leverage
leverage questions and answers
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Q: Is there a Forex trading Platform with adjustable leverage?
Its crazy to trade at 200:1. Has anyone come across a trading platform that will allow me to adjust the leverage?
A: 200:1 is very dangerous! I know eToro allow you to go from to 10:1 to 400:1, a link is proved to them below. I use it and all you have to do is click an arrow from 400:1 to get down to 10:1.
Q: Briefly explain the pros and cons of financial leverage. In other words, what are its benefits, and what are t
Briefly explain the pros and cons of financial leverage. In other words, what are its benefits, and what are the costs that come along with those benefits?
A: Leverage involves risks. If you borrow money to invest you might be able to put down a small investment to control a large asset. On a personal level this could be a home. Put down $10,000 and buy a home worth $200,000 if the home doubles in price in you would make a 200,000 profit on your $10,000. On the other hand if you paid cash for the same house you would still profit $200,000 but the percentage wouldn't be as impressive.
You can do the same thing in the stock market buy on margin instead of buying 100 shares for cash put down the same money and buy 200 shares, you can gain or lose money twice as fast. In the great depression people were using only 10% their own money in the stock market so when the price fell even a little it wiped out a paper fortune and they couldn't cover their margin calls, their financial lives were ruined.
Sub prime borrowers are doing that now the house price falls and they have no equity so when they need to sell they ruin their financial lives.
Leverage is very powerful both for good and bad.
Q: Why did the government not require Banks to keep their leverage at 12 or 15 to 1 to get a bank license?
Why allow Investment banks to skirt commonly accepted banking norms and leverage themselves at 40 to one?
And if they don't require this in the 700 billion ailout we will be right back where we started.
A: Oh, that's too bad, I received an email PowerPoint that explained it all, but I can't paste it. It's really long and raunchy but probably pretty accurate. The answer is Caymen Islands.
Q: Is UTI Retirement Benefit Pension Fund is good fund to leverage High risk appetite of investors?
Is UTI Retirement Benefit Pension Fund is good fund to leverage High risk appetite of investors as well as to get Tax benefits?I have to renew my SIP next week, so please advise.Thanks.
A: Its good if you live in India. if you are trying to invest from outside India, then its a really bad idea.
Q: How much leverage are you comfortable trading in FOREX?
Does anyone have any suggestions on a leverage limit?
Many FOREX brokers allow up to 200:1 leverage. My trading strategy is to take just very small gains (3 or 4 pips at a time) and set the stop losses way out there just to avoid a total wipeout. I never trade on Fridays either and of course close out before the market closes.
Because of the giant stop losses, I am only comfortable with around 20:1 leverage or maybe 30:1.
In other words, with a $500 margin account balance, I would only consider buying 0.1 lots of EURUSD (10,000) at a time; 0.2 lots with $700; 0.3 lots with $1100 and so on...
Does anyone out there use the same strategy as me and feel comfortable with higher leverage like 40:1, 50:1 or even higher?
A: As you indicated, it is not just your leverage that you need to take into account...it is also your margin level that is important.
When I am drawn back to my technical analysis days I usually use a leverage of 40:1 unless I have a high probability setup occurring (based on pivot points and fibs). In that case I might go as high as 100:1.
Currently the majority of my Forex activity is based on conservative hedge trades (usually hedging the EUR/USD and USD/CHF). With my hedge trades I use a leverage of 400:1 and a margin of 10%. Hedging is awesome because the position can make profit regardless if the market goes up or down. I also get paid a daily interest payment, 7 days a week.
I have an analysis of the daily performance of 5 different hedge strategies over the past 500 days if you would like to see it. And these were all at 400:1 leverage and never anywhere near a margin call.
Paul
Q: How do I use the internet to leverage the best deal possible on a new car with local dealers?
I am getting ready to purchase a new vehicle. I have heard one can find dealer cost online, etc. I haven't been able to locate a source for this. Any other advice on getting best price appreciated!
A: Buying a new car! Congrats! To get the best deal you need three things: 1.Know what you want to buy. not just the type of car but THE car you want. (e.g. '07 Civic EX, atomic blue with navigation). 2. Check the Edmunds.com TMV price and the market for your car, if atomic blue is a rare color discounts are less likely. And 3. sit across a desk from a salesman.
The net is a great place to start but you will find quotes on cars that the store doesn't have! Sitting across the desk from a salesman is the best way to get a good deal. S/He is motivated to have you drive home in a new car. you also want to take more than price into considreation. What does this store do that builds value in me as a client? Consider the salesman as well. How hard would you work for a person who doesen't value your work on thier behalf( and they ARE on YOUR side!! if you don't buy they starve, but $50 is so not worht fighting for an a**ho*e to buy from me!!) they are paid on profir NOT the price of the car. a good deal for you and the store (and salesman) is invoice+state tax % minus any&all rebates. ( the state makes that shouldn't the store?) for example: 07 Honda Pilot has $3500 cash to dealers(8/07) so in MD a good deal on an '07 pilot 2wd lx would be: $24,544-$3500+5%+ tax tags title $22,097to$22,509 +tax tags& dest. Don't come in with unrealistic offers that are based on what you think the price should be. you will be turned down. edmunds.com TMV pricing and the formula i just gave is a fair deal to ANY person OR store. If the won't accept the offer...walk. your salesman won't stop fighting for a reasonable price,but he won't stop you from walking if you are unreasonable. It's not worth it.
Q: What is the best and safest way to leverage an investment and gold or silver ? I do not know how to trade ?
I have never traded options. I also would like to find good stocks to buy based on higher prices for gold and silver.
A: Here is a thought. Buy marginal mining stocks. Their earnings and stock price will rise dramatically on any rise in gold prices. A safer approach but not so likely to score big results is to buy a stock like ABX or GG a couple of leaders in gold mining. Either approach is much much safer than buying options. Another option is to buy ABX and sell options against the position. Should yield about 12% annually at least, but it is all taxable at full tax rate. Not something to ensure best results.
You might ask, what are marginal gold mining stocks.
Maybe a couple to consider are AEM, BVN, GSS, KGC, RGLD, IAG
Q: What kind of leverage do I have when paying CASH for a new vehicle?
Any dealers out there? I want to buy a new truck this weekend, CASH. I want to be able to save on interest in the long run as well as score a great price. Do the dealers knock much off? How low do they go off sticker on a regular basis. A couple thou?
A: Tons.
Get the book "Don't Get Taken Every Time" by Remar Sutton from the library.
Don't have time? Get the invoice price online from Consumer Reports or any other web site.
Paying cash on a 2006 model you should get thousands off sticker or tens of thousands, depending on the sticker price.
Q: How do you create leverage when trading in fantasy baseball?
you have a bunch of average players, you want good ones, what do you do?
A: Offer maybe more than one of your average players for a star. I generally look at all of the teams in the league and figure out which teams are filled with stars. After that you need to figure out what you have to offer. Say you want a power bat, but don't think you have the guys to trade for him, figure out what the manager of that team needs; say he is lacking in steals. If you offer soeone on your team that is high on steals and throw in another player, you can get your man. Another way to approach it is to find a team that has a star that is struggling. You can get slumping stars cheaper, but run the risk of that slump continuing.
Q: How can a company leverage on the sponsorship to get maximum public relation (PR) value?
If company A is the gala dinner sponsor for a particular event, how does this sponsorship get the maximum PR value?
this is urgent.
A: With signs all around. If its at a dinner maybe the company logo on the napkins. Give out pens with the company name on it as well.
Q: What does it mean to "Leverage your life by uniting with those who would like to leverage their life"?
Is it possible for that to happen or do most people not think that way?
Which do you do?
No it wasn't from anyone else! it's a concept.i was curious your thoughts on.
A: By uniting with other people who want to leverage their life, you are uniting with like-minded people for a common goal and purpose. It's kind of like a revolution. You band together with people who have the same thoughts and goal, and you are stronger.
So yeah, it's possible.
Q: Do you think Hillary Clinton is using her voters as leverage against Barack Obama?
Last night Obama received enough delegates to win the nomination. Hillary did not concede. Do you think she did this to show Obama that she would give a lackluster endorsement which would hurt him in November and/or challenge that he should be the nominee which would just cause more strain and party division.
This would give her leverage for him to make her his VP.
I'm just trying to figure out her motives for not conceding last night.
A: Pretty much. Hopefully she will concede this weekend. But how many times have there been false concession alarms. But even when she does concede she's going to keep her delegates. She's still a delusional sore loser.
Q: How do I leverage my seemingly rarified experience into a job?
I have a degree in film/tv and since spent my career at top entertainent companies (studios) working in film development. Now that arena has dried up and trying to find a job in a different field seems impossible. Nobody equates the skills I gained in the jobs to anything they have - even though I've done everything from marketing, budgets, advertisting etc. Getting an HR person who is taking 100 resumes from a job board to actually look and THINK about what I have to offers seems impossible. I don't mind working up a ladder, although I do need a certain level to support my family. If anyone can offer some practical advice, I'd appreciate it. Thanks.
A: Write you a Great resume & cover letter. Ask someone in HR that you trust maybe from a past job or career center for their advise and find a Head Hunter in your area...Have samples of your work, referal letters are always helpful
Good luck I know how you feel.....
Q: When trading forex what is the difference in cutting leverage in half and cutting order size in half?
Is there a difference between the two?
Profit/loss will be cut by the same amount either way, correct?
A: Cutting leverage means that you will be wielding less power with every dollar you invest.
If you invest $10,000 at 100-to-1 leverage, you are essentially controlling $1,000,000 worth of assets.
At 50-to-1 leverage, your $10,000 is only controlling $500,000 worth of assets.
Both ways, the most you can lose is your initial $10,000.
Cutting order size means you are investing less at a time.
Say you buy one $500 lot instead of 2 $1,000 lots.
That's my understanding, anyway.
You are better off cutting lot size than leverage, I think.
Q: How does a trader leverage the purchase of bonds?
(Assuming this is done.)
Also, any info regarding a good place to start in the bond market would be nice.
Thanks
A: If you're talking about big, institutional traders like banks and insurance companies, they leverage their bond investments using a tool called a repurchase agreement. It's a way to pledge a bond as collateral against a loan used to buy the bond. But this tool isn't really available to individual investors. For individuals, if you want to leverage a bond investment, you are pretty much limited to margin loans from your broker.
The best place I know for good online information regarding getting started in bond investing is InvestingInBonds.com. See the link below. There are also numerous books on the subject. One you may want to look at is "The Bond Bible" by Marilyn Cohen.