What Is the January Effect?

The January effect is the tendency for stock prices to rise during the month of January. This phenomenon was first identified in the early 1900s, and has been observed in markets around the world. There are a number of theories as to why the January effect exists, but the most commonly cited reason is that … Read more

Mandatorily Redeemable Shares Definition.

Mandatorily redeemable shares are a type of equity security that gives the holder the right to require the issuer to redeem the shares for cash, at a predetermined price, at specified intervals. The price is typically set at a premium to the current market price of the shares. Mandatorily redeemable shares are often used by … Read more

What Is to Scale Out?

“To scale out” is a term used in stock trading that refers to the act of selling part of your position in a stock after it has risen in value. For example, if you buy a stock for $10 and it rises to $20, you may choose to scale out by selling half of your … Read more

Dutch Auction Definition.

A Dutch auction is a type of auction in which the auctioneer begins with a high asking price which is progressively lowered until a bidder accepts the current price. The term “Dutch auction” is often used in the financial world, especially in the context of bond sales. In a Dutch auction bond sale, the issuer … Read more

Liar’s Poker Definition.

Liar’s poker is a game that is often used to teach people about investing in stocks and other securities. The game is played with a deck of cards, and each player is dealt a hand of five cards. The object of the game is to correctly guess the value of the other players’ hands, and … Read more

Blue Chip Meaning and Examples.

A blue chip is a nationally recognized, well-established, and financially sound company. Blue chip stocks are known for their stability, reliability, and high dividend yields. Investors often consider blue chip stocks to be a safe investment, even in times of economic turmoil. examples of blue chip stocks include: -Johnson & Johnson -Procter & Gamble -Coca-Cola … Read more

What Does Yield On Cost (YOC) Mean?

Yield on cost (YOC) is a metric used to evaluate the performance of a stock investment. It is calculated by dividing the current annual dividend by the original purchase price of the stock. For example, if a stock was purchased for $50 per share and it currently pays an annual dividend of $2 per share, … Read more

What Is a Contra Market?

A contra market is a market where the prices of securities are moving in the opposite direction to the overall market. For example, if the overall market is trending downwards, a contra market would be one where prices are rising. Contra markets can be found in both the stock and bond markets. In the stock … Read more