All About Financial Matters

Archive for January, 2009

Bad credit score is regarded as a biggest hurdle while availing finances from the financial market. But, now it is not a big problem as there are many loans available in the financial market, which are especially targeted to all bad credit scorers. There are different types of loans such as bad credit secured loan, bad credit wedding loan and many more. Likewise, there is bad credit car loan which provides financial assistance to the person with bad credit score to become a car owner.

Bad credit car loan is easily available in the financial market as majority of the banks, financial institutions and building societies provide such loan on competitive rates. But, it is recommended that the person must compare the deal before taking final decision. Comparison must be made on the basis of the total cost involved, that is, annual percentage rate. He must also make sure that the deal which is being finalized carries favorable terms and conditions.

Like other initial loans in the market, bad credit car loan can also be availed in either of the two forms that are, secured bad credit car loan or unsecured bad credit car loan.

While availing bad credit car loan, it is always suggested to make high down payment. Most of the times, it is seen that the person who makes high down payment is always offered with low and better rates. And above that they are also easy to repay as this reduces the burden of payment.

Lastly, the person must try to make timely repayment in order to improve their credit score, because if they do not make timely repayments then their credit score will get worst and will further emerge as big hurdle while procuring finances from the financial market.

Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is working as financial consultant for chance for loans . To find a

Two days after your purchase, the stock’s market value fell two points. You sold the put and received $800. This represents a return on your investment of 33.3 percent in two days (not considering trading costs).

In this example, you turned the position around rapidly and walked away with a profit. So the bargain existed in this put because you were right. The return was substantial, but that does not mean that the experience can be repeated consistently. Remember, when you buy puts on speculation, you are gambling that you are right about short-term price changes. You might be right about the general trend in a stock but not have enough time for your prediction to become true before expiration. With this in mind, it is crucial to set goals for yourself, knowing in advance when you will sell a put—based on profit goals as well as loss bailout points.

Example: Know When to Quit: You bought a put last month, paying a premium of 4. At that time, you decided to set a few goals for yourself. First, you decided that if the put’s value fell by 2 points, you would sell and accept a loss of $200. Second, you promised yourself that if the put’s value rose by 3 points, you would sell and take a profit. You decided you would be willing to accept either a 50 percent loss or a 75 percent gain. And failing either of these outcomes, you decided you would hold the put until just before expiration and then sell for the premium value at that time.

Setting goals is the only way to succeed if you plan to speculate by buying options. Too many speculators fall into a no-win trap because they program themselves to lose; they do not set standards, so they do not know when or how to make smart decisions.

Example: Missed Opportunities: You bought a LEAPS put last month and paid 5. With 26 months to go before expiration, you thought there was plenty of time for a profit to materialize. Your plan was to sell if the value went up 2 points. A month after your purchase, the stock’s market value fell and the put’s value went up to 8, an increase of 3 points. You did not sell, however, because you thought the stock’s market value might continue to fall. If that happened and the put’s value increased, you did not want to lose out on future profits. But the following week, the stock’s value rebounded 4 points, and the put followed, losing 4 points. The opportunity was lost. This pattern repeated several times and the put ended up worthless at the point of expiration.

This example demonstrates the absolute need for firm goals. Even with a lot of time, you cannot expect to realize a profit unless you also know when to close the position. Inexperienced option speculators do not recognize the need to take profits when they are there, or to cut losses—either decision based upon a predetermined standard. When the put becomes more valuable, human nature tells us, “I could make even more money if I wait.” When the put’s value falls, the same voice says, “I can’t sell now. I have to get back to where I started.”

Ask yourself: If you listen to that voice, when do you sell? The answer, of course, is that you can never sell. Whether your option is more valuable or less valuable, the voice tells you to wait and see. Lost opportunities are unlikely to repeat themselves, given the time factor associated with options; and even when those opportunities do reappear with a LEAPS put, it does not mean that the right decision will be made. The old stock market advice, “Buy in a rising market,” cannot be applied to options, because options expire. Not only that, but time value declines, which means that profits you gain in intrinsic value could be offset if you wait too long. You need to take profits or cut losses at the right moment.

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