Q. What about Covered Warrants? I am really considering buying a small amount in one which I am quite confident will reach its target by the deadline but before buying in, I want to make sure I properly understood the risk...
Latest Posts
Using Options as a Hedging Tool
Q. What about Options? A: Ok, Options huh? Let’s start with the basics – An option gives you the right, but not the obligation, to buy or sell a security at a fixed price on a specified date. A call option gives...
How Does Spread Betting Compare to Direct Market Access?
Q. How do spreadbets and DMA compare to each other? A: With a spread bet you never physically buy or sell an instrument (i.e. a share in Barclays or gold bullion), you simply bet on the direction in which you think the instrument...
Spread Betting Versus CFDs
Q. Are CFDs and Spread Betting the same thing? A: They are nearly the same with some differences. In fact there are many similarities between CFDs and spread bets. Importantly, they are both margined products, offering...
Spread Betting on Interest Rates
Q. How does one bet on interest rates? A: Lately, with concerns on the economy and financial turmoil in particular interest rates have been steadily falling but this can quickly change if there are worries over inflation...
LIBOR and the Bank of England
Q. What is the difference between the Bank of England rate and LIBOR? A: The Bank of England base rate serves as a critical benchmark for lending in the UK financial system. It is the rate at which the Bank of England offers...
Depository Receipts and Index Linked Gilts
Q. What is a Depositary Receipt? A: Global Depositary Receipts (GDRs) and American Depositary Receipts (ADRs) consist of negotiable certificates issued by big investment houses (banks) which represent ownership of a set...
Bonds and Credit Ratings
Q. What about Bonds? A: I’m not responding this myself, rather I’m quoting a reply from an experienced trader -: Bonds are fixed income, and fixed capital as the interest payments are known in advance. This means...
Rights Issues and Stock Suspensions
Q. Should I take up a rights issue? A: It is important to understand that you don’t have to cough up and buy new shares, unless you want to. However, it is a shareholder’s right that they get asked before non...
Stock Splits and Consolidations
Q. And what happens if a stock splits? Is this reflected in your position? A: A stock split is a means of changing the structure of the shareholdings in a company. It has no effect on the market capitalisation of the company...