Categorizing Stocks According to Types

Choosing a stock while making an investment decision depends upon your financial goals. Corporations issue different types of stocks, the basic two types being common stock and preferred stock. Another type of classification, commonly used is to classify stocks as growth, value, or blue chip stocks, amongst others. It is important to understand the various terms clearly so that you can make a wise investment decision. Common Stock This is the basic stock issued by a corporation and represents the... Read more »

All About Insider Trading

Insider trading is the trading of a company’s shares by people who work for the company, such as senior level executives, directors and those who own more than 10% of the total shares. Insider trading is illegal since the trading is based on some privileged information that the insider has access to, but is not known to the public at large. The act of misappropriating some privileged information, or violating duty and trading or relaying information illegally is illegal in the United States.... Read more »

Weighing The High Risks And High Returns Of Junk Bonds

Junk bonds are similar to regular bonds. They are IOUs from an organization or corporation, which specify the principal amount it shall pay back. The date on which this payment of principal will be made is known as the date of maturity. The interest amount to be paid is known as the coupon. The interest that junk bonds generate is higher than that of the usual ones. These high interest payments compensate the investors for the extraordinary risks they take. These are high yield due to the high risk. The... Read more »

How To Conduct A Shareholder Meeting

A Shareholder Meeting is presided over by the Chairman. The Chairman has the responsibility of coordinating the meeting unless the Chairman assigns this responsibility to someone else. Below is a list of formalities that must be followed at a shareholder meeting. 1. Participants’ List: Preparing a comprehensive list of the participants of the meeting is the first step in conducting a shareholder meeting. All the participants should be carefully noted to avoid any discrepancy. 2. Proper Notice:... Read more »

Understanding Mergers, Acquisitions, and Spinoffs

Mergers, acquisitions and spin-offs are part of the corporate restructuring strategy in which big and small companies indulge in today’s corporate world. These are also called consolidation activities. Companies pursue consolidation activities to strengthen their strategic and competitive positioning. Merger happens when a new company is formed by the combination of two separate legal entities. The stocks of both of the companies are surrendered and a new company issues fresh shares in the... Read more »

Weighing The Risks And Rewards Of Penny Stocks

Penny stocks do not require you to have a big cash outlay to get started. All you need to spend is just a fraction of penny or maybe as much as $5 per stock. These stocks carry tremendous reward potential, but at the same time, they carry more risks than other regular investments. For example, the penny stock may go from 20 cents to as high as 20 dollars or it may just prove worthless with literally no return. How to Invest in Penny Stocks Making investments in penny stocks is quite easy. Contact... Read more »

Understanding Convertible And Reverse Convertible Bonds

The issuer or buyer issues bonds to the creditor. If the market value of the collateral or amount of the bond increases, then the value of the convertible bond also goes up. If the value of the material on which the bond has been issued decreases, the bond will decrease in price. Convertible and reverse convertible bonds are similar with the exception of the role played by the underlying company. Convertible Bonds Convertible bonds are, as the name suggests, convertible. You can change them into... Read more »

Understanding Institutional Investment In Stocks

Large companies and institutions employ teams of analysts to help invest in other companies. If they buy a particular stock, the market often expects the stock to have significant upside potential. And if they are selling the same stock, it could mean that the company, whose shares are being sold, is witnessing some difficulties. The investment trends of the Institutional Investors can be traced online. The following information is online. 1. Institutional ownership of shares in a particular company... Read more »

What To Know Before Doing After Hours Trading

After Hours Trading or AHT is the trading of securities on big exchanges after the normal trading time is over. After hours trading, which used to be the privilege of institutional investors is now available for every one. The advent of electronic communication networks or ECN has brought radical changes in the method of stock trading. ECN is a medium that has made buying and selling stocks as easy as the click of the mouse. Moreover, big institutional investors have the advantage of trading without... Read more »

Navigating The Stock Trading Systems

Stock trading is the process of buying and selling shares of stock. Almost everybody has heard about the stock trading system, but not everybody knows how this trading system works. Most people wonder how it is possible to trade billions of shares everyday. It does not matter if you do not know the technical side of the system. However, if you are planning to engage in stock trading, you must have a basic understanding of how the stock trading system works. Stock exchanges use two basic methods to... Read more »