This is the first article of a series, “How to trade options”, which explains how to trade options and what they are. First of all, we explain here the basics of call options and put options.
Options are a way to gain a profit in a market that neither constantly goes up nor goes down. With a long-lasting market trend such as stocks after 2008 or gold after 2012, bullish or bearish, you may simply buy or short sell a financial instrument.
On the other hand, when you know a market will not move for a while or when you know it will be volatile but do not know if it goes up or down eventually, neither buying nor short selling will give you any profit. However, with options, you can gain a profit even in such a market. This is why we explains here about options.
Continue reading How to trade options : what are call options and put options? →
This article explains how to evaluate growth stocks with fundamental analysis.
First of all, growth stocks are stocks that are highly appreciated in the markets due to their expected future growth, even though at the moment they haven’t yet achieved any notable profit.
The P/E ratios of those stocks sometimes exceed 100. It seems that this kind of evaluation simply ignores the fundamentals, but the prices of the growth stocks are actually decided by evaluation based on the fundamental analysis.
Continue reading How to evaluate growth stocks with fundamental analysis →
For hedge fund managers, too, short selling is more difficult than mere buying. A stock price, for instance, has a theoretical bottom line, and buying would be simply justified when the price is close to it, whereas overvalued instruments could go any higher as a bubble occurs. Roughly saying, you may predict, “it wouldn’t go lower than that”, although it’s much harder to say, “it wouldn’t go higher than that”.
Then, how can we short sell if it’s difficult to predict the peak of the bubble? This article explains what institutional investors consider in this kind of situation. Continue reading A hedge fund manager explains how to short sell →
The global-macro strategy is the method of investment that buys or sells all kinds of financial instruments according to macroeconomic affairs. The strategies used by hedge funds are known for profiting without depending on the trends of the markets, hedging various risks. In this article, we review how to hedge risks with the global-macro strategies, introducing examples from the current markets. Continue reading How to hedge risks with global-macro strategies →