Trading Library

Many investors in the stock market have come to hear of the term 'yield curve'. This term actually is used to denote the relationship between the cost of borrowing or the interest rate and the time or term of maturity of a certain debt instrument in a particular currency.

Traders in the different markets closely watches the US dollar interest rates paid on US Treasury securities in varying maturities by plotting them on a graph known as the yield curve. Any movements in rates and maturities of US Treasury securities as plotted by the yield curve will impact on stock markets worldwide.

Investing in gold is simply the best alternative that you can do today if you have nothing to do with your dollars lying idly in your bank. Gold is the best commodity that you can hedge on because it will be in the upswing for a long time to come. With the severe limitations in gold production and its dwindling supply in the open market and the strong demand of emerging economies, gold is indeed becoming a rarity of sorts.

Stock market traders are of two kinds; those who go for the small boards and those who trade big boards. What I mean for small boards are those listed stocks in mines and other natural resource exploration, while those in trade big boards are the industrial and commercial sectors.

The S&P (Standard & Poor) Australian Indices group companies according to company market capitalisation and provides a market benchmark for investors. Each S&P index aims to address the need for investor and investment managers to benchmark against a portfolio characterised by sufficient size and quantity.

Australian S&P Index

  • S&P/ASX 200 Index - ASX code: XJO: The S&P/ASX 200 is comprised of the S&P/ASX 100 plus an additional 100 stocks.

GICS is an abbreviation for "Global Industry Classification Standard". It is a Standard and Poor’s/Morgan Stanley Capital International product created to standardise industry definitions. The Australian Securities Exchange (ASX) which oversees the Australian stockmarket contains 24 industry sectors unique to this country. GICS consists of 10 Sectors aggregated from 24 Industry Groups, 67 Industries, and 147 Sub-Industries currently covering over 27,000 companies globally.

I've long wondered why some companies that are listed on the Australian sharemarket have the NL suffix to their company name. What does N.L. mean? A company name must indicate the company's legal status. A proprietary company must include the word 'Proprietary' or the abbreviation 'Pty' in its name. A company must also indicate the liability of its members in its name:

  • if the liability is limited, the company name must end with the word 'Limited' or the abbreviation 'Ltd'

Stock trading beginners often wonder if they should be using technical analysis or fundamental analysis. The first question you should be asking is whether you are going to be an investor or a trader of stocks. There is a fine line between an investor and a trader.

It is surprising to note that most CFD traders trade online without having any specific trading plan with them. They do not fully comprehend the details of any CFD trading system. There are several types of trading systems available that are purely mechanical. However, there are several other systems that also rely on trader judgment which is gained over a period of time and experience in the market.

So what is the difference between a stockmarket, sharemarket and a bourse?

A friendly takeover is the opposite of a hostile takeover. A friendly takeover occurs when the offer by the bidder is accepted by the board of directors of the target company and recommended to their shareholders. The board would usually accept an offer from the bidder if the offer is beneficial to and serves the interest of the target company's shareholders.

A takeover is business jargon meaning the purchase of a company (the takeover target) by another company (the bidder or acquirer). Usually, as larger companies are usually public companies listed on a trading stock exchange, takeover also means the acquisition of these types of companies. You can have hostile takeovers, friendly takeovers and reverse takeovers.

A reverse takeover is business jargon for a private company taking over a public company. This action is usually seen as the back door strategy or technique for a private company to be floated on the stock market, bypassing the cost of time and money of a conventional IPO (Intial Public Offering - i.e. float).

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