Buy the Rumor, Sell the News Explained with Examples
The adage "buy the rumor, sell the news" is a contrarian trading strategy predicated on anticipating market reactions to rumors and news announcements.
A Traders Guide to the Short Sale Rule (SSR)/Uptick Rule
When a stock's price declines significantly, the Short Sale Rule triggers a temporary restriction that prevents investors from shorting the stock unless the price is above the current highest bid.
Investors Guide to the PEG Ratio & Finding High Growth Stocks
The Price/Earnings to Growth (PEG) ratio helps investors find growth at a reasonable price. The PEG ratio is an incredibly valuable metric calculated by dividing the Price-to-Earnings (P/E) ratio by the company's earnings growth rate.
Trading the Santa Claus Rally Based on 31 Years of Data...
Based on our data analysis, the Santa Rally phenomenon is indeed observable. Our findings indicate average stock price rises of 1.74% in October, 2.40% in November, and 0.56% in December.
LiberatedStockTrader’s Guide to Trading Parabolic Stocks
Parabolic stock price movements can result from strong financial performance, product innovations, or sector-wide euphoria. Traders gravitate towards these stocks as they can provide significant returns quickly but bear considerable risk due to potential volatility reversals.
Investors Guide to the Dividend Payout Ratio & Sustainability
The payout ratio is expressed as a percentage of the company's total earnings, reflecting the proportion allocated to dividend payments instead of being reinvested in the business or used for other purposes.
The Impact of Price Floors & Ceilings on Market Equilibrium
A price floor is a government-imposed limit on how low a price can be charged for a product, service, or commodity. This is designed to ensure the price stays high enough to protect the interests of producers, often at a point above the natural market equilibrium where supply equals demand.
Investors Guide to the Times Interest Earned Ratio
The Times Interest Earned Ratio assesses the number of times a company could cover its interest payments with its current pretax earnings. It offers a clear view of financial health, particularly regarding solvency and risk.
Traders Guide to Identify, Trade & Profit From a Stock Rally
A stock market rally is a sustained rise in equity price trends, typically characterized by positive investor sentiment and strong buying activity, which pushes share prices higher.
What Does Over-Leveraged in Finance & Investing Mean?
Over-leverage is using excessive debt to finance investments or business operations, leading to excessive risk. Financial risk increases as the level of debt exceeds the ability to generate sufficient returns to cover the interest payments and principal repayment obligations.
Avoiding Freeriding & Good Faith Violations in Stocks
Freeriding refers to an investor buying and then selling securities in a cash account without having the necessary settled funds to cover the purchase. This action violates regulations set forth by governing financial bodies and can lead to a freeze on the investor's ability to trade.
Investors Guide to the Fixed Charge Coverage Ratio (FCCR)
FCCR is a financial metric determining how well a business can cover its fixed charges with its operating income. It is calculated by dividing Earnings Before Interest and Taxes (EBIT) by fixed charges. Fixed charges typically include expenses such as interest expense and lease payments.
An Investors Guide to Dupont Analysis with Examples & Formulas
By breaking down ROE into profitability, efficiency, and leverage factors, DuPont Analysis allows investors and analysts to pinpoint the strengths and weaknesses in a firm's financial health.
A Practical Investors Guide to Return on Common Equity (ROE)
Return on Common Stockholder's Equity (ROCE) is a financial ratio measuring the profitability relative to the common equity shareholders have invested in a company.
An Investors Guide to Operating Profit Margin with Examples
Operating Profit Margin, often represented as a ratio or percentage, reflects the proportion of revenue after accounting for the costs and expenses associated with a company's primary operations.
Investors Guide to Return on Average Equity (ROAE)
Return on Average Equity (ROAE) is a financial performance metric that indicates how effectively a company generates profit relative to its average shareholders' equity.
Investment Turnover for Investors: Examples & Calculation
Investment turnover is calculated by comparing a business's revenue to the sum of its equity and debt, providing insight into the company's management's ability to deploy its financial resources.
Investors Guide to the Long-Term Debt Ratio
The Long-term debt ratio is a financial metric investors use to assess a company's use of long-term debt for financing its operations. A high long-term debt ratio over 25% indicates a higher investing risk, whereas a low ratio indicates a company is in better financial shape.
Investors Guide to the Net Profit Ratio with Examples & Calculations
The Net Profit Ratio is a key financial ratio for better investing, telling us how efficiently a company generates profit compared to its revenue and competitors.
Investor Guide to Return on Capital Employed (ROCE) Formulas & Examples
By allowing investors and analysts to measure the returns a company generates from its employed capital, ROCE serves as a magnifying glass over the business's operational effectiveness.