Put Strategies

Short selling, a help or a hindrance? I am not talking about individual traders who enjoy the ability to short sell shares, I am referring to the existing shareholder. Whilst existing holders may not want anyone shorting their shares on a certain level, if the shares are shorted, and the shareholder has done their homework, then they should know when the shares have become good value and can buy more accordingly. Of course it is annoying when you want to sell the shares yourself and others are already forcing the price down.It is interesting to see that the FSA are still hunting for someone to blame over the HBOS debacle. Perhaps they have not looked at the share price since the fateful 19 March. On that day the stock hit a low of around 400p but then a huge swathe of investors, small and large, bought in on the news that the Board was insisting that they had no problems. Even the Bank of England and the Financial Services Authority popped up to lend support. The price then rallied to 615p. Now, though, we know better. For the last 3 weeks or so that stock has been stuck in a 260p to 280p trading range. That is more than 55% down. Imagine if you were the trader buying at 615p. So who is the enemy of the investor, is it the short seller who in this case gave a very good early warning to anyone holding the stock or is the blame better attributed elsewhere.Trying to force a share price lower via a bear attack can be a very dangerous activity for the participants as they can easily get caught the wrong way round. A badly conceived strategy can lead to a concerted move by Market Makers or a Stock Lending moratorium by major holders which can easily lead to a spike higher which forces the shorter to take a major hit. Sudden takeover rumour also causes havoc for shorters.Looking at the Alliance and Leicester / Satander deal there has been a slightly different reaction. No one felt sorry for traders shorting via borrowing stock, placing CFDs, spread betting or otherwise. There was a lesson for everyone on the Friday that the possibility of a deal was announced. Some £150m was probably lost in just a few minutes by funds betting on continued weaknes. Alliance and Leicester shares were one of the most heavily borrowed stocks on the block. The price opened some 40% higher from the close on the Friday and traders would not have had a chance to get out of their positions. The shares rallied to well above the Santander offer. Anyone shorting was forced to cover their position at any price.Readers should always remember that anyone can take advantage of being short via a huge array of instruments. Buying Put options, Selling Calls, selling stock and borrowing, Selling CFDs or, most simple of all, just selling a market via Spread Betting through companies like Financial Spreads. It is not just the larger funds who can take advantage of an inflated share price.Whilst it can be a profitable form of speculation in today’s bear market, selling a share or commodity does have its risks. Just like buying shares and commodities have their risks.Financial spread betting carries a high level of risk and may not be suitable for all classes of investor. Only trade with money that you can afford to lose. Make sure you fully understand the risks involved. If necessary, seek independent financial advice.

The potential of microfinance to pull the current generation out of poverty has received much media coverage. Tons of rhetoric has been spun about socially responsible capitalism and the new age investor guided by his moral compass. Wealthy CEOs like Bill Gates and financial heavyweights like Deutsch Bank are channelling millions towards the provision of micro-loans to aid the absolute poor. The United Nations declared 2005 to be the International Year of Microcredit, shining a light on the 1 billion people that subsist on less than a dollar a day. 2006 saw Muhammad Yunus and the Bangladesh Grameen Bank recognised for their grassroot micro-lending efforts with the Nobel Prize. Microfinance Institutions (MFIs) with their noble aim of serving the poorest of the poor have thus met with a lot of enthusiasm and favourable coverage. Don’t get me wrong, microfinance has some highly benevolent goals. However these aims entangled with rudimentary infrastructure, failing government responsibility and tough market conditions, suck the possibility of any sustainable development into a black hole.

Microfinance has traditionally been defined by the intent of the lender. It refers to the disbursement of small loans (usually less than $1oo) to the poorer sections of society, ignored by traditional banking systems. These loans that aim at inducing entrepreneurial abilities through capital investment are usually offered by non-governmental organisations (NGOs) and non-banking finance companies (NBFCs). MFIs in their current form came into existence nearly 30 years ago with Muhammad Yunus’ Grameen Bank in Bangladesh and scores of cooperatives and self help groups in India. Besides loans, MFIs also offer innovative savings schemes and insurance facilities, usually deploying peer pressure and group dynamics to inculcate model saving behaviour. NGOs also tend to supplement their micro-lending activities with training programmes on saving money, health and family planning education programmes.

MFIs fill a huge void in India’s development strategy. With government sponsored development failing in its universality, these institutions are putting some of the control back in the hands of the common people, giving them an opportunity to secure a better life for themselves and their dependents. Through women specific programmes, MFIs are also increasing the participation of women in economic activities in the vehemently patriarchal rural landscape. According to the World Bank (2005), 7000 MFIs serve 16 million people in developing countries. Yet 30 years after inception, MFIs continue to suffer teething problems at the grassroot level. 90% of their loans never get completely paid off. Customer profiling remains non-existent. In fact, a 1998 study presented by Khandekar that attributed the rise in Bangladesh household income to microfinance activities, was thoroughly disputed by Morduch who used Khandekar’s data itself to prove that the perceived rise in income was the result of an erroneous assumption that the study’s subjects had started out below the poverty line, while in reality they had always been living above it. Morduch proved that microfinance benefitted the moderately poor rather than the destitute.

While most academic and business literature focuses largely on the positive impact of MFIs as the new poverty alleviator, most of their arguments remain anecdotal and qualitative in nature, as there is a serious lack of data on the performance of MFIs. Studies by Littlefied (2003) and Dunford (2006) have failed to find conclusive proof of the MFIs contribution to poverty alleviation.

In most developing countries, NGOs are forced to make tough decisions as they are forced to walk a fine line between profitability and social development. Several of them like SEWA started out as third party mediators between banks and the poor, but eventually set up their own MFIs out of frustration with corruption, red tape and the banks’ inability to respond to their requirements. NGOs face a trade-off between serving the poorest of the poor and staying economically viable, which in turn affects their micro-lending activities. Subsidising microcredit disbursement eventually means that they have to resort to external funding to stay afloat. Success stories like the Grameen Bank that stopped borrowing external credit since 1998 are few. The Consultative Group to Assist the Poorest (CGAP) reports that only 3-5% of the MFIs are financially sustainable and over 90% of them are likely to fold in the near future.

Several studies including the aforementioned Morduch (1998) study have pointed out that MFIs do not reach the poorest of the poor. This is because MFIs consciously exclude these high risk populations that are in no position to display any credit history or savings or offer any loan collateral, which are the standard requirements for any loan. As these people are risk averse and in greater need of liquidity to smoothen their immediate consumption curves rather than for future investment, they consequently end up getting caught in the vicious nets of local moneylenders. In another vicious circle of their own, MFIs have to display their viability to their donors and funding agencies in order to attract continued funding, which perpetuates their ignorance of the poorest of the poor.

Lack of adequate information systems at the grassroots levels also makes it impossible to independently verify the performance of the MFI and its fund disbursement. Tracking systems or even manual records are rarely complete. There are no organised attempts to collate information or profile the customers that MFIs cater to. This makes the entire funding process questionable. There is no way to tell if the funds are going to the correct people or are being pocketed by corrupt middlemen. Or if the disbursed funds are even being deployed for their original intentions. Or if the funds intended for women’s empowerment have been wrangled away by their men folk.

MFIs also struggle with the high loan disbursement and collection costs. While group lending was earlier thought to reduce monitoring costs, given the small size of the loans, disbursement costs formed a larger percentage and could not be offset. NGOs have now also started focussing on individual lending claiming it to be more profitable. This again implies that they target the comparatively less poor sections, which does not help achieve their double bottom-lines of profitability and poverty alleviation. As Muhammad Yunus once stated, if development programs include the poor and the non-poor, then the poor will automatically be pushed out by the non-poor.

Another rarely discussed pitfall of the spread of MFIs and their supporting funding agencies is the dependence on credit that is created among the poor. Behind the noble cause of poverty alleviation lies the questionable agenda of bilateral agencies like USAID that focus on expanding the interests and markets for their home countries. Furthermore as people start to avail of micro-loans, a steady repayment history qualifies them to avail of additional larger loans, which coupled with insurance and other credit facilities, creates a circle of lifelong debt. With microfinance receiving considerable media interest, more NGOs are jumping onto the bandwagon, moving away from traditional focus areas like education, sanitation and health. Lack of microfinance did not create poverty. A combination of social and political factors did. As MFIs seek to perpetuate their existence and fortify their roots, certain critical aspects of the fight to eradicate poverty are consciously ignored.

To conclude, while poverty alleviation is a noble intention, MFIs cannot fight this battle alone. The hype around them has conveniently ignored the fact that these are market driven initiatives that have arisen because the government has failed to protect the interests of the larger society. In India, while the stock market makes the rich richer, 70% of the population hovers around the poverty line. Availability of steady employment opportunities is the only way to reduce poverty. Not everyone possesses entrepreneurial skills or can run their own business. Besides how successful can an MFI be in the absence of adequate infrastructure? Concern must also be expressed about the MFIs ability to function under market conditions like hyperinflation. While there are no performance standards or best practices advocated for MFIs, there is no denying their beneficial intentions. At the same time, we in India must take our government to task for its failure to ensure equal opportunity to all its citizens, even sixty years after independence.

(Reference list available on request)

The Strangle is another option strategy that features the use of options in unison with each other. The Strangle is philosophically identical to its ‘cousin’ the Straddle. However, whereas the Straddle has a single strike as its focal point, the Strangle has its focal point spread out over two strikes.
The effect of this as compared to the Straddle is that the Strangle will produce wider break-even points and lower prices. The widening of the break-even points changes the risk/reward scenarios for both the buyer and the seller of the Strangle as opposed to the Straddle.
The benefit to the buyer of the Strangle is that it will cost less than a Straddle (thus less risk) but, like all risk/reward scenarios, less risk equals less reward. The buyer’s trade-off for lower cost and less risk is that the stock will have to move significantly more than if the buyer had purchased a Straddle.
The benefit to the seller of the Strangle is that it offers a larger margin of error in terms of the anticipated stock movement. The wider range of the break-even prices allows the stock to have more movement while still allowing the seller to profit. The seller’s trade-off for this luxury is price. The seller will not bring in as much premium from the sale of a Strangle as opposed to the sale of a Straddle.
With that said, let’s look at the Strangle. The Strangle, like the Straddle, consists of two options. In the Strangle, however, the two options are not at-the-money options of the same strike (Straddle), but out-of-the-money options (both a call and a put) of different strikes.
The Strangle features one position (either long or short) and two options: an out-of-the-money call and an out-of-the-money put.
When you put together a Strangle the construction should be as follows:
- Different options (out-of-the-money call & an out-of-the-money put)
- Same stock
- Same expiration
- One to one ratio
Strangle positions are referred to as ‘long Strangle’ or ’short Strangle’ depending on whether you purchase the call and the put (long) or sell the call and the put (short).
For example, with the stock trading at $57.50, you would construct the long Strangle by purchasing both the July 60 call and the July 55 put. You would construct the short Strangle by selling both the July 60 call and the July 55 put.
It is important to note that the Strangle is a one to one ratio strategy. For every call that you buy (or sell), you must purchase (or sell) exactly one put to properly construct a Strangle.

The economic downturn will not stop people from spreading holiday cheer for there friends and family this year.

According to the latest Gallup poll, Americans estimate that they will spend on Christmas gifts somewhere around $600 which has been a consistent benchmark throughout the holiday season. On the nightly news, there was one answer that kept getting repeated, “I will worry about it later”. That thought stuck in my head for days as I was looking over economic data that showed double digit unemployment growth and the data of new job creation being a little misleading. After reviewing the information I came to the answer that the data is not the driving force.

At some point people have to stop being practical and just say, “we will figure out away to get through this.” At some point that strategy is all you have, especially when so many things are out of a individuals control. When something is so far out of your control it seems like the only thing that one can do is throw their hands in the air. Instead of taking this approach we have to figure out personal strategies that help us get closer to our goals. Because if will listen to the talking heads on TV one minute they will tell you “We will see growth in the first quarter of next year” and then the next day they say, “we do not see growth for the next 18 months”. I think the only thing is we can conclude is that at some point American innovation will see us through this crisis. But during this crisis we need to be proactive! I think for most Americans the goal is to acquire the least amount of debt, so when the turn around happens, we can prosper.

But as a Credit Professional I fell obligated to give you a few tips for the holidays (I got in this business to see people prosper) : Avoid the store cards

At some point we will see the end of this crisis. Hopefully soon than later! In the meantime lets do all we can to end our own personal financial crisis and the nation will follow. I hope everybody has a happy holiday!  If you would like more information about our Credit Repair Program please feel free to contact us!

A hedge is an investment made to offset the risk incurred by entering another investment. Essentially you are setting up a bet on both sides so that one offsets the other and you can end up winning either way.
Think of it as a form of insurance.
Options are frequently used in hedging.
For example, you can speculate that the market price will rise in the future and buy a call today. But, because the market is uncertain and you’re not certain it will rise, you simultaneously buy a put option.
By carefully selecting the appropriate combinations of strike price, expiration date and type of option an investor can minimize risk and maximize the probability of making a profit.
So how does it all work?
Well let’s take a look at a common hedging strategy: the Strangle.
In this strategy, an investor holds both call and put options with the same maturity, but with different strike prices.
The contracts are purchased ‘out of the money’ and are therefore cheaper. ‘Out of the money’ means the strike price of the underlying asset is higher (for a call) or lower (for a put) than the current market price.
For example let’s say Intel (INTC) is currently trading at $40 per share. You could buy one call at $3 and one put at $2 with the call having a strike price of $45, the put $35. Your total investment would be ($3 x 100) + ($2 x 100) = $500.
If the price over the length of the contracts stays between $35 and $45 the total possible loss = $500, the cost of the options. So your risk in this kind of hedge is limited to $500.
Suppose the price drops near expiration to $25. The call would expire worthless, but the put is worth ($35-$25) x 100 = $1000 – ($2 x 100) = $800. Subtract the cost of the call, $800 – $300 = $500. So that’s your net profit (ignoring commissions and taxes).
The difference between the exposure and the potential profit represents a kind of hedge. Though you are essentially ‘betting’ that the price could go either way, your downside is limited to the combined cost of the put and the call.
There are, not surprisingly, nearly as many hedging strategies as there are investors. A couple of common types are:
The collar: Hold the underlying asset and simultaneously both buy a put and sell a call of the same asset. The short call limits gains, but the long put hedges against any losses from the underlying asset.
The protective put: Buy the asset and also buy a put option on the same asset. At expiration, the asset may have gained (eliminating the value of the put option), but the rise in the asset offsets the loss.
And there are a whole host of other variations. Most do involve speculating on the price direction of the underlying asset, while taking advantage of the leverage, cost and timing characteristics of options. As with any investment strategy, make sure you understand the pros and cons before laying down your bet.

If the borrower has committed to staying in the property and fighting through the difficult period of pending foreclosure many lenders and their servicing agent are offering possible solutions. Early on, with mortgage lates, borrowers are being contacted with possible workout solutions to get caught up on their payments. However, many mortgage products with accelerating payments make it difficult for any mortgage borrower to recover. In the past, forbearance was the tool of choice to be utilized for a borrower to get caught up with payment arrears. For example, if a mortgage payment of $1,500/month is three months down and soon to be four, the mortgage company might take this arrearage of $1,500 x 4 = $6,000 and spread it out over say a years time and a catch up payment of $6,000/12= $500/month. The regular payment of $1,500/month needs to be made plus the $500/month in the forbearance portion for a total of $2,000/month to get caught up and avoid foreclosure. In the past, this might have worked, now however, many borrowers are being crippled with accelerating payments of the first of say an Option ARM, or a 2/28 ARM that is adjusting way up and forbearance won’t do the job. Rather, in many cases, a whole new loan product has to be put in place to even have a chance of rectifying the adverse mortgage situation.

Now the “old” forbearance has been modified to become even more flexible. Mortgage companies, with the current inventory of unsold homes, do not want to foreclose and end up taking an even bigger hit when and if the home sells after foreclosure. The writing has been on the wall for many lenders in this past year, work out the loan or eat huge losses. If someone is in the home and making payments, it can soften the massive write-downs that will follow in this extremely soft market.

Things were going ok for Jim and Terri until the auto accident that put Jim out of work and laid up with a broken leg and a disc problem. What savings they had were burned through in less than a month. The auto insurance covered very little of the medical bills and Jim’s insurance at work carried a sizable deductible. The biggest challenge came for their family when Jim was not able to work for what was predicted for six months. The luxury items were the first to go. Because Jim was upside down on his car that was totaled there wasn’t enough insurance settlement to pay for the debt. Jim was still on the hook for the difference and monthly payments were being demanded by the auto finance company. Jim’s attorney shared that there might be a chance for some type of settlement until he discovered the driver of the other car that had caused the accident was not insured due to a recently lapsed policy. The insurance carrier was not going to pay anything. Jim’s attorney, a high school buddy, was going after the assets of the at fault driver but it would take some time to even begin the process. Jim and Terri had worked hard for five years to buy their first home and were just getting ahead when the auto accident occurred. With several months passing, the young couple was not able to pay even the minimum payment of their four credit cards. The mortgage payment had not been made for the past three months. The phone was now ringing off the hook for medical collections, the auto finance company and the mortgage company was now threatening to foreclose. Terri took a part time job in addition to her full time job as an office manager at a collection agency. She knew that game inside out. With two kids it was becoming very clear that bad things were under way and if something didn’t happen to turn the situation around, her family would be moving back into a small apartment again with trashed credit to boot.

Fortunately, Jim and Terri’s families were close by and could help out with babysitting while Terri worked. Both of their parents were of modest means and not able to offer any financial help but were happy to pitch in with the kids and some of the maintenance work around the house. Jim was flat on his back with recovery time many months down the road. Jim had the phone close to his bed and he had been screening telephone calls for bill collectors and such. On a Friday, Jim received a call from the mortgage company that held their loan and at first Jim was going to ignore it. Jim figured he had quite enough “gut calls” for the day. The caller was in the process of leaving a message on the answering machine and was going on at length over the details of a plan from the mortgage lender that would help Jim and Terri get back on their feet. In the middle of the message, Jim lifted the phone and spoke with the caller. It was a friendly voice. Jim spent almost an hour on the phone with explaining his situation and sharing the tale of woe and their streak of bad luck. The caller’s name was Toby and after the conversation concluded, he suggested he would call back by Monday and would give Jim and Terri a concrete proposal to try and mediate the mortgage short fall. After Jim hung up, he could only wonder if anyone could help him out of this financial mess. Sure enough, Toby called back Monday with a proposal. Toby explained his mortgage company decided to be very proactive with customers who had fallen behind and found it in their best interest to try and bridge the gap between their current situation and possible foreclosures. Another hour was spent going over Jim and Terri’s family budget just to determine the short fall and rank what items could be quickly cut to generate a better monthly cash flow. At the conclusion of the call, Toby suggested that if Jim and Terri could tighten up their budget and eliminate in the short term, cable, cell phones, eating out, sell the one remaining car that had some equity and get a transportation vehicle the bank would substantially help with the payments. This would allow Jim and Terri to bridge to a time when Jim could get back on his feet and return to work. Since the loan in question was an FHA loan, the lender was going to advance an interest free loan in the amount equal to twelve months of principal and interest payments including taxes and insurance. This was made possible by the lender making a “partial claim” to the FHA insurance fund, that is borrower funded, to help Jim and Terri get back on their feet. This was not a gift. Every penny would need to be paid back down the road. When borrowers use the FHA program they normally pay 1.5% of the mortgage amount up front called the UFMIP (Up Front Mortgage Insurance Premium) plus they pay .5% of mortgage amount spread out among monthly payments. The bulk of these insurance premiums are by and large used for foreclosure actions. Loans that are insured by FHA pay the lender the difference of the foreclosure sale and the loan balance plus costs. This can be 25% to 30%+ loss for FHA. The thinking here by FHA is that if they can extend a hand and get these folks back on their feet in say a years time, it would be saving FHA a ton of money. This proactive approach is showing positive results. Jim and Terri seized on the proposal and in time were able to work out their financial situation and Jim was able to return to work. FHA was made whole in time; the credit card companies cancelled the accounts and agreed to take smaller payments for as long as necessary to get them settled at a reduced nominal interest rate. Terri was a good negotiator. Jim’s attorney was able to get a judgment and squeeze enough money out of the ticketed driver and get some funds from the uninsured motorist fund. This allowed Jim to payoff the “up side down” portion of the totaled vehicle with enough additional cash to buy an older pick up truck with the remainder monies. Terri was able to give up her part time job and the family slowly pulled themselves up by the bootstraps and they got back on their feet. The trailing medical bills were negotiated down after several over charges were discovered and a low monthly payment was set up. All in all, Jim and Terri considered themselves lucky in that the mortgage company stepped forward to offer a workable plan to save their home. It could have gone the other way very easily.

Lenders have recognized that the “bottom line strategy” of trying to work with borrowers who are in trouble pays off. From specially trained customer service representatives, like Toby, who are engaged counselors and not just adversaries. A customer service representative armed with tools like forbearance plans, to reworking old loans to new loans, to FHA, Fannie Mae, Freddie Mac, all pitching in to help resolve and mitigate any salvageable financial situations. The borrowers will need to make an effort to meet the lender half way and do what they need to do to keep their home. For any homeowner, financial disaster can be just a car crash away. Fortunately, lenders are now stepping up their efforts to help families in trouble with paying their mortgage. Again, bottom line, the lender and the borrower can win.

Dale Rogers

http://www.brokencredit.com

These days, with millions of ads and marketing messages hitting us from every direction, the most important key to building your marketing strategy is trust.
Does your marketing net you as much as you’d like? Do your ads help you generate lucrative prospects weekly and monthly? Are you able to convert leads into paying clients with your marketing?
If the answer is no, then maybe you aren’t expressing your trustworthiness enough. No one in the world will every buy anything from you if they don’t trust that your products and services will do what you say they will do.
Do the words and images you use in your marketing help establish the trust necessary to convince prospects to believe in and buy from you? If not, then you’ll benefit from the following strategies geared toward converting prospects to clients.
1. PROVIDE EXAMPLES OF YOUR CLIAMS
Rather than making impersonal and dramatic claims of what your products or services do, use examples. Examples are far more believable. A case study is an ideal way to explain exactly what you did for someone and the difference it made in their life or their business.
2. GIVE THINGS AWAY FREE
Giving things away free is a great way to build trust. You can give anything, like a keychain, your grandma’s prized apple pie recipe, an e-book or article. Giving something to people, regardless of the cost, makes them more likely to trust you and even to return the favor by buying something from you.
3. PUT OUT ARTICLES INSTEAD OF ADVERTISEMENTS
Being inundated with advertisements 24/7 has instilled in us a deep distrust of ads. We tend to believe instead what we read in published articles. Rather than putting out countless ads, your time would be better spent writing articles. This establishes you as an expert who is willing to help, rather than a company trying to get people’s credit card information for the sole purpose of making money.
4. TESTIMONIALS, TESTIMONIALS, TESTIMONIALS
Convince your target that you’re worth what you say by showing them what past clients have said about you. These are called testimonials, and if you aren’t using them you’re missing a key ingredient in your marketing and advertising. They’re not hard to get. Just contact some past clients, ask what they thought of your product or service, what they liked about it and how it was helpful. Then, edit their comments, ask for their permission to use their edited words, and use this material in your marketing and ad campaigns.
5. SPEAK DIRECTLY TO YOUR TARGET MARKET
In this industrial-economic empire that we call America, with skyscrapers and big multibillion dollar companies all around us, it’s easy to lose sight of the fact that we’re all human. So a common misperception is that in order to sound credible your marketing should be cold and impersonal. Instead of trying to act stuffy and distant, you should do the exact opposite. People do business with people, not steel buildings and dry corporate entities. Show photos of yourself and your staff, talk directly to your target market, explain in human terms why they should trust you, be passionate and have a bit of personality.
6. GET AS MANY REFERRALS AS POSSIBLE
What is the first thing you do when you need an accountant, plumber, doctor, lawyer or web design company? You ask a friend for a referral, don’t you? Why? Because you trust the recommendations of friends, family and people you know. For your own business, instead of waiting for the occasional referral, implement a system to generate referrals. Use the “I’ll wash your back if you wash mine” approach. It usually works, as long as you partner with companies you know provide good products or services.
7. EXCHANGE ENDORSEMENTS
This is a proven strategy for doubling your marketing reach without paying a penny. Simply team up with a local business you trust and that also targets your market. Ask the company if it’s OK if you use an endorsement of your company’s products and services. In exchange, you do the same for them. While a personal referral is ideal, a company endorsement also adds a lot of weight to your claims.
8. KEEP IN CLOSE CONTACT WITH HOT LEADS
Clients or potential clients who you see and talk to daily or weekly or even monthly are usually the ones you trust the most and who trust you the most. You’ve developed a rapport with each other and during this process you’ve established one thing that’s crucial for your business and you’ve established trust. Communicating with them regularly is a good way to continue to develop and even build on this trust.
9. REDUCE YOUR TARGET MARKET’S RISK WHEN BUYING FROM YOU
What’s your biggest concern when purchasing a product or service? Most people are worried that the product or service will not perform the way they hope. How can you prove to people that the claims you make in your marketing are true? Provide a guarantee. Also, outline clearly and carefully the value you provide and state your commitment to making sure that your product or service will not only reach but exceed their expectations.
10. MAKE CONTACTING YOU EASIER
Don’t leave it up to your clients to try to figure out how to get in touch with you. Show them how by making it easy as 1-2-3 for them. Put your website, phone number, and email address at the top of your website or marketing materials. Include a call to action, which most people forget. This means tell them to call, write or visit your website. Don’t leave it up to them because more often than not they will not make the first move.
In summary, the best way to convert your target market into leads and leads into clients is to build trust. These ten marketing strategies help form the foundation of the trust you’ll need to convince people that you aren’t just out for their credit card numbers, but that you truly and sincerely want to help their business.
Beware. If this is not truly your attitude, that you really want to help people with the product or service you provide, then you may just want to skip marketing and go straight to filing for Chapter 11 now. Why? Because although it’s true that there’s a sucker born every minute, sooner or later people are going to get hip to your song and dance and word will spread to stay away from you. In that case, all the marketing and advertising secrets in the world won’t help you.

Options’ trading is a very fast way to make money hands over fist. However it could be too risky or dangerous if you are careless and do not know what are you doing. Rather than this option in stock trading has been getting the attention they deserve from traders. There are lots of advantages that one can get from it and with your skill and right strategies; you may able to prevent risk from actually happening.

One thing about stock options is that they are cost efficient that is they are well capable of leveraging or borrowing money in order to increase returns. Another good advantage of it is that by spending less money also you can make almost the same profit. Once you are knowledgeable and have some experience, trading options can be a great way to make money.

As a beginner you should go for spread. Basically a spread is where you can purchase calls and puts. How to spread money is entirely dependent on how the market is swinging. Beside this buy only those options that don’t expire right away. It is because if it expired very quickly then you will not get the time to observe how your stock is moving.

Stock market is very risky and it needs lot of guts, especially for beginners. It takes time and experience to research the market as a whole. Many factors influence what happens in stock market everyday. Hence it’s necessary to have complete knowledge of market before making any move. By making a chart of earnings and losses you can easily figure out your areas of strong trader.

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It is nice to see that Warren Buffet, the Sage of Omaha, even had the power to halt an entire market move when he invested $5bn in Goldman Sachs.If I was sitting at my desk and was asked which bank in the world would I buy into, with any spare $5bn I happened to have lying around, I think that Goldman Sachs would be, pretty much, my first pick. The company has virtually no toxic / bad debt and has only been suffering due to its peers disappearing in a puff of smoke and the fact that even Goldman cannot conjure up money market funds in the current environment.Perhaps the difference is that Buffet had the $5bn and I do not. Whether I would have invested as much as he did in Coca Cola is another matter.Notwithstanding the intervention of Warren Buffet, the markets continue to look grim as more and more creepy crawlies are revealed as each stone is turned over. The speed of market reaction is getting increasingly extreme (especially now shorting in some very heavily weighted stock is restricted). The Dow Jones index is regularly trading in 100 to 200 point ranges in just a few minutes on no news whatsoever. The toss of a coin is not a good way to be trading the markets but you probably have as much chance of winning as following even the best strategies.We still await Congress’s approval of Hank Poulson’s Bad Bank strategy but law-makers are understandably a bit cautious of being seen to agree to such a huge increase in US government debt and its subsequent possible effect on the taxpayer. It is possible that some form of equity stake will be demanded from banks wishing to utilise the Sink Hole and this is likely to keep bank stocks weak until the small print has been checked out. That means the banks will have two stark choices, either struggle on over an indeterminate period slowly rebuilding your balance sheet (and still vulnerable to further downturns in the economy) but remain undiluted, or place a whole load of toxic debt over to the Fed but give up a big slice of equity to the state. Neither of these is exactly a good scenario for shareholders of all those Banks which, unlike Warren Buffet’s first choice, do have toxic debt.Spread betting carries a high level of risk to your funds. You can lose more than you initially invest. It may not suit all investors. Only speculate with funds that you can afford to lose. Ensure you understand the risks and seek independent financial advice if and when necessary.

If you’ve been trading stocks for some time and have never tried options, then you may want to give them a go. Stock options are more speculative but offer flexibility, diversification and control to protect your stock portfolio or create more investment income. So, here are some things you should know about options.

An option is a derivative, meaning its price is based on an underlying asset. These underlying assets can either be stocks, Indexes or ETFs. An options trade involves giving someone the “right to buy or sell” a certain stock at a certain price by a specific time. Options help the investor to purchase stock at a lower price and to gain from a stock price’s rise or fall. If you buy an option to purchase securities, then it’s called a “call” option. If the option you buy is to sell securities, then it’s a “put” option. There is also a put and call option, whereby traders purchase both calls and puts on the same stock, with agreed prices and by an agreed date. Buying an option gives you the right, but not the obligation to purchase the asset at a specific price (called the strike price).

The hardest part of options trading is understanding all the jargon. But once you understand all the technical names, you’ll soon find out that basically what you really need to know is which way you think the stock price is going to go in the near future. Once you have an idea what’s going to happen, then all you need to do is use the right option trade to profit. For instance, if you expect a stock’s price is going to increase, then you would purchase a call option on that stock.

Options are not issued by companies like stocks are. All options that exist are “written” or sold by another trader somewhere. Therefore, you are directly betting against that person if you buy an option.

For Call options, if the price of the underlying asset is below the strike price of the option then it is “out of the money,” when the price of the asset crosses above the strike price it is called, “in the money.” This too works the opposite way for Put options. The price of the option has the greatest percentage moves when it crosses from out of the money to in the money but out of the money options also have the most risk.

So if you don’t want to risk large amounts of capital, but still want to use a smaller amount of money to gain from price variations, options trading can be the answer. There are very few risks and an option buyer cannot lose more than the price of the option, the premium.

There is much more involved with trading options, but these are just some of the most basic concepts to help you get started. The bottom line, is that options trading is something that you should only try once you’ve spent some time learning about the stock market, and if you can make decisions calmly when the pressure is on. A lot of information must be learnt before an educated trading decision can be arrived at.