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Investing

Do you ever just “know” something’s right?

Investors in different walks of life will often tell you the same thing; there are times when they just have a gut feeling that something is right. If you’ve been investing in any way for a while, you may know this feeling yourself. It can be as simple as having bought a good home at the right price.

For investors who trade a lot, buying stocks and shares, for example, this gut feeling is usually also based on sound fundamental analysis and in-depth knowledge of a business sector and/or of a company’s balance sheet etc.

For other investors, this may be based more on what is called “technical analysis” or charting. This involved looking at patterns of share prices and other investments to predict where the price is likely to go to from any particular point in time.

When your gut feeling marries up well with your own detailed analysis – it’s often a good time to strike. One of the best ways to do this to leverage up your gains is via CFDs (“contracts for difference”). There’s plenty information around the web on CFDs – but they’re basically leveraged products that allow you to speculate on the margin prices of underlying investments. With a share, for example, you’re speculating that it will go up or down and investing a relatively small amount on the marginal differences in price. In this way, your gains or losses become magnified for a smaller outlay in cash than buying the underlying investment itself.

If this sounds at all complicated, don’t worry – it isn’t. The best platforms have plenty information to help you understand CFDs and enable you to trade in demo mode with no real cash involved. Trading with Tradefair CFDs, for example, is excellent as there are many different tools to help with your analysis and you can trade in demo mode only to your heart’s content. Tradefair is owned by Betfair and the same broad principles apply – in that you aren’t trading against the “house” in anyway.

The main thing to do is to get to understand the products and the markets in which you’re dealing in as much detail as you possibly can. The great thing about trading, then, in demo mode is of course that there is no real risk attached. Hopefully, this will give you a good indication of how much you can win or lose by trading CFDs. Using the site will also help you understand different ways to limit your potential exposure if markets go against you. This happens to all traders from time to time – so the trick is having tools in place that enable you to sleep well at night. The Tradefair site includes lots of information on the risk management side of things. But with any luck – you won’t need it!

Perhaps the best advice overall is not to over-trade. Early success is always dangerous in this regard – so try to learn to trade only when everything from your analysis falls into place – and your gut feeling tells you it’s the right thing to do.

Investing

How to Invest in Property without Money

Invest in PropertyProperty investment has always been considered auspicious in India. Upper middleclass and middleclass families usually prefer to buy flats and land in their hometowns as a part of their retirement package or as an investment option in case of extra income. As the Indian economy improves, investment in real estate has seen a steady surge, increasing from 25 percent to about 45 percent in 2013. However, times have changed. Earlier, the bulk of investors were from the commercial sector with a small minority of first-time property owners forming the rest. Now, property purchases are rapidly taking the form of investments with buyers seeking to profit rapidly from purchases in the form of rents or immediate flips. For commercial and private buyers, the market is great with several new projects located in upcoming second-tier towns all over the country. What has changed is the actual investment process, states Real Estate In Your Twenties. Formerly, buyers preferred to take loans to buy their properties for themselves, but now, commercial and private buyers prefer to invest in property without using their own money.

Why?

Buying Indian property is subject to several rules, states Invest Four More. For example, the most commonly quoted rule by the Reserve Bank of India states that property loans will pay for up to 80 percent of the property price. The buyer has to pony up the rest in the form of an advance to ensure financial fluidity. However, now buyers invest in property as a hold option. They wait for the property to appreciate in value and then resell it again at a profit. In this case, they do not want to shell out 20 percent of the cost price as it leads to an upfront payment. Buyers have found ways to circumvent this upfront payment process and they use ‘no-upfront-payment’ deals to finance their property purchases. If you are new to the property investment market, here are a few ways by which you can buy property by not investing money up front.

Use the Equity You Already Have in Your Own Home

As a property owner, you already own your home outright. In this case, you may have paid a fraction of the loan and you own that much of your property. You can leverage this equity of take a loan on your existing property to buy your new home. Once this loan is approved, you can use this money to pay the 20 percent upfront for the new property, renovate it, and then flip it to resell it to a new seller for a profit. The best way to make this work is by flipping or reselling the property as soon as possible.

Buy From Friends and Family

Distress sales are very common in India. Families or people who want to relocate or want immediate cash are more than willing to sell their property at an affordable rate. For example, if the property is priced at about Rs 22, 00,000, you can negotiate a lower price of Rs 19, 00,000. Instead of paying cash for the deal, immediately look for another buyer while renovating the home. Then resell the property for a higher rate of Rs 25, 00,000. You get an immediate profit of Rs 5, 00,000 and there is no need to pay anything upfront as well. You can even choose to rent the property. The renter will pay a 20 percent security deposit on the lease and you can use this payment as an advance. The remaining payment can be financed as a mortgage as a lease.

Rent to Buy Options

This option works very well if you are planning to buy a rented property, states Legalzoom. Under the terms of this lease/buy option agreement, the buyer and seller can negotiate an amount that has to be paid at regular intervals as a form of payment for the property. This agreement allows the leaser to stay in the property while gradually purchasing the property over a period of time. Usually, a portion of the payments is credited towards the purchase price while the remainder acts as a rental payment for residency rights.

As you can see, it is easy to buy properties with no money up front. A word of caution, though: you should try this method of property investment only if you are well versed with the Indian property market. Be very cautious while choosing the property for investment. For example, reliable builders like the Unitech Group Properties are well known for their strict adherence to building schedules and you will get your property on time. However, if you invest with an unknown builder, there is a chance that the deal will fall through due to various reasons, leaving you stuck with the bills. Research the loan process, the lenders, the property you are buying, and flip the property as quickly as possible to ensure you are protected.

Investing

Binary Options: Money saved through lesser liquidity requirements

Except for a job, doing any business or investment venture requires that you maintain working capital. In a job you don’t have to set up a supply chain, pressure debtors to pay full and quick, or think of delaying tactics when paying creditors. However, when you are doing any business, you need to maintain cash or bank to continuously fund running core operations until a profit is attained. Insufficient funds just halt to a grinding stop any business.

In the same manner as any business, trading derivatives also requires maintenance of “working capital”. This is particularly the case in trading regular options. Whenever a trade starts to go bad, you have to make good the margin calls to avoid closure of your position in a loss. Even so, you never know for how long or deep the loss position will go on. And until you find an amicable position, you need to keep funds at the ready. In regular options trading, you decide at the inception of any trading account the leverage you wish to use. The higher leverage you use, the greater will be your funding requirements in case of an ongoing loss.

Trading binary options would also require one to keep his funds at the ready. However, the requirement is never as intensive as it is in regular options trading. You do not have to worry about margin funding once you run a loss; when you run a loss, it’s a loss. You do not have to maintain liquidity for margin funding. In this aspect, binary options save you money inherently. For example, unlike regular options trading, if trades get deeply out of the money, traders borrow from the broker or banks at very high interest rates to remain liquid.

So what exactly do you need the working capital fund in binary trading? The answer is, to make more trades. You have to remain liquid enough to make trades whenever you see the “technicals” on your interface blinking an opportunity. If a 10 minute binary option leads you to a loss, it does not matter. If the loss is a one way slide, make another trade with the funds available and may be use a shorter trade time frame. This way you can always recover your losses quickly and save your money.

Consider a situation in regular options trading. You make a loss by big margin, that leads to a margin call. You have no other way but to close you position with a higher amount of loss then your original investment. You have to start over again to recover all those losses, “capital plus what you lost in margin call”. Now if this was a binary options trade, your position would have expired in a short period leaving you a loss of your invested capital. However, you minimize your loss and save money quicker, by making another trade considering the market slide; there is no requirement to recover “capital plus loss in margin call”.

Therefore, it is comfortably proved that operating a binary options trading portfolio, practically requires minimum liquidity maintenance, and hence save you quite a lot of money.

Investing

All you wanted to know about binary option trading withdrawal procedure

Binary option trading is easy and a simple way of earning profits within a very short time span and also by investing a low amount. But as a trader you are required to make minimum initial deposits and also withdraw the returns and profits that you have earned in a trade. This is a procedure very few traders are actually well versed in. So, we will address this topic in this article so that you have a better idea about the manner in which you can withdraw funds from the binary option trading account that you have opened with a trading platform or a binary option broker. So, read on for more information.

Easy and secured

If you are planning to withdraw funds from your trading account, it is a simple process. When you visit the website of the trading platform you have opted for, you have to look for the withdrawal box, which is present on the main page and rarely, there are websites that will require you to navigate to another web page of the website when you want to withdraw your binary option trading funds. All you have to do is select the amount that you intend to withdraw. Remember, it will essentially be currency based and you have to choose your currency.

Essential features of fund withdrawal in binary trading

Although the process takes less than even a minute, there are few important aspects that you need to know pertaining to withdrawal or deposit of funds when you are associated with a trading platform. These include the following-

ü  If you are withdrawing binary option trading funds for the first time, you will have to furnish your proof of identity. This is usually done so that there is no other individual or prospective trader that uses your name for fund withdrawal. This process makes your transactions secured and reduces the chances of fraudulence. As far as documents that you can furnish to prove your identity include recent utility bill that is in your name, photo identification, valid passport. Alternatively, you can also provide details of your credit card bills as identity proof.

ü  Time limits apply when you withdraw your funds from the binary option trading account. While wire transfers and bank transfers take longer, you can opt for E-wallets, debit as well as credit cards for withdrawing your profit funds. Also the time taken for accessing your funds will depend on the mode of withdrawal that you go for. The time limit for the fund withdrawal will vary from one trading platform to another. Also do not forget to take into account the processing fee of the broker.

ü  You will be required to shell out the so called withdrawal fees when you want to avail the returns from binary option trading that you have earned. This fee also differs from one broker to another and also on the mode of withdrawal of funds that you have opted for.

Regardless of the trading platform you have opted for, it is best to find out the details about deposit as well as withdrawal even before you sign up for the services of a binary option trading broker. In this way, you know what you can expect. 

Investing

Why buy stocks when you can trade stock options?

Many of us would jump at the chance of buying stocks in a company, be it one that is already successful or one that you know is going to be successful. However, for many the dream of been a stakeholder dies as soon as the stock price is quoted! You see, buying stocks is not cheap, or maybe I should say buying enough stocks to make a return on your investment is not cheap.

As I write this article, the current price of buying a share in Facebook is $24.31, this is not a lot of money by a long stretch of the imagination but I would need to buy at least 100 shares to see any kind of significant return – and there is no guarantee that I will see a return. However, there is another way that I can invest in Facebook stocks without having to pay thousands of dollars for shares, and a way that I can profit regardless if the share prices rise or fall. How you might ask, and I would answer by buying stock options, not stocks!

So what is the difference between Stocks & Stock options?

Stock options are the derivatives of stocks, deriving their value from the movements of the actual physical stocks. The main difference between the two is ownership, when you buy stocks you have an equity stake in the company but when you buy stock options you have no ownership in the company, you simply have the right to buy or sell the option.

Stock options are limited by time; purchased as contracts they are valid until a given date. Buying or selling is possible until that date, but after the date passes, the option contract expires.

The advantages of stock options:

The main advantages of stock options over stocks are accessibility, price, and profitability. Stock options can be purchased at a fraction of the price that you would pay for a stock, and you can profit from your stock option in both rising and falling markets – so it is a win, win situation. In addition, the return you get from trading stock options is far greater; you can make returns of up to 71% or more stock option trading with anyoption.com or other such binary option brokers.

Stock option trading:

Getting started in stock option trading is straightforward, it does not require you to be present on a trading floor, nor does it even require that you even have knowledge of trading, or markets. All you need is an option broker and a little capital to invest – the amount needed will depend on the broker that you are using.

There is no shortage of online trading brokers; websites that allow you to set-up and account and trade assets from different stock exchanges around the world. They all require a minimum deposit before you can trade for some it can be a couple of hundred dollars other you can deposit as little as $20 dollars to get started.

The trading process itself is very easy: E.G, if you think that the price of Facebook’s stock is going to increase then you take what is known as a “Call” option, if you think that it will decrease then you place a “Put” option, if your predication is correct you can make high profits. However, if your predication is wrong then you stand to lose all of your initial investment.

Just to wrap this up!

So there you have it, if you have an interest in stock market trading but do not have the capital to buy physical shares in a company you should consider the alternative of buying stock options, you really can make considerable profit with this form of investment. However, keep in mind that you can also lose money but that is just the nature of the beast when it comes to investing and stock market trading.