It’s true that when many people hear the words ‘business liquidation’ that they assume the worst. We think of failure and something coming to a bad end, but believe it or not, there are some positives to come from liquidating your company. The directors of the company will feel the benefits immediately, in that any debt collection that is ongoing must stop and the many calls from creditors demanding their pound of flesh can be controlled, and all these outside influences can be directed towards the liquidator. This then allows the directors of the business to make plans and release themselves from some of the stress involved. [Read more…]
For the self-employed tax can prove to be quite a headache. Those lucky enough to be in full-time employment and paid via a PAYE system are in an incredibly fortunate position of having all their tax calculated and deducted automatically each month before they see any money. Some that are self-employed may look at this method with a certain amount of envy, however they will raise a wry smile in the knowledge that they are in full control of their finances. [Read more…]
Before investing in a timeshare property, you might want to first take a read of the article, Timeshare horrors: fresh hope for 100,000 people locked in costly contracts, published via The Telegraph News website. The article documents the reality of timeshare investing experienced by thousands, both in the UK and abroad. [Read more…]
There are all kinds of expenses to pay for in a busy modern life. From rent and utility bills to car insurance and clothes, it seems as if all of your salary goes on the essentials you need to survive. Perhaps you think that you can’t cut your expenses any more than you already have, but there are probably several things you’re spending too much on. Sometimes your essentials aren’t quite as essential as you think, or you can change the way you spend on them. Even expenses like electricity and water bills can be carefully managed so you can cut them down.
Food is, of course, essential to our everyday lives. But it may surprise you that you can save money on your food in ways you haven’t thought about. Some ways of saving might require you to change the way you think. For example, one way to make the most of your food budget is to avoid buying branded products. Many unbranded products, such as supermarket own brands, are no different from the products with big names. The ingredients are the same, and the taste is often the same too, but the price is much lower. It might be hard to let go of your favourite brands, but doing so will save you a lot of money. You can also save money on food by planning meals in advance to help you avoid the temptation of frozen and ready-made foods.
There are plenty of sensible ways you can cut down on your household bills. With the price of utility bills rising, you obviously want to reduce them in any way you can. Of course, you need to keep your family warm, clean and fed, which requires water, gas and electricity. But you don’t need to push your bills to their limits. Avoid putting the heating on unless everyone is still cold with a jumper on. Don’t run the water unnecessarily and take showers, not baths. If you look at stats on cutting your water bills, you’ll find that you could save 50 litres of water by cutting your shower time by 5 minutes. Turn lights off when you aren’t in the room and don’t leave things on standby to save electricity.
If you drive, your car is probably one of your biggest expenses. There’s the cost of buying it, the insurance, tax, fuel and maintenance costs. You may think that all these costs are inevitable if you want to be able to drive, but there are ways to cut back. To begin, consider buying used cars instead of new. If you’re careful about buying and make sure to research and check each car, you can get a decent vehicle for a much lower price. Buying several used cars in a few years could end up cheaper than one new one. You should always shop around for insurance too, and get the best deal on any maintenance costs. Don’t always go with the first company you find.
A hedge is a trading position taken to neutralize changes (gain or loss) in another, primary position. The classic hedge involves agricultural commodities. A palm oil producer (for example) has a crop they intend to sell in six months. To guard against a dramatic fluctuation in palm oil prices, the producer establishes a futures market position that fully covers their risk of owning palm oil; this fixes (guarantees) the current commodity price for them. Should palm oil suddenly fall in price, the producer will not lose; should the price increase, they will not gain. The arrangement is undertaken to acquire certainty; it is entirely non-speculative.
Ownership always entails the possibility of loss. The diamonds can be stolen, the house can burn down, the stock can fall. It is common to pay for insurance against loss or damage — insurance is a type of hedge. Diamonds and houses can be insured; so can stocks. The risk of establishing an ownership (long) stock position can be reduced by also paying for insurance; this is invariably done with put options. Combining put options and stock ownership (the “protective put”) generally results in one of three outcomes: the stock is unchanged and the investor loses the relatively small option premium; the stock rises and the investor’s profit is slightly offset by the premium; the stock falls but the option becomes more valuable, mostly offsetting the investor’s loss. An investor can simulate this position using binary options – buying put options and call options from reputable USA binary options dealers.
An investor buys stock with a bullish or neutral outlook. When the outlook is bearish, the equivalent stock position is the short. Working with a lender (invariably the broker-dealer), the investor simultaneously borrows and sells the target stock, hoping it will fall. This is short selling, or going short. The investor closes the position by buying the target stock and simultaneously reimbursing the lender. Short selling is not free; the investor must sometimes pay fees and must maintain a dynamically varying minimum account balance (margin).
The short seller suffers when the stock refuses to fall and, in fact, rises in price. When a shorted stock rises, it can do so significantly due to the mechanism of shorting itself. As the price rises, more and more short positions will (usually automatically) close to limit loss; closing a short involves buying, and buying generally increases prices. This accelerating cycle is called a short squeeze.
Just as stock ownership can be insured by purchasing put options, stock short selling can be insured by purchasing call options. If the short trade goes the wrong way (up), the investor’s call options will increase in price. Furthermore, the account’s margin requirements are fixed. The combination of long call and short stock is known as the synthetic long put.
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