Binary Options Trading Strategies

Understanding and Calculating Net Operating Income

Published by:

Understanding and Calculating Net Operating Income

Your “Net Operating Income” or “NOI” is essentially the amount of money you have left after subtracting all justifiable operating expenses from the total revenue generated from (or by) a property. This total revenue generated is called your “Gross Operating Income” or “GOI”. In short, in a case where Property Y has a GOI of $50,000 and justifiable or “reasonably necessary” expenses of $40,000, the NOI for Property Y would be $50,000 – $40,000 = $10,000.

Things to Note

  • The GOI is calculated by subtracting vacancy and credit losses from the property’s gross potential income (i.e. how much it could make in the absence of its losses).
  • Where the NOI is negative, the term “Net Operating Loss” or “NOL” is used.
  • The sums that lead to the calculation of the NOI are captured on the property’s income statement as well as the cash flow statement.

The Difference between Cash Flow and NOI

A property’s cash flow is the amount the property generates and uses in a given period. While they may sound similar at first, the fundamental difference between the property’s cash flow and net operating income are the expenses that you must include in the cash flow but exclude from NOI figure. Loan payments are an example of this.

Calculating a Property’s NOI

The best part about calculating a property’s NOI is the ease with which it can be done. All you need is a calculator, a detailed list of the property’s income as well as its operating costs, and a clear understanding of what to include and exclude in order to arrive at an accurate the NOI.

To accurately calculate a property’s net operating income you must:

  1. Record all sources of income for the property i.e.:

– Rent or lease
– Parking space or other facilities rental
– Upkeep and other service fees charged to tenants
– Vending and/or laundry machines as well as any such related services
– Any other means of income generation on the property

  1. Document all expenses related to:

– Vacant spaces/rooms/lots etc.
– Utilities and maintenance (such as janitorial fees and repairs)
– Office personnel
– Property taxes and insurance

  1. Avoid taking the following into account:

– Loan payments (both principal and interest)
– Depreciation
– Amortization
– Capital expenditures
– Taxes apart from those that are property related (since NOI is, in fact, a pre-tax figure).

Mistakes to Avoid

While net operating income calculations allow the flexibility of upward or downward adjustments of income and justifiable expenses, it is important to avoid overstating generated income or understating operating expenses. Doing either could easily prevent you from getting an accurate view of the property’s true profitability. This is especially critical to remember when attempting to show a possible buyer or investor what he or she can expect to make from the property.

Investing

Global View: Investing in Emerging Markets

Published by:

Global View: Investing in Emerging Markets

Investors are increasingly turning their attention to emerging markets. In fact, Morgan Stanley has an Emerging Markets index that consists of countries such as Brazil, Argentina, South Africa, Russia, China, Israel, Philippines, Peru, Egypt, Colombia, Venezuela, Thailand, Morocco, Poland, Czech Republic, Turkey, and India. according to the International Monetary Fund (IMF), such markets will experience about three times as much growth as developed economies. Here is what you need to know about investing in emerging markets:

Volatility

If you do not have a huge appetite for risk, emerging markets might not be the best bet because they tend to be volatile. Mark Mobius, the executive chairman of Templeton Emerging Markets Group, says investors should consider a 10% market correction as normal. In established and mature markets, such as the US, investors would view such corrections as indicators of an unprecedented selloffs or even a recession. As such, investors who cannot stomach double-digit market corrections should invest half of their usual asset allocations to emerging markets. This is according to Christiane S. Delessert of Montis Financial, an asset management firm in Waltham, Massachusetts.

Exuberance

Many investors tend to be upbeat about the outlook of emerging markets. This is largely because these markets will likely account for 70% of the world’s GDP growth over the next few years according to a Forbes report. However, this does not mean that the future of emerging markets will always be rosy. A report published by AXA Equitable Financial Services, LLC, warns investors that there is “no free lunch” when it comes to emerging markets investments. Financial or economic malaise in one country can easily spread to others. A good example is Thailand’s devaluation of it currency, the baht, in 1997, which triggered a chain of currency devaluations across the region. Most Asian countries devalued their currencies to ensure their exports remained competitive in the world market. With this in mind, it is wise to avoid exuberance when investing in these markets.

Hunting for Bargains

Stocks in emerging markets tend to have lower valuations compared to stocks in developed markets, which means finding bargains is easy. A report published by the Wall Street Journal (WSJ) shows that mutual funds and other large institutional investors have shifted their attention to emerging markets to hunt for bargains. For instance, Ivy International Core Equity, a mutual fund that usually invests 8% of its portfolio in emerging markets, has ramped up investments to 15%. However, current spreads are unusual according to Nathan Rowader, director of investments at Forward Management LLC in San Francisco. For example, companies in emerging markets have a price-earnings ratio (P/E ratio) of about 13.4. In comparison, this figure is about 18.4 in the US, which translates to a five-point spread. Nevertheless, Rowader expects this gap to close in coming years.

In conclusion, investing in emerging markets is not for the fainthearted because volatility in these markets tends to be quite high. In addition, investors should not be driven by exuberance to invest in these markets. Finally, finding bargains in these markets is easy.

Binary Options Trading Strategies

The Essence of the Advance-Decline Line Strategy

Published by:

The Essence of the Advance-Decline Line Strategy

The Advance-Decline Line, which is commonly referred to as the AD line or A-D line, is essentially a range indicator that is concentrated on net advances.  These advances represent the quantity of proceeding stocks minus the number of stocks that are decreasing.  When advances surpass they are definite and when they decrease they are negative.  In essence, the advance-decline line is the accumulative computation of net advances.

Typically, the NYSE or NASDAQ provides the advance-decline data on a daily basis.  Traders have the option of using the A-D line for the index, contrasting it to the movement of the authentic index. The line is designed to ensure a cost decrease or increase with indistinguishable motions.  Bearish or bullish differences in the A-D line are indications of changes in involvement, which could signify a price reversal.

The strength of the market is threatened when an inadequate amount of stock takes part in an advance.  Often, diminishing involvement is linked to a bearish divergence between the underlying index and the AD line.   On the other hand, when the A-D line and the underlying index falls to a new low, the market is considered to be frail.  A bullish divergence comes about when there is a failure of the AD line to attain a lower low in consort with the index.  This is an indication that insufficient stocks are lessening and the index reduction might be coming to its end.

Investors should be mindful of certain traits that may be carried by the advance-decline data.  Primarily, the NASDAQ AD line has a long-term sinking influence.  This is because the listing needs of NASDAQ are not as stern as the listing needs of the NYSE.  The NASDAQ has a content of upstarts in sectors, which fluctuate from biotech to alternative energy to technology.  While a massive upside probability is likely, there is the risk of failure as well.  A number of stocks in NASDAQ are vulnerable to being removed.  Failing companies are erased from the index; however, they leave behind their harsh effects on net advances.

Conclusion of the Advance-Decline Line Strategy

As it relates to the advance-decline line strategy, a broad advance is an indication of the massive bulk of stocks that are participating.  This will cause the AD Line to be sharply elevated.  A small advance is an indication of little involvement, which will cause the AD line to elevate only a bit higher.  The declines can be narrow or broad.  A wide-based advance is an indication of underlying strength by which most boats are elevated; this is considered bullish.  A smaller advance is an indication of a comparatively mixed market which is best qualified or most suitable.  An advance that has slender support is impractical to remain aware of the underlying index and will result in the formation of a bearish divergence. These divergences can assist traders in recognizing vital inversions within the market.

Investing

Growth Investing

Published by:

Growth Investing

When it comes to investing, different people have different trading styles and preferences. For any investment undertaking, growth of the invested funds is usually the number one objective on most investors’ lists. The best way to accomplish this objective depends on the prevailing factors like investment time frame and level of risk tolerance. Growth investing is a type of strategy where a trader buys stocks which have a substantial growth potential. Growth investing can also occur when a stock is trading below its daily threshold and hence bears a huge growth potential. Growth investment is of various categories, most of which have exhibited consistent growth patterns and it usually involves equity in one form or the other. The most prominent classes where growth investment is common are explained below.

Small Companies Stocks

In financial terms, the size of any given company is usually measured by its net worth which is depicted in its annual financial reports. In most cases, small-cap companies are considered to have a net worth of between $300M and $2B.When a company is in this category, it is still in its initial growth stage and its stock prices have a very mouthwatering potential for investors looking for growth.

Health Care and Technology Oriented Stocks

In terms of growth potential, companies that are associated with the development of new technologies are deemed to have a high growth potential for investors. Technological firms’ stocks tend to escalate in prices after a major release of a product over a very short period of time. Another sector that is associated with a high potential growth rate is health care firms which are oriented to production of revolutionary drugs ad medication. For instance, in 1994, Pfizer stock ranged at about only $5. After the release of Viagra, the stock price skyrocketed to $30 per share within a very short period of time.

High Risk Speculative Investments

Some high risk ventures like oil and gas stock trading are considered to have huge growth potential due to the uncertainties associated with the two sectors. An investor can buy stocks when the prices are on a downward spiral, speculating a price increase in the future. Investing in such sectors is however termed as very risky. In case an investor makes a wrong choice, he/she can stand to lose all the invested funds.

Before evaluating investment growth potential, it is of essence to first consider some key basics in growth investing. Most of the factors involve mathematical calculations and they are all aimed on the returns. An example of these factors is the return on an equity index. This is a calculation oriented factor which determines how efficiently a growth investor can make money from the said investment. For instance, when evaluating companies, an investor should evaluate the shareholders equity in relation to the net income of the company. When making a decision between two companies, this index can be of great help. For example, assuming that Company A  has a $200M shareholders’ equity and Company B has $500M shareholders equity, assuming they both reported an annual income of $100M, then Company A has a bigger return on equity as compared to Company B and hence it should be the preferred choice

Last Word

Growth investing is one of the successful strategies used in the trading market today. However, a slight mistake can cost an investor a great deal especially when one focuses purely on speculative growth investment.

Binary Options

No Faith in Bitcoin? Profit from Shorting It

Published by:

No Faith in Bitcoin? Profit from Shorting It

As the popularity of Bitcoins continues to increase, there are people who are skeptical about the future prospects of the BTC. Some people think that the value of Bitcoins is going to increase significantly over the next couple of years. On the other hand, Bitcoins are gaining popularity and acceptance in a number of industries. In fact, most online casinos and binary options brokers, among other financial services providers, nowadays accept Bitcoin payments. Experts expect the strong growth to continue and the value of the BTC against the dollar to continue rising. No faith in Bitcoin? Profit from shorting it. The following is a simple guide of how you can short the Bitcoin and make a decent profit.

Bitcoin Explained

Bitcoins are simply a type of digital currency that are generated and regulated by sophisticated software, which also verifies the transfer of funds. They can also be looked at as private currency that is free of manipulation, control or regulation of the government through the Fed or central banks. Since this currency is not regulated by the government, Bitcoin trading is also not under the supervision of the SEC, so it can be a risky venture. Fortunately, there are reputable Bitcoin trading platforms that make it possible for traders to buy and sell Bitcoins.

How to Short the BTC

Depending on your preferences, you have two options for shorting Bitcoin.

  1. Private Contract

You can simply find a friend, colleague, neighbor, business associate or relative who holds a huge chunk of Bitcoins and negotiate a deal. This is a much safer option because you know the person whom you’re dealing with. Be sure to check that the contract is enforceable by law.

  1. Bitcoin Trading Platforms

There are thousands of Bitcoin exchanges and trading platforms around the world. All you need to do is find one that offers conducive terms and conditions.

How it Works

When shorting the Bitcoin, the trader borrows a certain amount of Bitcoin over a specified period and pays interest to the lender. Lenders are usually other Bitcoin traders or the Bitcoin exchange. Once the lender transfers the requested Bitcoins to the trader, he or she can sell them for dollars, or their preferred currency. When shorting an asset, you assume that the strike price is at the highest possible point, or at least close to it, and that prices are going to drop within the term of the contract. This means that you will get a lot of dollars when you sell the Bitcoins. As the contract expires, with Bitcoin prices at a lower rate, all you have to do is spend some dollars to buy the exact number of Bitcoins that you borrowed at the current price and transfer them to the lender. By doing this, you will be left with some dollars, which is your profit. It’s as simple as that. With modern trading systems, shorting is very simple. No faith in Bitcoin? profit from shorting it.

Investing

Stocks That are Affected by Political Crisis

Published by:

Stocks That are Affected by Political Crisis

Politics has always played a key role in the stock market but the onset of crises makes this fact all the more apparent. Investors should be aware about the historical price movements during times of great stress. They must constantly keep an eye out for developments so that they can react quickly and appropriately to stimuli. Stocks that are affected by political crisis are spread across multiple sectors which we will examine here in some detail:

Energy

The energy sector is an essential part of the economy. Both industries and individuals depend on power for their everyday needs, such is the reality of modern life. Gas, coal, and electricity fuel businesses and households. This dependence on energy has made it crucial for the government to closely monitor and regulate the sector. This makes it vulnerable to political upheavals and maneuverings. The party in power may favor some stocks over others due to differences in philosophy and, indeed, connections. Investors often shy away from this sector during the run up to elections and related crisis that increase volatility.

Defense

The United States government spends a large portion of the annual budget on defense every year. The funds are used for the purchase of new weaponry, as well as other needs on and off the field. They go into the maintenance of the massive manpower required to keep programs going. Companies that make weapons and related products necessarily have to deal with the government as it is the biggest client. Political upheavals can jeopardize a business as contracts may be cancelled or awarded to competitors and companies favored by the new administration.

Tobacco

Tobacco has always been a touchy subject. Its adverse effects has been well-documented by medical professionals but the demand is still strong for the products. Producers are in a constant struggle to maintain good public relations and minimize the effects of adverse policies. For instance, sin tax may be pressured to increase as a way to fund a projected increase in government spending. Companies may try to counteract this in Congress. In a stable time, it would be easy to pinpoint allies and formulate a strategy. However, a political crisis may turn everything upside down thus making things uncertain.

Environment

In recent years, environmental degradation has taken on a whole new level of importance when it comes to public discourse. People are more aware of the destruction of the environment and the role we all play in this process. This consciousness has led to increasing demand for environmentally friendly products such as solar panels, electric cars, recycled construction materials, and so on. The ruling party determines how well the policies are crafted to support this burgeoning sector. The companies involved have stocks that are affected by political crisis as policies have the possibility of changing rapidly. Investors may avoid them until stability has been restored.

Binary Options Trading Strategies

How Does Goodwill Affect Financial Statements?

Published by:

How Does Goodwill Affect Financial Statements?

No matter what type of financial instrument you choose to trade, it is important to know how to determine the value and stability of the related assets and companies.  This is especially true when trading products that are directly affected by the financial health of businesses.  It is vital for traders to investigate the different factors that will likely impact their investment decisions.  For instance, how does goodwill affect financial statements?  While it might be easy to calculate the overall value of the assets that a company currently owns, there are many far less tangible factors that will play major roles in determining its overall worth.

What Goodwill Is

The goodwill of a business is comprised of many things.  This can be the amount of consumer trust that a business has established by providing dependable service throughout the years.  This can also include brand recognition, which will make future marketing endeavors much easier and far less costly.   Goodwill can additionally be defined as having a large and loyal customer base.  While these things are far more difficult to assign real number values to, they do add to the worth of a company overall.  Thus, goodwill is carefully calculated and recorded on the financial statement of a business along with its other intangible assets, such as the trained talent that the company already has on board.  When the business is sold, buyers will base their offers off of the assessed values of the tangible and intangible assets together, meaning that goodwill definitely has an impact on the overall sales price and calculated worth of a company.

How Goodwill Affects Investors

The way in which goodwill affects investors is heavily dependent upon the type of financial instrument that is being traded.  For those interested in penny stock trading, assessing the financial records of companies is vital.  This is the best way to determine whether low-price stocks are capable of generating impressive returns.  People who are trading other financial instruments can also look at financial records to determine whether or not a merger or acquisition is going to be successful and whether these changes are likely to lead to profit or loss.

How goodwill is recorded is often a key indicator of the success of a merger.  Ultimately, a company that has a considerable amount of goodwill will generally be able to establish a higher asking price when selling.  Those who merge with or acquire companies with lots of goodwill are seen as being primed for success.  These entities can look forward to lower marketing costs, pre-established and loyal customer bases and many other perks that come with having a solid industry reputation and a good business history overall.  If, however, the goodwill is recorded after a merger or acquisition has occurred rather than before, this is often seen as a sign that the takeover is not a successful one or that there is a high likelihood of problems for the business in the future.  How does goodwill affect financial statements is a good question.  Knowing how goodwill will impact the future of a business, however, is much more important when investing.

Investing

Influence of Home Economy in our Investments

Published by:

Influence of Home Economy in our Investments

The influence of home economy in our investments is far greater than most people think. The U.S monetary policy has a profound effect on your investments. There are investors who already know this and have already taken the appropriate steps to cushion themselves from poor performance of the home economy. The following are examples of how the home economy can affect your investments.

Inflation

Inflation has a big impact on the economy. It is characterized by an increase in prices of consumer products and essential services. The average consumer price across the country increases as a result. Since incomes do not increase with rising cost of living, the buying power of money is reduced by inflation. If you have invested your money in fixed income investments, your earnings will be worth much less due to inflation. Over time, your investment will lose value significantly if the inflation is not corrected. The face value of bonds, certificates of deposit and fixed-interest government securities are usually eroded by inflation. Fortunately, the government can take short-term measures to correct inflation.

Consumer Confidence

If consumers in the home economy are not confident in the markets, they are going to be too cautious with their money. They are likely to retain their cash instead of spending or investing it. For stock investors, this may translate to losses as stock prices tumble due to lack of demand, which always pushes the prices downwards.

Interest Rates

The government uses monetary policy to control inflation, spur economic growth and promote employment. Monetary policy affects two things; money supply and credit.

Money Supply: The government can simply print more money and release it to the economy when there is deflation. This may help to bring back stability in the economy. When there is high inflation, the government can offer high yielding bonds to mop up any excess cash from circulation.

Credit: When there is inflation, the government uses monetary policy to discourage borrowing by increasing the base lending rate. When there is deflation, the government can lower the base lending rate significantly to encourage uptake of loans.

Real estate investors are always happy when the government lowers the base lending rate since their variable rate mortgage payments will go down, thereby increasing their profit margins. Those who subscribe to corporate bonds when rates are high can also get decent returns. Bonds and certificates of deposit that are index-linked usually have varying rates of return depending on economic conditions and monetary policy. Pension funds and insurance policies are normally adjusted from time to time to address the changes in the home economy.

The influence of home economy in our investments has a big impact on the value of our portfolio as well as returns on investments. Therefore, it is important for investors to keep track of monetary policy announcements, news on economic performance and reports from the Federal Reserve among other agencies.

Binary Options Trading Strategies

Working with a 1 Minute Professional Strategy

Published by:

Working with a 1 Minute Professional Strategy

For investors who are not afraid of working with risk and are prepared to thrive in a fast paced trading environment, it can be a good idea to look into a good 1 minute professional strategy for their needs. Not only will a good strategy be able to provide them with the approach that they need, but it will be able to work effectively with all types of risk and volatility. These strategies are designed specifically to work in markets that are measured by how sensitive they are to change and breaks in patterns. This means that traders who are more comfortable in working with longer term periods of trades will not be able to work with these strategies as effectively. One of the most important things that you will need to keep in mind is your personal level of comfort when it comes to working with trades. Sometimes certain strategies will not be able to help you as efficiently as other ones might in similar situations.

Most sixty seconds binary options strategies involve looking into the immediate short term of the trade. They are, as such, defined as a short term trading strategy that will make use of one minute charts in order to forecast the probably direction of price movements after the time frame has expired. When they are implemented correctly, the sixty second binary options strategies can end up becoming very profitable very quickly. One of the leading advantages of working with such a strategy is the fact that individuals will be able to make their profits very quickly, without having to worry about planning ahead for the long term once they find a strategy to work. However, these types of strategies can also be extremely difficult to work with if the trader is not prepared to put in the necessary time to research and explore all options as they become available in the trading field.

The 1 minute professional strategy can be used very efficiently in order to place trades at higher frequencies at expiry times that are typically very quick and very short. Prices for most volatile assets, such as currency pairs, which move several points every couple of seconds, means that you will need to act as quickly as you can at the right moments in order to make your profits. There will be no time for second guessing, which means that you will need to enter this type of trading method with the right mindset ready. Always consider the direction as carefully as you can and make sure that you are firmly ready to back that decision with your finances. You will need to have the right tools to analyze the market as quickly as you can, immediately enough to place your orders and then see your profits through the indicators as they apply to certain volatile situations.

Binary Options

Traders with Highest Success Ratio

Published by:

Traders with Highest Success Ratio

Trading binary options is one of the easiest ways to make decent returns with a small investment amount. Traders with highest success ratio put several factors into consideration when making trading decisions. It is all about learning a few simple tips and guidelines on how to be a successful binary options trader.

Choose a Reliable Broker

A broker who understands his work well makes all the difference. Check out potential brokers and make use of review sites and comparison forums to choose a reputable broker. The secret is to clearly define what you are looking for before setting out to find a brokerage firm that best fits those needs. It may be time consuming but there are numerous resources that can come in handy.

The rates being offered by each broker also matter. Some brokers simply offer better returns on investment as compared to others. Rates may also differ across different asset classes. Similarly, identify what you will be trading before applying that criterion to your search.

Demo Account

Making use of a demo account comes with plenty of advantages. As you are using a practice account, you are able to make use of the site’s software and make real time trades with zero risk. The main benefit of demo trading is that you get experience with the site, familiarize yourself with the controls and eliminate any potential mistakes.

Binary options trading is an every changing field and there is always something to learn. Increasing your knowledge in the field gives you a great opportunity to take advantage of the information you have to your advantage. Read books on binary trading and make use of other useful resources as trading binary options is a constantly-evolving experience.

Strategy

Trading with a sound strategy will ensure that you come on top. The secret is to resist the temptation to make blind decisions and stick to your dawn plans. Take some time to analyze the market and come up with a good strategy that meets all your preferences.

Self-Control

It is quite tempting to over-invest for bigger potential rewards. This is why you should learn how to exercise self-control and refrain from being carried away to make that big score. New traders often lose money by trading blindly and over-investing. Stay up to date with trading news and understand the root cause of market changes.

Even with a reputable broker, awesome rates and the best option assets to choose from, an unskilled trader is still likely to lose money. Work on coming up with trading strategies and make necessary adjustments where need be.

Study the Market

Traders with highest success ratio prepare themselves well before trading. In as much as you may be well informed, studying the market and viewing graphs over time can help in predicting the behavior of a binary option trading asset. Ensure your mind is clear and that you are calmed down so that you are able to make well informed decisions.