that describes a false signal to bulls that the price is going higher, but really is just a fake move before going lower. The increase has to be just enough to lure the bulls in, only for the stock to sink again, […]
