Category: Stock market

After-hours Trading: How do I trade stocks after the close of trading

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How does after-hours trading work?
After hours trading refers to trading After the market closes for the day, usually between 4 p.m. 8 p.m. Est, but brokers may be different.
Similarly, there is a trading session before the market opens, called the premarket session. Both days are known as extended trading hours.
Trading stocks after regular business hours can bring convenience and other potential benefits. However, it has its own unique rules, risks, and limitations, which we list below.
What is after-hours trading?

Stock trading on major U.S. stock exchanges is normally open from 9:30 a.m. to 4 p.m. Eastern Time, but investors can still buy and sell stocks and other securities during after-hours trading.
Technically, the period starts at 4 p.m. Et after the major stock exchanges close and can last until 8 p.m. Et.
That’s not a universal standard, however, as brokerages such as Wells Fargo limit trading to between 4:05 p.m. and 5 p.m. Et, while others such as TD Ameritrade open at 4:15 p.m. Et.
Other brokers, such as E*Trade, charge extra for after-hours trading. Therefore, it is imperative to take a look at your broker’s policies before trading after the close.
After-hours orders can only be placed through a computerized trading system called an Electronic Communication network (ECN).
These systems match potential sellers and buyers, and your buy cannot be completed until the sell order is placed at the price you want.
The benefits of after-market trading
The main benefit of buying and selling stocks in after-hours trading is that investors can react to news events that happen after 4 p.m. Eastern time, including the monthly jobs report or earnings report.
Many public companies report earnings after the regular trading session ends. That means traders don’t have to wait until the market opens the next day to trade.
Trading after the close allows them to trade immediately and avoid missing meaningful price movements.
The trading strategy also makes it easier for some investors whose schedules prevent them from buying and selling stocks during regular trading hours.

 

The best time of day to buy stocks

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The best time of day to buy stocks – An overview of the trading day
In terms of trading, many people want to know: When is the best time of day to buy stocks?
Certain times of the day offer the greatest trading opportunities. Trading at such times helps traders take advantage of normal opportunities. First, it’s crucial to understand the two most important trading periods:

Morning meeting
The meeting in the afternoon
Morning meeting
Typically, trading starts at 9:30 a.m. Est, with a significant portion of traders trading until 10:30 a.m. (meaning the first hour of the trading day).
Hint: Stock prices can be quite volatile in the morning. This is a good time to look for trade opportunities, but make sure as it’s more volatile and more on the defensive side!
Why the first hour?
When considering the first hour of trading, certain factors can help answer this question:
More trading means you have more liquidity to move in and out of positions
More volatility means more opportunities
More follow-up breakthroughs
The meeting in the afternoon
Market volatility begins to subside around 11 or 11:30 a.m. During this period, the volume also tends to decrease. So when you trade at this point, you’re not maximizing your returns, and prices tend to be very volatile.

 

How to Buy Canadian stocks in 2021

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Canada’s stock market also offers diversity that the U.S. lacks, and its natural resources sector makes it vulnerable to the frequent swings in commodity prices. Here are the benefits of investing in Canada:
Low budget deficit — In 2018, Canada had a budget surplus of 0.8% in the first half of the year. Over the same period, the US deficit remained at about 4 per cent of gross domestic product. Moreover, it is better than many Asian and European countries. This means more manageable fiscal stability and long-term prospects.

Stable inflation – Unlike many emerging markets, Canada’s inflation rate is fairly stable. This is due to a more conservative bailout policy and partly tighter monetary policy, with a target rate of 2%.
Strong Natural resources – Canada has a huge natural resource base, from crude oil to precious metals. This has helped China avoid the problems faced by other net energy importers.
How to buy Canadian stocks
Search for a US listing
The easiest way for investors to buy Canadian stocks is through a listing on the New York Stock Exchange (NYSE). Many Canadian companies, particularly those with offices overseas or dealing in foreign exchange, have received approval to trade on the NYSE, including the five largest banks operating outside Canada.
The benefits of trading on the NYSE include:
Traders need not worry about switching their currencies
They can buy shares through any domestic brokerage
They had access to SECURITIES and Exchange Commission filings, which provided an opportunity to assess the company’s health
Persons wishing to invest directly in the Canadian market (rather than a specific industry or company) can do so through the following channels:
Bank of Montreal (BMO)
Royal Bank of Canada (RY)
Canadian Imperial Bank of Commerce (CM)

Best brokers for penny Stocks of the Day [2021]

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In the 2013 film The Wolf of Wall Street, rookie stockbroker Jordan Belfort is forced to look for work at a pot brokerage after the Black Monday stock market crash.
Mr Belfort promoted penny stocks that were not listed on major exchanges, known as “pink orders”, and earned huge commissions thanks to his high-pressure selling tactics, which occasionally included pushing up and selling.
What are penny stocks?
Penny stocks are stocks that trade over the counter for less than $1. Penny stocks, also known as pink stocks, are essentially small, unstable companies that have difficulty accessing capital markets.

Liquidity is hampered, so these stocks are often plagued by volatility. Not all volatility is achieved through legal means.
Pump and dump solution
During ups and downs, “market gurus” buy lots of penny stocks and then promote them to their followers. The volume of trading that followed led to a huge rise in the share price, and that was when the maestro sold. Unsuspecting followers buy high and often lose most of their investment when bargains fall back to earth.
What should intraday penny stock brokers pay attention to
Stock availability — Not every broker supports over-the-counter stock trading. Many of the newer free trading apps only support stocks on major exchanges, which must be priced above $1. Most of the big traditional online brokerages have over-the-counter stocks and pink single shares.
Speed of execution – Penny stocks are very volatile. With prices low and liquidity scarce, a move of just a few cents is enough to make your trade top notch. Brokers with direct access to the market not only provide fast execution but also more manageable spreads. Of course, the cost is something you have to weigh.
Trading fees – When stocks cost pennies, you need to buy a lot to make real money. Because of this, the cheapest brokers of penny stocks will charge a flat transaction fee, rather than a per-share transaction fee. For example, suppose one broker charges $5 per penny for a stock transaction, while others charge 0.004 cents per share. If you trade 5,000 shares with the first broker, you only pay $5. But if you trade 5,000 shares with a second broker, you pay a $20 commission.

How do interest rates affect the stock market

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Interest rates play an important role in the functioning of markets and economies. Learn how interest rates affect the stock market and your portfolio.
introduce
On March 15, the Federal Reserve cut its key interest rate to 0-0.25 percent in response to economic difficulties caused by the coronavirus pandemic.
That headline was quickly replaced when the Fed (and The Treasury) started taking bolder steps, but interest rates are usually the first tool to open the box when the Fed is trying to speed up or slow the economy.
Interest rates affect all the financial assets we buy, whether it’s stocks in brokerage accounts, bonds in individual retirement accounts, or promising real estate.

How does the interest rate work?
You might be paying interest on something right now. Maybe it’s a student loan, a mortgage, or a credit card (hopefully not a credit card), but someone has lent you money and expects you to pay it back with interest.
All credit products have interest rates because no one borrows money out of the goodness of their hearts. Interest rates determine how much it costs to borrow money – the higher the rate, the more you will have to pay back the lender over the life of the debt.
Why did the Fed change interest rates?
The Federal Reserve Bank is a quasi-governmental institution. Yes, they have a lot of control over monetary policy, and their board members are appointed by elected officials.
How do interest rates affect stocks
Whether interest rates rise or fall, the stock market will be affected. In a falling interest rate environment, newly issued debt will pay off less than old debt.
Since investors can no longer get the same yields from bond products after rate cuts, they often turn their attention to equities.
When interest rates fall, it’s (usually) good news for stocks. With money cheaper, investors are more willing to take equity risk, as returns in the bond market are hampered by low interest rates.
How do interest rates affect bonds
The inverse relationship between bonds and interest rates has been well documented. When interest rates rise, bond prices fall. When interest rates fall, bond prices rise.

What’s the difference between a large cap and a small cap?

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In this article, we’ll help clarify market capitalization, the difference between large-cap and small-cap stocks, and things to consider when trading both classes.
What is market value?
Market value is what investors value a company at a given point in time. This measure refers to the total value of a company’s outstanding shares.
Outstanding shares include all shares, including those available to the general investing public and restricted shares held and available by specific groups.
To calculate market value, you simply multiply the price of a stock by the total number of shares outstanding.

The formula
Market value = number of shares outstanding x price
For example, a company that sold 30 million outstanding shares at $10 a share would have a market value of $300 million.
Based on current market values, the stocks of listed companies are divided into large-cap, mid-cap and small-cap stocks. Some traders break it down further to include extreme small-cap and large-cap stocks.
Let’s dig deeper into large and small large enterprises.
What is a large-cap stock?
Large-cap stocks are stocks of companies with a market capitalization of $10 billion or more.
These companies dominate their industries and often have a significant impact on the economy.
Their businesses are more diversified and may include a wide range of services and products across multiple industries.
What is a small cap?
Small-cap companies typically have market values between $300 million and $2 billion.
They are usually new companies with financial difficulties or a focus on niche markets.
In general, small caps have a narrow business scope, operate in a few geographic areas and offer fewer services or products.
They also tend not to be profitable. They usually reinvest all their profits back into the company to help it grow.
The large-cap example
In the United States, examples of large companies include jpmorgan Chase (NYSE: JPM), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), Coca-Cola (NYSE: KO), General Motors (NYSE: GM), and Disney (NYSE: DIS), both of which are established giants with good positions in their respective industries.
The small-cap example
Consider a company like Copus Holdings (NYSE: KOP), which currently has 21 million shares outstanding and trades at $33 per share. As a result, its market value is €696 million.
Other small-cap companies include Zynex Medical (NASDAQ: ZYXI), Regenxbio (NASDAQ: RGNX) and Ontrak (NASDAQ: OTRK). Small-cap companies are generally seen as more sensitive to the economic cycle than large-cap companies.

Gamma squeezes: How Do they Dramatically Affect stock prices

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As GameStop(NYSE :GME) and other heavily shorted stocks continue to experience spectacular volatility amid the “David versus Goliath” war between hedge funds and a growing number of day traders on social media site Reddit, Wall Street traders are witnessing one of the craziest battles in years.
GameStop’s stock soared to incredible levels in January — at the time of writing, it had a market cap of $18.41 billion — and the buzz on social media has pushed the stock up 1,000 percent over the past two weeks. On Jan. 4, GameStop’s stock was trading at $17.25. But in recent days, the stock has risen more than 500%.

In the early days of the rally, a large number of day traders saw GameStop short sellers as their main enemy, hoping to profit by forcing them to cover their positions.

But the frenzied trading activity has little to do with the long-term prospects of money-losing GameStop and other stocks like blackberry (NYSE: BB), AMC (NYSE: AMC) and Virgin Galactic (NYSE: SPCE).

Analysts call this epic short squeeze on stocks with high short interest rates the “gamma squeeze.”

But before we go any further, let’s remind ourselves what a short-term squeeze is.

Squeeze refers to a market inefficiency situation in which the price of a heavily shorted stock rises rapidly because there are not enough shares outstanding to sell to new buyers.

Short positions are basically a way for traders to bet that a stock will fall. Traders borrow shares from brokerage firms or other traders and sell them on the stock market.

If the share price falls, they buy back the shares and use them to settle the debt with the lender, pocketing the difference.

Now, let’s look at the gamma squeeze.

What is extrusion?
A “gamma squeeze” is a trading term that refers to heavy buying of call options leading to higher stock prices, which in turn leads to higher stock prices, and so on.

A call option is a form of option that increases in value when the underlying stock rises in price.

If a gamma squeeze starts, a group of small retail traders or a large trader bets that a stock will rise and buys short-term call options on that stock.

Once they buy those calls, investment banks and gut investors essentially short the underlying stock.

For example, traders on Reddit’s WallStreetBets forum encouraged each other to buy large amounts of GameStop call options, also known as “deep out-of-the-money options,” at a very low premium, at a price well above where the company’s stock was trading.

If traders buy more calls, market makers and prime brokers will be forced to buy more of the underlying stocks to hedge their short positions.

If calls find themselves “paid out”, market makers will be able to cover their losses.

Like a short squeeze, when a stock’s price starts to rise and traders increase their bullish positions, market makers are forced to buy the underlying stock, pushing up its price.

Investors who sell or write call options hope the stock price will fall, but like shorting, technically the fall can be unlimited because the stock can continue to climb rather than fall to zero.

If a stock is less liquid, the latter can cause the price to rise further, forcing the broker to buy more shares as the value of the exposure increases further as the stock gets closer to the strike price of the call option.

That relationship has led to a phenomenon known as the “gamma squeeze,” which can leave some investors with big losses.

For example, two hedge funds that had bet that GameStop’s stock would collapse have thrown in the towel.

Melvin Capital has closed its short position in GameStop, and Gabe Plotkin, a manager at Melvin Capital, told CNBC that the hedge fund had suffered significant losses.

As a result, its backers, Point72 Asset Management and Citadel, have now pumped about $3 billion into the company to keep it afloat.

Citron Research also announced in a YouTube video that it had closed most of its short positions in GameStop, “at a 100% loss over $90.”

What is a 13F filings and how do traders use this information?

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Stock traders and market analysts must wade through reams of SEC filings, but few are as important as the SEC 13F filings made by hedge funds and other institutional investment managers.

The reason you’ve been hearing about this filing lately is that Reddit’s wild trading has led to wild swings in some heavily shorted stocks like GameStop(NYSE :GME), Koss(NASDAQ :Koss), and AMC Entertainment (NYSE :AMC).

Let’s learn more about what traders on SEC Form 13F should know, including guidance on how to use it.

What is SEC Form 13F?
13F filings are quarterly reports that institutional investment managers must file with the SEC at the end of each quarter to disclose their investments in U.S. stocks.

All hedge funds, mutual funds, trust companies, registered investment advisers, pension funds and insurance companies with more than $100 million in assets under management are required to file 13F documents with the Securities and Exchange Commission.

But in July 2020, the SEC proposed a controversial plan to raise the disclosure threshold from $100 million to $3.5 billion.

The CSRC said it wanted to reduce the compliance burden on smaller INSTITUTIONAL investment managers while continuing to focus on the portfolios of large ones.

They also claim that the relative importance of managing $100m of assets has “declined dramatically” since the 13F form was introduced more than 40 years ago.

While 13F filings can be delayed by up to 45 days after the end of each quarter, they are closely watched by investors, traders, companies, analysts and rival investment managers as the most telling peak of a fund’s holdings.

Some of the best-known hedge funds include Point72 Asset Management, Candlestick Capital Management, Maplelane Capital, D1 Capital Partners, Melvin Capital and Citron Research.

What does SEC Form 13F contain?
Below is a non-exhaustive summary of what the file contains:

The name of the issuer of the securities owned by the Fund.
Description of the class of securities listed (e.g., convertible bonds, put/call options, common shares, Class A shares).
The number of shares held by the fund at the end of the quarter.
Fair market value of listed securities as of the end of the calendar quarter 13F filing.
Where can I find the SEC 13F form
Traders can find 13F filings for a U.S. hedge fund on the SEC’s EDGAR System corporate search site.

EDGAR, short for Electronic Data Collection, analysis and retrieval System, is a website that holds millions of personal and corporate documents.

Here, you can search for hedge funds that interest you under “Companies and people Find.”

You can also get 13F forms from online brokerage firms’ websites.

What Are LUPA Stocks? How to Trade.

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You’ve probably heard stock traders talk about “LUPA” stocks. But what are they?

LUPA is a relatively new acronym for four well-known tech companies that have gone public for the first time in recent years:

Lyft company
Super tech
Pinterest company
reality
The first letter of each stock is LUPA. These stocks are also known as “Paul” stocks.

In this article, we will first look at The LUPA stock as a whole and then delve into each stock.

Leader’s stock
LUPA’s shares are often lumped together for a number of reasons. First, they are all technology companies, which means they often operate in the same market segments.

Lyft and Uber, for example, both run online ride-hailing services, Pinterest runs an image-based social media network and Airbnb is an online home-sharing giant.

Second, before they went public, these companies were “unicorns,” meaning private equity investors valued each company at more than $1 billion. Finally, they are all recent public companies with large losses and rapid growth in the public markets.

Below we take an in-depth look at each of LUPA’s stocks to help you understand their business model and growth potential.

Lyft(NASDAQ :Lyft)
Lyft began trading on NASDAQ on March 29, 2019, and became the first ride-hailing company to go public in a highly anticipated listing valued at about $18 billion.

Lyft and rival Uber have been battling for dominance in the ride-hailing industry for years.

However, Lyft is only available in Canada and the United States, unlike Uber, which spans the globe. Lyft has about 35 per cent market share in the US.

But Lyft, like Uber, is very unprofitable. The two companies offer basically the same basic services, so the competition comes down to market share, driver pay and other factors that can help them achieve positive cash flow.

Lyft’s shares soared 8.7% on their first day of trading, opening at $87.24, well above its initial public offering price of $72 a share. But the stock has taken a sizable hit since completing the IPO. The company is currently trading at $57.06 per share, giving it a market capitalization of about $18.79 billion.

Super (NYSE: Breast)
Uber went public in May 2019, 10 years after The company was founded by Garrett Camp and Travis Kalanick. Lyft’s rivals priced its IPO at $45 a share, valuing it at about $82.4 billion. The company raised $8.1 billion in its IPO.

But the company’s stock has fallen since its debut. At the time of writing, Uber shares were currently trading at $49.80.

Investors have been concerned about the company’s business model and workplace culture. Uber has been hit by a series of scandals, including sexual harassment, embarrassing leaks about executive behavior and suspected spying programs. Kalanick was ousted as CEO of the ride-hailing giant in 2017 after a shareholder revolt.

The company also faces stiff competition in ridesharing and food delivery, and the price war with Lyft and other rivals is expected to continue in each market.

While Uber CEO Dara Khosrowshahi called the first quarter of 2021 “the best quarter ever,” with all-time high gross bookings, the company still recorded a net loss of $108 million.

However, that was a huge improvement over the $968 million net loss the company recorded in the fourth quarter of 2020.

Pinterest (NYSE: Pin)
Pinterest is a social media site that allows users to discover new interests through visual sharing and by “pinning” videos or images to their own or others’ boards and viewing what users have nailed down.

People use it for all kinds of inspiration, like interior design, cooking, clothing and travel. Simply put, it is a visual platform, optimized to inspire users with new ideas and an understanding of one’s taste.

Pinterest shares began trading in April 2019, valuing the company at $10 billion.

Pinterest has been able to put together a stable business since it was founded in 2010. As of January 2021, the company ranks 14th in the world in terms of global active users. It ranks below social networks like Facebook, Snapchat, Instagram and TikTok, but above Twitter.

Pinterest added more than 100 million monthly active users in 2020, its biggest increase ever. While the company won’t pose much of a threat to social media giants Google and Facebook, some analysts believe it still has room to grow.

Its core concept is to inspire users through products, ideas and so on, and create value for shareholders and users. Over the past year, the company has improved its average revenue per user (ARPU) significantly across all markets, and user growth is reasonable.

What are cult stocks and how should you trade them?

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Browse any major financial website and you are likely to see an article about “alternative stocks”. If you’re new to stock trading, this can be very confusing. Are they talking about a company engaging in nefarious activities?

The truth is much simpler.

A ‘cult stock’ is a stock that has a loyal, vocal investor base that is very bullish on the future potential of a company despite the disconnect between its fundamentals and its stock price.

It’s the same idea as “cult movies,” where a film develops a small but significant and absolutely dedicated fan base, which then expands over time.

Read on for a deeper understanding of cult stocks and some of the ways you can trade these types of stocks.

How does a stock become a hot stock
Generally speaking, a stock is called a “cult stock” if it changes hands based on market enthusiasm and sentiment rather than traditional market fundamentals.

“Cult stocks” are often thought of as nascent stocks that tend to lie dormant for a long time. For years, traders have focused on these stocks because they expect them to deliver big returns soon.

The example of alternative stocks
GameStop
GameStop(NYSE :GME) is the perfect example of a cult stock. The video game retailer’s shares are trading at levels unimaginable just a year ago.

The stock is up more than 1,363% so far in 2021, helped by millions of small traders who teamed up on a Reddit forum called WallStreetBets to push the stock higher and squeeze large institutional investors who bet against it.

If you bought the company’s stock for $5,000 this year, you’ll have a lot to smile about: $73,166, to be exact.

However, stock traders and analysts don’t expect GameStop to be profitable this year or next. Revenue growth is slowing because gamers no longer need to go to a physical store (or even buy from online retailers) when they can download new games directly to a console, PC, tablet or phone.

While GameStop’s fundamentals may one day come into play again, for now the stock has become the most influential display for the average day trader in a market that seems more like their everyday plaything.

GameStop has undergone a major management shake-up in recent months, led by former Chewy(NYSE :CHWY) CEO Ryan Cohen. Cohen invested heavily in the video game retailer last year and joined the company’s board in January.

GameStop is a “hot stock because of Ryan Cohen’s success with Chewy,” says Michael Pachter, an analyst at Wedbush, and retail investors “seem confident in the full spectrum of things he can do that will add a lot to their earnings.”