Black Swan Management, LLC

Investments and Strategies for the Future of Business

Archive for November, 2009

Stock Option Trading Guide for Beginner

Nov 19

Posted by admin in stocks | No Comments

There are four different types of players in the stock option trading game. They are buyers of calls, sellers of calls, buyers of puts, and seller of puts. The buyers are called holders, and the sellers are called writers. Buyers of calls are said to have a long position, while buyers of puts are said to have a short position.

Calls are useful in speculation, and puts are useful in hedging. It is all going to depend on the strike price of the underlying asset on the expiration date. If all of this makes perfect sense to you, there is not much need to read on, but if it sounds a bit hazy, a little review might be in order.

The Stock Option market has its own unique language. Like many other activities, an understanding of the terminology used is essential. In many cases, it is a rather simple concept hidden behind an unknown term that leads to confusion, and makes the activity appear a lot more complex than it actually is. The following are a few definitions that might help take away some of the mystery.

- Calls: A call is basically a contract giving you an option, but not an obligation to purchase a block of stocks at a set price on or before a certain date. In understanding a call, it is important to remember that you are not obligated to make the purchase. You can exercise your option or not.

- Puts: A put is the opposite of a call in that it is a contract to sell a block of stock at a set price on or before a certain date. Again, this is a choice. You can make the choice not to sell.

- Holders: This is the name given to the buyers of the contracts. It is the holders that give the option trading market its name since they are the ones who actually are in a position to make the decision to exercise their options.

- Writers: Since it is a “trading” market, two parties are necessary. If someone is buying, than someone else must be selling. The writers are the sellers of the contracts. It is important to remember that the writers are not the ones with the options. They do have an obligation to honor the contract if the holder decides to exercise his option.

- Long Position: In stock trading, long position means that you are holding the stock in anticipation of it increasing in value.

- Short Position: In stock trading, short position means that you are holding the stock in anticipation of it decreasing in value.

- Underlying Asset: The underlying asset, or as it is sometimes called, the underlying, is the actual stock or security that is the object of the option contract. The contract is said to derive its value from the intrinsic value of the underlying asset.

- Strike price: This is the price at which the option contract will be purchased or sold. If you purchase an option to buy, or make a call, at $10 , but the value of the underlying asset is only $8, you are $2 under the strike price, and most likely would not wish to exercise your option.

- Speculation: This is the risk taking side of option trading. It is generally associated with calls and long positions. It essentially means that you are expecting a stock price to rise higher than the strike price.

- Hedging: This is the cautious side of option trading. It is generally associated with puts and short positions. You are anticipating that the value of the underlying asset will drop below the strike price. It is called hedging because it is often used to protect an investment, or hedge your bet, by maintaining an option to sell at a certain strike price should the underlying asset take a serious drop in value. In other words, you are able to bail out before your loss becomes too large.

- Expiration date: This is the date on which your option must be exercised or it will be lost. It is the deadline. In the stock option market it is usually the third Friday of a month.

The above are a few of the terms that are used in the stock option trading market, and by understanding them completely you should be better armed to take a closer look at this interesting investment opportunity.

About the Author
Among the Many Investment Opportunities that Exist, Option Trading Stands as Both One of the Most Exciting and Risky as well as One that Offers Some of the Best Chances for a Substantial Return.

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Stock Option Trading Guide for Beginner

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FOREX Versus Futures Market – What Is The Difference

Nov 19

Posted by admin in stocks | No Comments

Today’s market takes root in the agriculture markets of the 19th century, when farmers began to sell contracts to deliver their crops at a later date. This was done to anticipate the needs of the market and stabilize supply and demand during poor crop seasons. Like goods and services, the contracts themselves soon became seen as valuable. A grocery store chain, for example, might want to bid on such a contract to ensure that they, and not their competitors, have fresh strawberries during the winter.

1. The Futures Market

The current futures market, of course, includes far more than just foods! It is a market for all sorts of commodities including manufactured goods, agricultural products, and financial instruments such as currencies and treasury bonds. A futures contract states what price will be paid for a product at a specified delivery date.

2. Playing The Futures Market

When an investor plays the futures market, the actual goods are not important and there is no expectation of a real delivery. After all, locusts or the elements of nature could destroy the crop. As such, the value of the contract itself changes daily according to the market value of the commodity.

3. How Transactions Work

A futures contract has a buyer and seller. The contract specifies the buying price, a quantity of goods, and a delivery date. You can never lose money on a futures trade – you will never pay more than the initial amount of the contract. By locking in prices at a fixed rate, you ensure that you will still get that price years from now, protecting against price raises. On the other side of the coin, if the value of the commodity drops, the producer will make money.

4. How Is Profit Made?

In the end, investors are hoping to profit from the daily fluctuations of the market. They buy long term contracts and hope the market will rise the value of the commodities. This way, they can buy low and sell high. Alternatively, those wishing to sell their goods can offer short term contracts if they expect the value of those items to go down.

5. The FOREX Market

FOREX is trading in currencies. It is therefore very liquid in nature – you will never get stuck with two hundred boxes of strawberries that have to be sold within 2 weeks or they will go bad and youll lose a lot of money. Far, far less slippage occurs in the FOREX market compared with the futures market. Slippage is a term that refers to you losing money.

6. Always Open

While most futures exchanges can happen 7 hours in any given day, FOREX is open 24 hours a day for trading. This makes futures far more liquid, able to take advantage of trading opportunities as they arise.

7. No Commission

Traders pay a fee for each transaction they enter into instead of having to pay commissions to brokers. There is a very high volume of trading FOREX transactions are almost instantly executed. This minimizes slippage and increases price certainty. Brokers in the futures market often quote prices reflecting the last trade – not necessarily the price of your trade.

About the Author
For more great forex market related articles and resources check out http://commodities-futures.info

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FOREX Versus Futures Market – What Is The Difference

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Building Wealth

Nov 19

Posted by admin in wealth | No Comments

For almost anyone, one of the biggest concerns in life is building wealth so that you and your family are comfortable and prepared for the future. This isn’t always easy, and many people struggle when it comes time to decide what is the best way to build wealth.

There are so many options, the average person can become confused. The basics of going to work, and then depositing money into your savings account are pretty simple, but quite often this is not enough to build wealth to keep you going throughout your life.

There are a lot of programs out there designed to help you build wealth. You can take advantage of these, but remember that most of these programs offer you advice and nothing more. After that, you are on your own. If you really need someone to hold your hand through the process for building wealth, you might want to find a personal financial advisor that can help you on a daily or weekly basis.

Beware of the scam artist. They are out there, and when it comes to building wealth, they know what they are doing. Keep in mind however, that building wealth for your benefit is not what they have in mind. They are looking to pad their own accounts at your expense. Do you really think you can make thousands in a week by reselling real estate? It’s not likely, especially if you have no experience.

Building wealth isn’t as easy as listening to some guy tell you how to buy houses, it has to be something you can actually do. Not a lot of people looking to build wealth have the money for this type of scheme, nor do they have the credit to borrow it.

When you are really serious about building wealth, take some time to consider your options. Many people have gone about building wealth with wise investments. This can work for anyone, because you don’t have a lot to start. You can begin with a few very small investments, and then as your money grows, you can expand to make even more.

You can also build wealth by starting your own business, or by finding something you love to do, and chasing it down with a passion that makes building wealth easy. Sometimes, building wealth might be as simple as following your dreams. The more passionate you feel about something, the more you are going to put into it.

About the Author
Money Market Savings Account is an informative resources site on everything Money Savings related.Find out how Money Market Savings Account can expand your horizons.

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Building Wealth

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Weddings Are BIG Business

Nov 19

Posted by admin in business | No Comments

Did you know that the average wedding in the UK now costs �17,000? I dread to think how much that is an hour!

Of course, no-one wants to deny the bride her big day and nowadays you can quite literally have what you want. If you want personalised wedding rock as favours, a chocolate fountain, a snow machine, your own wedding website, bespoke jewellery or bridal shoes dyed to order you can have it all. But, weddings don’t come cheap and sadly so many companies are making too much money on bride’s big day!

When planning our own wedding recently, we felt that companies were ‘cashing in’ on brides and their often extensive budgets! Why do people think that bride means ‘loaded?’ I don’t know many engaged couples who have a spare �17,000 under their mattresses – do you?

When sourcing photographers, venues, bridal dresses, bridal shoes, caterers and stationers, we were horrified to discover how much people were charging, and how much people were obviously prepared to pay. We also found that many companies did not have helpful staff at the end of the phone. Unless we were physically making the booking there and then, we were left feeling undervalued and unimportant.

Have times changed so much that companies only deal politely with customers who are bearing a cheque book?

If so, that’s such a shame. I think many companies forget that being helpful to customers – whether they are buying or enquiring – can be the difference between future business or not. When did everyone become so sales target driven? When did people stop just ‘talking’ to customers? Most future brides spend an entire 18 months talking incessantly about weddings – usually driving their nearest and dearest mad. Brides love having new ears to bend!

Recent years have also seen an explosion in internet sales. More and more people are choosing to buy over the net. We also found ourselves trawling through so many different wedding websites and to be honest, found so many of them very difficult to navigate. Equally, sites that were well publicised often had very limited collections. Products were either stunning but overpriced or cheap and nasty; there was no halfway-house.

Whatever budget a bride is working towards, no-one wants to pay over the odds, yet we all expect quality, especially on our big day. Also, everyone knows that when it comes to weddings, a bride knows exactly what she wants and there is no room for compromise!

It was through planning our own wedding, that we identified a gap in the market. The gap was for good quality wedding favours and wedding accessories at realistic prices. We made it our mission to provide brides with a simple-to-navigate website containing a extensive selection of quality products. The products range from traditional to modern and there are favours to suit all types of bride and more importantly, if you want to call us, then you are guaranteed a friendly voice at the end of the phone.

Good luck with all your wedding plans and remember to enjoy it. It’s supposed to be your dream day, not an over-priced nightmare!

About the Author
This article is brought to you by Unique Wedding Favours and sponsored by Brentwood Estate Agents

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Weddings Are BIG Business

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The Cold Facts of Starting Your Own Small Business

Nov 19

Posted by admin in business startup | No Comments

Do you have the right stuff to make it work? Ask yourself these five questions before making that leap from steady paycheck to entrepreneurial uncertainty:

1.Are you a self-starter?
You must have the self-discipline to plan, set goals, not procrastinate and stay focused.

2.What are your expectations?
Do you think you’ll work less and have less stress and more money? Think again.

3.What are your financial goals?
Be prepared to work more for less money, at least in the beginning. Set up your retirement plan in the beginning and stick to it. Forget vacations and be sure to keep your health insurance going….now there is no one but you to take care of these things.

4.Can you plan and organize?
You’ll be making countless decisions each day. Can you make a workplace for yourself that is free from distractions, where you can think, plan and communicate?
To be a success, you must combine your fantastic ideas and business tools with solid planning and organization.

Success is never guaranteed and the variables and factors can sometimes be out of your control. But if you ask yourself honestly, before taking the plunge: Do I have what it takes to run a business? The answer should tell you if the “American Dream” is right for you.

95% of small businesses fail within the first five years? Why?

Here are a few reasons why:

1.Mistaking a business for a hobby.
Just because you “love” to cook doesn’t mean you should/could start a restaurant.

2.Poor planning.
Have you researched all aspects of start-up costs and on-going expenses? Do you know what your monthly nut is going to be and do you have enough capital to carry you through for several years? Do you realize the sheer number of hours you’ll be working? Do you have the management skills to wear all the hats necessary?

3.Only one product, one service or one big client.
Markets change and needs change…will you have the foresight, flexibility, resources and ingenuity to change with the times? Diversification will cushion you against the ebb and flow of business tides.

4.Poor record-keeping and financial controls.
If you don’t know how to keep records and do accounting and file taxes and other business filings, find an expert to do it for you! Learn how to review your revenue and expense reports each month so you always have your finger on the pulse of your business.

5.Poor money management.
Be prepared to plow all revenues back into your business for the first several years. No frills, no thrills, stick to a budget and a plan and forget vacations. Don’t use any of the business income on personal spending and watch your business and personal debt, it can kill your new business faster than a speeding bullet.

6.Wrong location.
Can your customers easily find you? You know the old saying “Location, Location, Location!” What about visibility, image, parking, room to expand?

7.Competition.
Check out your competition. Know who they are, what they offer and what makes your products or services better (or worse).

8.Poor time management.
Wearing many hats is a reality of an entrepreneur. Learning how to manage your time means the difference between success and failure. A daily “To Do” list is essential, with the top priority items at the top of the list. Hire help for those things you don’t know how to do or hate to do.

9.Lack of Marketing and Sales Skills
Keep track of what marketing/sales ideas work and don’t work and quickly drop those that don’t work. Hire a pro if you need to.

10.Poor Customer Service.
Once you have a client, you need to keep them. This means you have to pay attention to the customer, fulfill their needs in a timely manner, return their phone calls and emails promptly, bill them properly, utilize a win-win problem-solving attitude and BE NICE!

11.Entrepreneurial burnout.
Owning your own business requires a huge investment of time, money, energy and emotion. Take time off for yourself, you are your greatest asset!

A lot of people do not realize that entrepreneurs play a big role in our society.

When you put the total number of entrepreneurs together, they count as the biggest financial contributors to our nation’s wealth. If only politicians would give grants to finance small business start-ups, the economy’s growth could be hastened.

Knowing the obvious financial rewards and the important role to society of business owners, many individuals aspire to be entrepreneurs. The fact remains, however, that several business start-ups fail and never take-off from the ground because of one thing: the lack of adequate and sufficient knowledge on how to start and run a profitable business.

With proper planning and research and the necessary professionals to help you in the areas that you are lacking in, accompanied by adequate capital and resources, and fed by imagination, energy, excitement and self-discipline, you could be one of the many successes that is the backbone of the American economy.

About the Author
Cynthia Macy has been successfully self-employed since she was 28 years old. She has traded foreign currencies and has co-authored 3 forex training ebooks.http://www.featureblog.com/blogs/bestsmallbusiness/http://www.featureblog.com/blogs/successtrading2000/

Article source:
The Cold Facts of Starting Your Own Small Business

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Information – The World’s Greatest Commodity

Nov 19

Posted by admin in technology | No Comments

How do we know that? There are so many reasons why information is the greatest commodity in the world. Information helps people. It spreads the knowledge of topics and subjects. It is the basis for every study, occupation, and hobby. The most important reason why information is the greatest commodity in the world, a reason that effectively sums up all others, is simple-everyone needs information.

Who provides information? Experts, or just people who seem to know a great deal about a certain subject, provide information about a subject to those of us who have limited experience with it. Face it-there is no single person in this world who knows everything, though some may think so! Eventually, everyone has to ask questions and seek answers to matters they do not understand. And since it seems everyone knows something, providing information throughout the world is easy.

Where did we use to get our information? Much of our information was from books at the library, schools, newspapers and magazines. We had to really look for our information!

Today with computers becoming more and more common you can find information everywhere. The Internet is one of the fastest, most inexpensive ways to obtain information about an innumerable wealth of subjects. Search engines are extremely useful, as are specialty websites.

Offline sources are still widely used and will never go out of date. These include schools, libraries, and people themselves. Ever gotten a lecture from your dad on the importance of changing your oil regularly? Guess what-he was providing information.

Since information is the greatest commodity in the world, profiting from it can be easy. Consider teachers, for example. Their main business is to provide information to students, sometimes all year long. Book authors, website owners, and even religious figures are all trying to provide information of some sort.

Making it your business to provide information, when correctly executed, will be profitable for years to come. The need for information is not a trend, and it will not go out of style. Since we know why information is the greatest commodity in the world, we also know why it will continue to be just that. Whether you provide your information on or offline, you can earn income and even make a living.

The human beings thirst for knowledge will never end – this is what keeps us growing and evolving. Make it your business to continue learning about your busniess – every thing about your business – and then share that information with anyone who asks. This is how you will succeed in business and in life.

About the Author
Find the best proven home based business ideas so you can be successful here.

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Information – The World’s Greatest Commodity

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