Many investors use fundamental or technical analysis when making investment decisions, with many only using technical analysis when picking their trades. Many traders use technical indicators to spot potential trading opportunities. Technical indicators are mathematical calculations based on the price, volume, or open interest of an underlying asset. They fall into four categories: trend, momentum, volatility, and volume.

Reference [1] examined the profitability of popular technical indicators during the Covid-19 pandemic. It pointed out,

(1) The financial crisis caused by the COVID-19 pandemic offers limited TR [trading rule] excess profits relative to the buy-and-hold strategy. (2) Trs that are statistically significantly profitable for almost all asset classes during the market crash (after accounting for transaction costs) are the Bollinger Bands and trading range break-out rules. (3) This suggests that market trend and momentum, impacted by the large imbalances between supply and demand, played a significant role in price formation and trader behavior in all asset classes. (4) Combined (or composite) CSA technical trading strategies can generate profitability improvements for all asset classes and are highly effective during the market crash regime.

Therefore, overall, the findings suggest that TRs may be useful for investors during market crashes and that many markets were weak-form inefficient during the COVID- 19 market meltdown. These findings are consistent with the notion that, at such times, investors may become distressed by market trends and momentum and, consequently, shift from fundamental analysis to technical analysis. As a result, TRs and the resulting composite trading signals could play an essential role in a portfolio management strategy that seeks to preserve capital during times of distress.

In short, some, but not all, of the technical trading rules examined in the article were profitable during the pandemic.

We find it noteworthy that,

• The authors did not generalize their results to other market periods,
• They also performed a robustness test using bootstrapping simulations.

Let us know what you think in the comments below.

References

[1] Camillo Lento, and Nikola Gradojevic, The Profitability of Technical Analysis during the COVID-19 Market Meltdown, J. Risk Financial Manag. 2022, 15, 192.

Article Source Here: Technical Trading During The Pandemic

If you're looking to get into the world of day trading, you need to be aware of the Pattern Day Trader rule. This rule stipulates that in order to day trade stocks, you must have $25,000 in your account. Let's take a closer look at what this means for aspiring traders and how you can go about meeting these requirements.

What is the pattern day trader rule?

The pattern day trader rule is a regulation put in place by the U.S. Securities and Exchange Commission (SEC) in 2001. The rule stipulates that investors who make more than four day trades in a five-day period are considered pattern day traders and must maintain an account balance of at least $25,000.

The purpose of the rule is to protect investors from excessive risk-taking by limiting the number of day trades that can be made without having a significant amount of capital to back up those trades.

Why is the $25,000 requirement in place?

The $25,000 requirement is in place because day trading is a high-risk activity. By limiting the number of day trades that can be made without having a large account balance, the SEC is hoping to protect investors from blowing through their entire account on high-risk trades.

What happens if you don't meet the $25,000 requirement?

If you don't meet the $25,000 requirement, you will be limited to making three day trades in a five-day period. This limit will be placed on your account for 90 days or until you can bring your account balance up to $25,000.

How can you meet the $25,000 requirement?

The first thing to note is that the $25,000 requirement is for your account equity, not including margin. So, if you have a $30,000 account and use $5000 of it as margin, you would still need to have at least $25,000 in equity in order to day trade. This rule is in place to prevent investors from using too much leverage and taking on excessive risk.

There are a few different ways that you can meet the $25,000 equity requirement. The first is to simply deposit enough money into your account to meet the minimum. If you don't have $25,000 to deposit, you can try to day trade your way up to the minimum. This will obviously be a lot more difficult, but it is possible.

Another option is to find a broker that will allow you to trade with less than $25,000 in your account. While these brokers do exist, they are few and far between. And even if you do find one, they will likely charge you higher commissions and fees to offset the risk they're taking on by allowing you to trade with less capital.

Which brokers allow day trading with less than $25,000?

Some brokerages allow pattern day traders to use leverage to meet the $25,000 equity requirement. For example, Robinhood offers margin accounts with 0% interest and no account minimums. So, if you open a Robinhood account and deposit $2000, you could trade with $4000 in your account.

While this might sound like a good option, it's important to remember that using leverage is a risky proposition. If the stock market takes a turn for the worse, you could easily find yourself owing your broker more money than you have in your account. So, while it is possible to day trade with less than $25,000 in your account, it's not recommended.

Conclusion

The bottom line is that if you want to day trade stocks, you need to be aware of the pattern day trader rule and make sure that you have at least $25,000 in your account.

While this may seem like a lot of money, it's actually not that difficult to meet this requirement if you're dedicated to trading. And, once you do, you'll be able to take advantage of the many opportunities that day trading has to offer.

Post Source Here: Day Trading $25000 Rule, aka The Pattern Day Trader Rule

If you are looking for a credit card with a high limit, you have come to the right place. In this blog post, we will discuss how to get one and use it wisely. A credit card with a high limit can be a great asset for your business or personal finances. However, it is important to use it responsibly and make sure you don't fall into debt. We will go over some tips for using your credit card wisely and staying out of trouble. Keep reading to learn more.

What is a credit card limit?

A credit card limit is the maximum amount of money that you can charge to your credit card. Your credit card company will set this limit based on your credit history and income. The higher your limit, the more money you can spend on your credit card. This can be a great advantage if you have a large purchase to make or if you want to consolidate your debt. However, it is important to remember that you are responsible for paying back the money you spend on your credit card. If you charge more than you can afford to pay back, you will end up in debt.

How can I get a credit card with a high limit?

When you are looking for a credit card with a high limit, there are a few things to keep in mind. First, you will need to have good credit. This means that you have been paying your bills on time and managing your debt responsibly. If you don't have good credit, you may still be able to get a high-limit credit card, but it will likely have a higher interest rate. Second, you will need to decide how much credit you need. If you only need a small limit, you may be able to get by with a lower limit card. However, if you need a high limit for business expenses or large purchases, you will want to make sure you get a card with a limit that meets your needs.

Once you have decided how much credit you need, you can start shopping around for cards. There are many different options out there, so it is important to compare features and fees before you make a decision. Some things to look for include annual fees, interest rates, and rewards programs. Once you have found a few cards that meet your needs, it is time to apply. When you are applying for a credit card, the issuer will pull your credit report and score. They use this information to decide whether or not to approve you for the card. If you have good credit, you should have no problem getting approved for a high limit credit card.

Once you have been approved for a credit card, it is important to use it wisely. This means paying your bill on time and in full every month. It is also important to keep your balance low. If you carry a balance from month to month, you will be charged interest. This can add up quickly and make it difficult to pay off your debt. Finally, be sure to monitor your spending. It can be easy to overspend when you have a high limit credit card. If you find that you are using your card more than you can afford, it is time to cut back.

Conclusion

If you follow these tips, you can use your high limit credit card wisely and stay out of debt. A credit card can be a great tool for your business or personal finances. However, it is important to use it responsibly. With a little bit of planning and discipline, you can make sure your credit card works for you instead of against you. Thanks for reading and we hope this was helpful.

Article Source Here: Credit Card with a High Limit: How to Get One and Use It Wisely

When it comes to life insurance, most people think about death and taxes. But what many people don't realize is that there's a lot of money to be made in the life insurance industry. In this blog post, we will take a look at how life insurance companies make money. We'll explore the different ways that they generate revenue, and we'll discuss the benefits and drawbacks of each method. By the end of this post, you'll have a better understanding of how the life insurance industry works and why it's such an important part of our economy.

Different ways life insurance companies make money

Life insurance companies make money in a few different ways. The primary way they generate revenue is through premiums. Premiums are the monthly or yearly payments that policyholders make to keep their life insurance policies active. Insurance companies invest these premiums in a variety of ways, but the goal is always the same: to earn enough money from the investments to cover the costs of the policies, and to generate a profit.

Another way that life insurance companies make money is through investment income. When an insurance company invests premiums, it earns interest on the investments. This interest income can be used to cover the costs of the policies, or it can be reinvested in the business to help it grow.

Finally, life insurance companies also make money through policyholders who surrender their policies. Surrendering a policy means that the policyholder cancels the policy and receives a cash payout. The insurance company keeps the premiums that have been paid up until the point of surrender, minus any fees or expenses.

The life insurance industry is a vital part of our economy

The life insurance industry is a vital part of our economy. It provides peace of mind to families and individuals who are worried about what would happen if they were to die prematurely. It also helps businesses protect themselves from the financial consequences of the death of a key employee. And finally, it provides an important source of revenue for the government.

Can a life insurance company lose money?

Yes, a life insurance company can lose money. If the investments made with premiums do not perform well, or if there are more claims than expected, an insurance company can find itself in a financial bind. However, the vast majority of life insurance companies are profitable and have been for many years.

Does buying life insurance stocks make sense?

When it comes to investing in life insurance companies, there are a few things to consider. First, you need to decide if you want to invest in the stock of a specific company or in a life insurance-focused mutual fund. If you're not sure which route to take, it's always a good idea to speak with a financial advisor. Second, you need to research the companies you're considering investing in. Make sure you understand their business models and how they make money. And finally, keep in mind that the life insurance industry is a long-term investment. It's not going to make you rich quickly, but it can be a good way to generate steady growth in your portfolio.

The bottom line

In conclusion, life insurance companies make money in a few different ways. The primary way they generate revenue is through premiums. They also make money through investment income and policyholders who surrender their policies. The life insurance industry is a vital part of our economy. It provides peace of mind to families and individuals who are worried about what would happen if they were to die prematurely. It also helps businesses protect themselves from the financial consequences of the death of a key employee. And finally, it provides an important source of revenue for the government.

Originally Published Here: How Life Insurance Companies Make Money

In every country's economy, there was always some unemployment. It's only natural that when some people are out of work, others are hired to fill their place. But what about when the number of unemployed people is higher than usual? And what if it seems to happen in cycles - every few years or so? This is known as Cyclical unemployment.

In this article, we will be talking about everything you need to know about Cyclical Unemployment - its definition, causes, and effects.

What is Cyclical Unemployment

As the name suggests, cyclical unemployment is the result of the cyclical nature of the economy. It occurs when there is a lack of demand for goods and services in the economy, leading to a decrease in production and, as a result, layoffs. Cyclical unemployment is often caused by recessions, but can also be caused by other factors such as natural disasters or disruptions in the supply chain.

Cyclical unemployment is different from frictional and structural unemployment, which are not related to the business cycle. Frictional unemployment occurs when workers are in between jobs, while structural unemployment happens when there is a mismatch between the skills of workers and the needs of employers.

Almost every country experiences some cyclical unemployment, but it is more pronounced in countries with less developed economies. This is because their economies are more likely to be reliant on a single industry or sector, and thus more susceptible to swings in demand.

What causes Cyclical Unemployment

As we mentioned before, cyclical unemployment is usually caused by a recession. A recession is a period of economic decline, characterized by a decrease in GDP, an increase in unemployment, and a decline in business activity. Recessions are often caused by a combination of factors, such as a decrease in consumer spending, an increase in interest rates, or a decrease in government spending.

Other causes of cyclical unemployment can include natural disasters, such as hurricanes or earthquakes, and disruptions in the supply chain, such as an oil price shock.

Examples of Cyclical Unemployment

The most recent example of cyclical unemployment was the Great Recession of 2008-2009. This was caused by several factors, including the housing market crash and the subprime mortgage crisis. The recession led to a decrease in consumer spending and business activity, which resulted in layoffs and an increase in unemployment.

In the United States, the unemployment rate peaked at 9.8% in October 2009, before gradually declining to its current level of 3.6%. In the United Kingdom, the unemployment rate peaked at 8.4% in 2011 and is currently at an 11-year low of 4.8%.

The effects of Cyclical Unemployment

Cyclical unemployment can have several negative effects on the economy. Firstly, it can lead to a decrease in consumer spending, as people will have less money to spend if they are unemployed. This can then lead to a decrease in production and even more layoffs.

Secondly, it can cause an increase in government spending, as the government will often step in with unemployment benefits and other forms of assistance. This can lead to an increase in government debt, which can be a burden on the economy.

Finally, cyclical unemployment can lead to an increase in crime, as people may turn to criminal activity to make ends meet.

Conclusion

So there you have it. In this article, we talked about everything you need to know about Cyclical Unemployment - its definition, causes, effects, and examples. We hope that this article has helped you better understand this topic. Thank you for reading.

Post Source Here: Cyclical Unemployment: Definition, Example, Formula, Causes

Making money in the markets is a dream for many people. Whether you're interested in trading crypto or forex, there are a few essential tips and strategies that you need to know in order to be successful. In this blog post, we will discuss some of the best ways to make money trading these two asset classes. We'll also provide a few helpful tips on how to stay safe while trading online. So if you're ready to start making money in the markets, keep reading.

How to make money with day trading?

Making money with day trading requires a certain amount of skill and knowledge. The most important thing to remember when day trading is to never risk more than you can afford to lose. This may sound like common sense, but it's often overlooked by beginner traders.

Another important thing to remember is to always take your profits when you have them. It's tempting to keep riding a winning trade, but this can often lead to losses. So, if you're up on a trade, take your profits and get out.

It's also important to have a solid strategy in place before you start trading. This means knowing when to buy and sell, as well as how to manage your risks. There are a number of different strategies that you can use, so it's important to find one that works for you.

Once you have a strategy in place, the next step is to find a good broker. A good broker will provide you with the tools and resources you need to be successful. They will also offer you competitive prices and low commissions.

Finally, it's important to stay disciplined when trading. This means following your strategy and not letting emotions get in the way. If you do this, you'll be well on your way to making money in the markets.

How to day trade crypto?

Crypto day trading is a little different than forex day trading. One of the biggest differences is that there are more risks involved. This is because the crypto market is still relatively new and unregulated.

Another difference is that you'll need to find a good exchange to trade on. This is because not all exchanges offer the same coins. So, it's important to find an exchange that offers the coins you're interested in trading.

Another thing to keep in mind when day trading crypto is that the market is highly volatile. This means that prices can change quickly and dramatically. This can be both good and bad. It's good because you can make a lot of money if you're on the right side of a trade. However, it's also bad because you can lose a lot of money if you're on the wrong side of a trade.

So, how do you day trade crypto?

The first step is to find a good exchange. As we mentioned, not all exchanges offer the same coins. So, it's important to find an exchange that offers the coins you're interested in trading.

Once you've found a good exchange, the next step is to find a good broker. A good broker will provide you with the tools and resources you need to be successful. They will also offer you competitive prices and low commissions.

How to day trade forex?

Forex day trading is similar to crypto day trading but there are a few key differences. One of the biggest differences is that the forex market is much more regulated than the crypto market. This means that there is less risk involved.

Another difference is that you'll need to find a good broker. A good broker will provide you with the tools and resources you need to be successful. They will also offer you competitive prices and low commissions.

So, how do you day trade forex?

The first step is to find a good broker. A good broker will provide you with the tools and resources you need to be successful. They will also offer you competitive prices and low commissions.

Once you've found a good broker, the next step is to find a good strategy. There are a number of different strategies that you can use, so it's important to find one that works for you.

The bottom line

So, there you have it. These are a few tips and strategies for day trading crypto and forex. If you follow these tips, you'll be well on your way to making money in the markets. Thanks for reading and good luck.

Originally Published Here: Day Trading Crypto and Forex

Are you planning a big trip for the next year? If so, you need to make sure that you have travel insurance. This is one of the most important things that you can do to protect yourself while on vacation. Travel insurance will help to cover your costs if something goes wrong while you are away from home. It can also help to get you out of a difficult situation if something happens. In this blog post, we will discuss the benefits of 1-year travel insurance and why it is the best way to protect yourself while traveling.

The best type of insurance for a long trip

There are many different types of travel insurance, but the best type of insurance for a long trip is definitely a policy that covers you for an entire year. This way, you will be protected no matter what happens during your trip. If you get sick or injured, your travel insurance will cover your medical expenses. If you lose your luggage or have to cancel your trip, you will be reimbursed for your costs. Travel insurance is a must-have for anyone who is planning a long trip.

A lot of people think that travel insurance is unnecessary, but this could not be further from the truth. If something goes wrong while you are on vacation, it can cost you a lot of money. Medical expenses lost luggage, and cancellations can all be very expensive. Travel insurance will help to protect you from these costs.

If you are planning a long trip, make sure that you buy travel insurance. It is the best way to protect yourself from unexpected costs. Be sure to read the policy carefully before you buy so that you know what is covered. This way, you will be able to make an informed decision about whether or not it is right for you.

Who to buy travel insurance from?

There are many different companies that sell travel insurance. It is important to do some research before you purchase a policy so that you can find the best deal. You should also make sure that you buy from a reputable company. There are many scams out there, so you need to be careful. Be sure to read the reviews of any company that you are considering buying from.

Can travel insurance be refunded?

Yes, in most cases, you can get a refund on your travel insurance if you cancel your trip. However, there are usually some conditions that apply. For example, you may only be able to get a refund if you cancel your trip more than 30 days before your departure date. Be sure to read the policy carefully so that you know what the conditions are.

Bottom line

Travel insurance is the best way to protect yourself from unexpected costs while on vacation. Be sure to buy a policy that covers you for an entire year. Do some research to find the best deal, and make sure that you buy from a reputable company. If you need to cancel your trip, you can usually get a refund on your travel insurance. We hope that this blog post has been helpful.

Post Source Here: 1-Year Travel Insurance: The Best Way to Protect Yourself on Vacation

What is Beta?

Beta is a term used to quantify the systematic risk of a security or investment portfolio. It calculates that risk relative to the market. Since systematic risk is a type of uncertainty revolving around a market, it can be critical to some investments. Beta quantifies the correlation between the returns from securities and any fluctuations in that risk.

Essentially, beta measures the volatility of an investment relative to the systematic risk in that market. The beta coefficient quantifies that correlation through regression analysis. Investors can use this metric as a part of the Capital Asset Pricing Model (CAPM). However, they may also divide it into two types, including levered and unlevered beta.

What is the Unlevered Beta?

Unlevered beta, also known as asset beta, does not consider the impact of debt over volatility. It does not include financial leverage when considering its market risk for a company. Unlevered beta removes any impact debt can have on a company's returns. Consequently, it isolates risk to its assets only.

Unlevered beta only considers assets when calculating the systematic risk of a company. It removes any effects of leverage and debt from the capital structure. Therefore, it allows investors to assess the business risk of that company without including debt. Usually, unlevered beta is lower than a company's overall beta. Investors can use the following formula to calculate it.

Unlevered beta = Beta / [1 + (1 - Tax rate) (Debt / Equity)]

What is Levered Beta?

Levered beta considers a company's systematic risk while including equity and debt. Also known as the equity beta, levered beta is crucial in measuring volatility. Essentially, levered beta allows investors to consider the impact of a company's capital structure while measuring risk. The higher the debt/equity ratio of that company, the lower its levered beta will be.

The levered beta allows investors to calculate the risk of holding a stock. Its calculation considers the impact of the capital structure of the underlying company. Similarly, CAPM usually also requires the levered beta. Calculating levered beta entails reversing the removal of the effect of debt. Its formula is as below.

Levered beta = Unlevered beta x [1 + (1 - Tax rate) (Debt / Equity)]

What is Debt Beta?

Debt beta is a metric used to gauge the systematic risk of debt returns. It is similar to equity beta but uses returns generated from debts instead. Although debt beta is a crucial component of the systematic risk calculation, it is insignificant in value. Debt beta increases due as gearing levels rise. It also contributes to equity and asset beta.

When calculating unlevered beta, the debt beta is considered to be zero. However, it may result in the understatement of the unlevered beta. Debt beta comes from the Equity Market Risk Premium (EMRP) and the risk-free rate of return (credit spread). EMRP refers to the excess returns an investment provides over the risk-free rate. In that case, the formula for debt beta is as follows.

Debt beta = Credit spread / Equity market risk premium

Conclusion

Beta is a measure of the systematic risk of an investment compared to the market. It comes in several forms, including unlevered and unlevered beta. The primary difference between the two is whether they consider the impact of debt on the capital structure. These calculations also require estimating debt beta, which measures the systematic risk for debt returns.

Originally Published Here: Debt Beta: Formula, Calculation, vs Equity Beta

Making money in the stock market is no easy task. It takes a lot of research, hard work, and patience. However, with the right information and tools, it can be done. In this blog post, we will discuss the best stocks to day trade today. We will provide you with a list of stocks that are trending up, as well as some tips on how to make money trading them. So if you're looking to make some profits today, read on.

What's day trading?

Day trading is the practice of buying and selling a security within the same day. Traders who day trade are looking to take advantage of small, short-term price changes in a stock.

There are many reasons why people choose to trade stocks. For some, it's a way to make money outside of their day job. Others view it as a hobby or a way to make some extra income. Whatever the reason, stock trading can be a very profitable venture.

What are the best stocks to day trade today?

There are many factors that go into finding the best stocks to day trade. However, some of the most important factors include a stock's price, volume, and volatility.

When it comes to finding the best stocks to day trade, there are many resources available. However, one of the best resources is the Stock Screener tool on FINVIZ. This tool allows you to filter stocks by various criteria, including price, volume, and volatility.

Some of the best stocks to day trade today include:

• Apple (AAPL)
• Amazon (AMZN)
• Google (GOOGL)
• Facebook (FB)
• Microsoft (MSFT)

These are just a few examples of stocks that are currently trending up and are worth watching. For a complete list of stocks, be sure to check out the Stock Screener on FINVIZ.

Tips for making money day trading

Now that you know some of the best stocks to day trade, it's time to discuss some tips on how to make money trading them.

One of the most important things to remember when day trading is to always use stop-loss orders. A stop-loss order is an order that you place with your broker to sell a security if it reaches a certain price. This price is typically below the current market price.

For example, let's say you buy Apple stock for $100 per share. You may want to place a stop-loss order at $95 per share. This means that if the stock price falls to $95, your broker will automatically sell the shares.

Stop-loss orders are important because they help you limit your losses in a security. Without a stop-loss order, you could lose a lot of money if a stock price suddenly drops.

Another important tip for making money day trading is to always use limit orders. A limit order is an order that you place with your broker to buy or sell a security at a specific price.

For example, let's say you want to buy Apple stock for $100 per share. You would place a limit order to buy the shares at $100. This means that your broker will only buy the shares if they are available at $100 or less.

Limit orders are important because they help you control your losses and protect your profits. Without a limit order, you could miss out on a big move in a stock price.

Finally, it's important to remember that day trading is a risky venture. It's important to always use risk management strategies, such as stop-loss and limit orders, to protect your capital.

While there is no guarantee of success in the stock market, following these tips can help you increase your chances of making money day trading.

Conclusion

Day trading can be a very profitable venture. However, it's important to remember that it's also a risky activity.  To increase your chances of making money, be sure to use stop-loss and limit orders when trading stocks. Additionally, always remember to use risk management strategies to protect your capital.  Following these tips can help you become a successful day trader. Happy trading.

Article Source Here: Stocks for Day Trading

Black-Scholes-Merton (BSM) is an option pricing model for valuing European options. It was developed in the 1970s by Fisher Black, Myron Scholes, and Robert Merton, who were awarded the Nobel Prize in Economic Sciences in 1997 for their work. The BSM model has become one of the most widely accepted pricing models for options and is used by both quantitative analysts and traders to determine the fair value of options.

The BSM model relies on several assumptions about the underlying stock price and its volatility, as well as the option holder's risk preferences. Over the years, several advanced models have been developed to address the issue of constant volatility by using stochastic volatility models. Very few models, however, take into account the liquidity of the underlying assets, which can have a significant impact on option prices.

Reference [1] tackled the issue of liquidity in option pricing. It does so by using a mean-reverting stochastic process to describe market-wide liquidity,

This article addresses the problem of pricing European options when the underlying asset is not perfectly liquid. A liquidity discounting factor as a function of market-wide liquidity governed by a mean-reverting stochastic process and the sensitivity of the underlying price to market-wide liquidity is firstly introduced, so that the impact of liquidity on the underlying asset can be captured by the option pricing model. The characteristic function is analytically worked out using the Feynman–Kac theorem and a closed-form pricing formula for European options is successfully derived thereafter. Through numerical experiments, the accuracy of the newly derived formula is verified, and the significance of incorporating liquidity risk into option pricing is demonstrated.

In short, a closed-form formula was developed for pricing European options in which liquidity plays a role as a discounting factor.

This article provides a formal proof that liquidity has an effect on options price. We note that practitioners have been using a “volatility haircut” for a long time in order to incorporate liquidity into the pricing of complex financial instruments. It’d be interesting to see a formal link between the volatility haircut and liquidity.

References

[1] Puneet Pasricha, Song‑Ping Zhu, and Xin‑Jiang He, A closed‑form pricing formula for European options in an illiquid asset market, Financial Innovation (2022) 8:30

Post Source Here: Option Pricing Model in Illiquid Markets