Glancing through the financial newspapers, magazines and other publications related to investing and trading, you noticed large advertisements of success stories of people becoming millionaires through trading options. You start to ponder for a few seconds and think whether is it for real? The term “option” seems so foreign to you but yet it seems so familiar at the same time. You know you have heard of this term before but you just could not recall where, as you are too preoccupied with the things you are doing. One thing to be certain, the advertisements mentioning these type of financial instruments, are definitely becoming more and more common in the financial publications. You know you definitely have to find out more. Who doesn’t like to have more options to make decisions on what to invest in when it comes to diversification of your own portfolio?

Welcome to the world of derivatives. Options is just one type of derivative. The term “derivative” means that each kind of financial instruments classified under its category, do not have intrinsic value of their own. Read the rest of this entry »

Many people struggles with the ideas of buying and selling options, although it is not a really difficult subjects to understand, it does requires more efforts to understand the subject thoroughly. It is therefore my objective that you can understand this wonderful financial instruments well and use it to your benefits.

The basic of trading in options, you must understand that when you buy an option, you have the rights to something from someone but when you sell an options you now no longer have the rights but now you are under obligation to deliver something to someone. Read the rest of this entry »

In economics, hot money refers to funds which flow into a country to take advantage of a favourable interest rate, and therefore obtain higher returns. They influence the balance of payments and strengthen the exchange rate of the recipient country while weakening the currency of the country losing the money. These funds are held in currency markets by speculators as opposed to national banks or domestic investors. As such, they are highly volatile and will be shifted to another foreign exchange market when relative interest rates make this more profitable. Read the rest of this entry »

Then we have world-wise bankers that created investment vehicles out of risky investments to remove the investments from the bank ledgers. Unfortunately, this strategy only conceals the risk for a time. When money stops flowing and sales stop, the game is up. Can you imagine having a license to steal and the guarantee that you will be bailed out by the government? There is little incentive for honesty or accountability when you are going to be bailed out with funding from the Federal Reserve and the taxpayers of the United States.
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There’s a clich that prostitution is perhaps the oldest profession on earth. If prostitution was the first profession, banking was a close second. 4,000 years ago temples served as banks. Money was stored in form of compressed gold plates. People though temples would be the safest place to store their money, because they were well built and considered sacred. There are even archaeological signs dating back to 1800 BC of temple priests giving loans to local merchants.
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If your credit score is good, you’ll know it. Pre-approved credit offers will be stuffed in your mailbox every day, and banks will likely bend over backwards to offer you the lowest rates on all types of loans. However, if your credit score is low or non-existent, you’ll be trapped in a world where loans are hard to come by and the rates and fees on loans you are able to get will be very costly. This can potentially add up to hundreds of thousands of dollars over a lifetime, all because of a three digit score that is calculated by a computer program. And to make matters worse, many employers and insurance companies are also using credit scores as a factor in making employment decisions and pricing insurance rates. So there is more risk at stake by having a bad credit score than just higher interest on loans. A low credit score can affect your life in many ways you might have never even imagined!
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