Investing for Beginners

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What Is the Maximum Loss That Could Occur for a Purchaser of a Call Option?

Options are derivative products that allow investors to leverage a high level of stock without having to come up with a large amount of capital and actually purchase the stock itself. Purchasers of call options can take advantage of stock moves without an equal amount of risk, ...

How to Save for College With Pre-tax Dollars

It's usually no problem finding a tax-advantaged college savings program that lets you save with after-tax dollars. The popular Section 529 plans, Coverdell education savings accounts and life insurance cash values all compound tax-free when used for qualified higher education ...

The Difference Between Options, Futures and Forwards

Futures, forwards and options are contracts that allow traders to control a set amount of underlying assets. Futures and forwards are similar with differences mostly involving standardization and margin requirement. Options differ from futures in terms of pricing, size, ...

How to Find Out What Percentage of Your Portfolio Each Stock Makes Up?

It's often useful to know what fraction of your investments are in a particular stock. Fortunately, this is relatively easy to compute based on the current value of the stocks that you own, which you can look up online or get from your brokerage.

Risk & Return on Mutual Funds

Mutual funds attempt to lower the risks associated with investment through diversification. Even if one or two of the fund's holdings crash completely, the fund itself will not flat line and can still even generate a profit. However, mutual funds are not immune to risk. It is ...

Market Value vs. Market Capitalization

Market value represents the stock price of a publicly traded company. It changes frequently based on the number of shares bought and sold by investors. Market capitalization is a broader illustration of a company's value, and it changes in part based on market value. Investors ...

How to Give a Grandchild a Savings Bond

Buying your grandchild a U.S. saving bond is considered a safe investment because it is guaranteed by the government of the United States. Savings bonds also are advantageous because you don't have to pay local and state taxes on any interest earned. Before Jan. 1, 2012, it was ...

What Happens to Stocks When One Public Company Buys Another?

A company can buy another with stock, cash or a mix of the two. If cash is involved, you may owe tax on any gains. Either way, the shares in your brokerage account will ultimately be replaced with whatever the purchasing company agreed to trade for them.

Sell Volume Vs. Buy Volume Stocks

Understanding the difference between buy and sell volume can help you better understand how to create an effective trading strategy that meets your own personal needs. Buy and sell volumes are important indicators that can provide you with a wealth of insight into pending market ...

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