Heroes and Villains of the Stock World

Share This: As the cliché goes, “Money makes the world go ‘round” and this has actually been particularly evident in the stock market world. While some were able to use the fame and fortune for good, others were simply lured by the glitz and glamor to feed their greed. Here are some of the heroes and villains in the stock world. Jordan Belfort If this name sounds familiar to you, then you have actually likely watched or read “The Wolf of Wall Street.” Jordan Belfort started his trading profession as a stockbroker at L.F. Rothschild where he had a taste of the luxurious lifestyle and began craving more. He soon founded the firm Stratton Oakmont which he ran as a “boiler room” of sorts, marketing penny stocks and illiquid securities to unwitting investors. According to investigators, Belfort and his traders engaged in “pump and dump” schemes that defrauded investors. In 1998, Stratton Oakmont was shut down by authorities and Belfort was charged along with 22 months in prison. He likewise had to pay $110.4 million in fines and fees. Martin Shkreli Martin Shkreli is infamously known for his role in Turing Pharmaceuticals’ 5,556% price hike for Daraprim, an antiparasitic drug used in the treatment of toxoplasmosis. He was referred by the media as “The Most Hated Man in America” and was indicated on several charges of securities fraud. Shkreli was knowledgeable in the biotech sector, profiting from shorting shares of companies ahead of substantial price drops. He founded Turing Pharmaceuticals in 2015, obtaining licenses from out-of-patent medicines and reevaluating pricing strategies, including that of Daraprim. The massive price increase was widely criticized, even by presidential candidates Hillary Clinton, Bernie Sanders, and Donald Trump. Jesse Livermore Jesse Livermore is often called Boy Plunger or the Great Bear of Wall Street, known for making and losing millions of dollars in short-selling stocks during the market crashes of 1907 and 1929. Early in his trading career, he put money in bucket shops which takes bets on stock markets without actually holding or selling the assets. Livermore was known for simply playing his hunches, shorting Union Pacific railroad right before the 1906 San Francisco earthquake. However, he lost a huge part of his fortune, along with some blaming his lack of adherence to his own trading rules as the main reason for his losses. In 1934, following a divorce from his then-wife Dorothy, Livermore was essentially bankrupt and was suspended as a member of the Chicago Board of Trade. In 1940, he shot himself in an apparent suicide in the cloakroom of a hotel in Manhattan. Bernard Madoff Of course, who could forget the infamous Bernie Madoff and his Ponzi scheme? Madoff actually started his firm to trade penny stocks on behalf of investors before eventually becoming one of the biggest market makers on Wall Street. He later on delved into asset management, creating hedge funds known as “Jewish Bond” and consistently making above standard gains. As soon as investigators got curious on how […]

The One-Hit Wonders of Finance

Share This: Charlotte Day, Head of Content and Social Media, easyMarkets A recent article published by Bloomberg showed that Pokemon Go,[1] a mobile app that recently swept the globe and led to a massive spike in Nintendo’s stock, was already in decline. In the financial markets, one-hit wonders like Pokemon Go are relatively common. In the following article, we look at modern stocks and take a trip down memory lane, recollecting some of the one-hit wonders of the world of finance we only wish we could forget. Fitbit Fitbit was all the rave a short while ago when consumer wearables were on the rise. However, Fitbit shares tanked earlier this year after the company reported disappointing quarterly earnings,[2] offering a clear sign that wearables lacked the staying power in an overcrowded consumer market. As it currently stands, the wearables market appears to have been a temporary fad with little upside. This is reflected in Fitbit’s corporate strategy, which is focused on maintaining market share as opposed to growing its relatively brand-new product offering.[3] GoPro Like Fitbit, GoPro has actually been hammered by the “one-hit wonder” label. After climbing to nearly $100 in the months after its initial public offering (IPO), the American technology company known for developing action cameras is trading at a fraction of where it was just two years ago. Clearly, wearables are no longer capturing consumers’ imagination. Groupon The jury is still out as to whether Groupon is a one-hit wonder, but its share price is down over 30% in less than two years. The global e-commerce marketplace company rushed to go public in 2012 when it was still considered the next big thing. Share prices opened near $25 and have been plunging ever since. There’s still some chatter on Wall Street about Groupon’s potential, but the company’s stock has actually been wavering for most of its existence. The company is trying to win back investors, with newly appointed CEO claiming that Wall Street “misunderstood” the retailer’s business model. Groupon users surpassed 50 million users globally in the most recent quarter, giving its enthusiasts a reason to be optimistic.[4] Presstek Luckily, you’ve probably never heard of Presstek – a small printing company that rose to prominence in the mid-1990s for its “revolutionary” printing technology. Its share price spiked to $80 in 1996, up from under $10 two years earlier. It turns out that the company’s claims of surging demand for its products were a tad exaggerated, leading the Securities and Exchange Commission (SEC) to launch an investigation into the company. The company’s stock would certainly later plunge 99%.[5] Pretty much any internet stock during the 1990s Pets.com, MyPoints.com and Boom.com were just some of the sizzling stocks that made their way through the financial markets during the dot-com boom. Pretty much any internet stock could see its valuation surge by merely adding “dot-com” to its title. Most of these companies were out of business by the time the dot-com bubble burst in 2000.[6] The dot-com era provides […]

Bullet Report: EURUSD surges after ECB, but no follow-through. Oil jumps 5%

Share This: Today’s calendar does not feature any important news releases. Therefore, the aftermath of the ECB conference will still be digested. The overall consensus of the meeting was that it was not fairly pessimistic, since rates were left unchanged and the Bank decided to keep the QE purchases at 80 bn a month. Price action in the markets was tight, as the EURUSD initially rebounded but then returned to pre ECB levels.  Currencies: EURUSD opened the day at 1.1232. reached 1.1330 highs before closing the day at 1.1267. the range in EURUSD is fairly tight along with this unlikely to modification until the FOMC meeting on September 21st. GBP/USD bounced along along with the Euro and rose to a higher of 1.3335. The Pound remains resilient overall, as recent UK economic data has actually been better than expected by numerous market participants. The Yen gained overnight, as news of a North Korea nuclear test led to a slight risk-off sentiment in markets. USD/JPY declined from 102.50 in the early Asian session to a reasonable of 102.00. Stocks: U.S. stocks on Thursday closed lower after the European Central Bank keeps key interest rates constant but disappoints some by not announcing additional measures to boost Europe’s sluggish economy. The S&P 500 closed down 4.86 points, or 0.2%, at 2,181.30, The Dow Jones declined 46.23 points, or 0.3% Oil and Gold: Oil prices jumped on the weekly Crude Oil Inventories Report , adding to gains made late Wednesday on similar data from the American Petroleum Institute. WTI futures for October settled at $47.62 per barrel, a gain of more than 4.%. Gold prices weakened briefly after U.S. first jobless claims decreased by 4,000 to a six-week reasonable of 259,000 from the previous week’s total of 263,000. Analysts expected jobless claims to rise by 2,000 to 265,000 last week. Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as much less of a threat to gold prices than a swift collection of increases. The post Bullet Report: EURUSD surges after ECB, but no follow-through. Oil jumps 5% appeared initial on Forex.Info.

Bullet Report: The reason for the USD slide and why it could continue

Share This: Yesterday’s ISM news release showed the biggest contraction in the services sector in the US since 2008. As per rough estimate the US Services sector amounts to about 70% of the US GDP, which gives some indication that coming Q/Q GDP numbers will suffer. As a result, the expectations for a September rate hike have actually now taken a massive hit as the FED has actually mentioned that rate hike paths are data dependent. Bank of Canada rate decision will be the main focus today and it’s widely expected to keep key interest rate unchanged at 0.50%. UK industrial and manufacturing production will be the main focus in European session.    Currencies: The USD experienced on the back of the weak ISM reading. Indicative is the fact that the GBP/USD closed above 1.34 for the very first time since the Brexit Vote. Sterling has actually been boosted by a string of strong data recently. USD/JPY took a nosedive since Fridays mediocre NFP report and is now trading 101.50 from 104+ on Friday. EUR/USD likewise rebounded strongly from 1.1140 to over 1.1260. Further direction for the USD index will now be the actual September FOMC meeting and the data that will lead until this event. Stocks: Stocks had an overall quiet session, along with the direction skewed to the downside. The Nikkei Stock Standard   was down 0.7%, after falling as much as 1% in early trade as the yen gained nearly 0.5% versus the U.S. dollar. A stronger yen reduces the competitiveness of Japan’s exports. U.S. stocks close higher Tuesday and the tech-heavy Nasdaq logs a brand-new closing high as investors digest a weak services-sector report, which might stay the Federal Reserve’s hand as it considers raising interest rates. Oil and Gold: Oil futures settled on a mixed note Tuesday, along with West Texas Intermediate crude ending at a one-week high and Brent crude finishing along with a loss as traders eyed a pact between the world’s two largest crude producers, Russia and Saudi Arabia, aimed at stabilizing the market. Gold increased its rise from Fridays $1304 levels to over $1350 on the back of a sliding USD. The post Bullet Report: The reason for the USD slide and why it could continue appeared very first on Forex.Info.

Trader Fact File Steven Cohen

Share This: Steven Cohen is an American hedge fund manager who was ranked by Forbes at the 106th richest man in the world for 2014 and the 35th overall in the United States. He is the founder of Point72 Asset Management and S.A.C. Capital Advisors. Cohen faced civil charges in 2013 for failing to prevent insider trading in S.A.C. Capital Advisors. He plead guilty to these violations, paid a $1.8 billion fine, and agreed to stop managing funds for clients until 2018. Still, he is known to maintain a net worth of $12.7 billion as of May this year. Apart from his triumph in trading and asset management, Steven Cohen is also a noted art collector and philanthropist. He and his wife have actually donated huge sums to hospitals, particularly to their pediatric units. In April 2016, he committed $275 million to creating mental health centers for veterans nationwide. Their foundation, aptly called Steve & Alexandra Cohen Foundation, gave a grant of over $100,000 to the Bruce Museum of Arts and Sciences to support arts education. Cohen pledged $30 million towards the research for drug-based therapies for post-traumatic tension and brain injury, on top of the funding he provided through the Brand-new York University Langone Center for research on those conditions. Career Cohen credits his willingness to take risks to his love of poker, which he played extensively in high school. He graduated with a degree in economics from the Wharton School at the University of Pennsylvania where he opened a brokerage account with $1,000 through the help of a friend. Cohen soon got a job in Wall Street as a junior trader in the options department at Gruntal & Co. Legend has actually it that he made $8,000 in profit on his very first day on the job then raking in $100,000 of profits a day, eventually managing a $75 million portfolio and a team of six traders. In 1992, Cohen started his own company called S.A.C. Capital Partners with $20 million from his own pocket. The firm managed $14 billion in equity as of 2009. Word through the grapevine is that his compensation amounted to $1 billion in 2005, double his $450 million salary from the previous year. In 2013, he joined the ranks of the Highest-Earning Hedge Fund Managers of Forbes. He was dubbed the “hedge fund king” in a Wall Street Journal article in 2006, ranking 94th in Time’s 100 list of most influential people the following year. Facts Cohen was implicated in an alleged insider trading scandal involving S.A.C. Capital’s ex-manager Mathew Martoma. He was not directly named in the 2012 indictment but was later on slapped a civil lawsuit because of supervisory oversight. Prior to this Cohen and his brother Donald were sued by his ex-wife Patricia for racketeering and insider trading, even though the case was dismissed since the claims were based mostly on speculation and rumor. These fraud claims were revived in 2013 by the US Circuit Court of Appeals in Brand-new […]

Bullet Report: ECB Rate Decision and Press Conference Today

Share This: Today’s main event is the ECB Meeting which is expected to remain on hold just like Australia and Canada did this week. Growth in the EU remains subdued and there is increasing stress to the ECB to act as reasonable inflation continues despite massive easing programs. The rate decision, will certainly be followed by a press conference along with ECB President Mario Draghi. A possible downgrade of economic forecasts is expected to additionally be communicated, something that could hurt the EUR. Currencies: Overall the USD still remains the weakest currency this weak as the market continues to pare back expectations on Fed hike along with futures pricing a 15% of September hike and 50.7% opportunity for December. EUR/USD opened in Asia 0.15% lower at 1.1245 after a quiet session overnight. The EUR market is extremely quiet ahead of the ECB announcement later today and the range of last days could remain the same if there are no changes from expectations. GBP/USD is flat at 1.3335, while AUD/USD is trading 0.55% higher at 0.7708 after positive China trade data. Stocks: The S&P and the Dow fell slightly on Wednesday, after a report from the 12 Federal Reserve districts had a modestly positive tone about the economy however noted that the presidential election is making some firms cautious about expanding activity. however the Nasdaq eked out a gain and closed at a record high as tech stocks rallied, helped in part by Apple. which rose 0.6% after unveiling the iPhone 7 at its flagship product event in San Francisco. Oil and Gold: Crude prices rebounded in Asia on Thursday as a major draw in U.S. stockpile estimates reported by an industry group lifted sentiment. The data showed a 12-million-barrel decrease in US crude oil supplies for the week of August 28. This appears to be the largest drawdown in crude inventories since the 12.4-million-barrel drop reported in March 2013. Overnight, gold prices were little changed near a three-week high in North American trade on Wednesday, as investors focused on the next set of U.S. data and Fed speakers for further tips on the timing of the next interest rate hike. The guide Bullet Report: ECB Rate Decision and Press Conference Today appeared initial on Forex.Info.

The Lesser Known Metals: How to Trade Base Metals

Share This: Evdokia Pitsillidou, Risk Associate, easyMarkets Very few people outside the investing globe know that base metals could be traded on the futures and options markets. Even within the trading community, metals trading is often synonymous along with precious metals – the glittery earth-rare commodities that are used as currency or other forms of payment. While gold and silver could be great way to diversify one’s portfolio, they are not the only metals that could be traded for profit. Base metals, which are sometimes referred to as industrial metals, refer to any metal other than precious metals.[1] They are extremely durable and much less prone to oxidization and corrosion when exposed to air and moisture, making them ideal for commercial and industrial applications. This additionally means they are much less shiny and more abundant than precious metals, which makes them far much less expensive than gold, silver and platinum. In the investing world, base metals are the much less talked about cousin of precious metals precisely for these reasons. The most common base metals traded in the financial markets include copper, lead and tin – metals that have actually been used for centuries and traded as commodities for a similar amount of time. Other base metal commodities like zinc, aluminum, steel and nickel were introduced into industrial applications later on. Base metals can be bought and sold on commodity exchanges all over the world. The London Metal Exchange (LME), Chicago Mercantile Exchange (CME) and Brand-new York Mercantile Exchange are considered the primary centres for metals trading.[2] along with the exception of copper, which is traded in pounds, base metals are traded in metric tonnes.[3] Why Trade Base Metals? Investors trade base metals for several of the same reasons they trade other types of commodities – to gain exposure to global markets and hedge versus future prices. For example, copper is widely regarded as the “metal along with a Ph.D. in economics” because its price is highly sensitive to global economic forces.[4] As we mentioned earlier, base metals are Pretty inexpensive compared along with precious metals, making them much more accessible in large quantities. Given their widespread use in primary manufacturing, base metal prices respond to changes in demand more so than precious metals such as gold. In this sense, base metal prices are linked directly to global economic and industrial events, making them easier to follow than other markets. How to Trade Base Metals There are several ways investors may trade the base metals market. Below are three of the most common. Futures and Options Contracts: Investors may buy and sell individual metals directly on the Comex, CME Globex and LME exchanges. Through options contracts, investors can initiate puts and calls, which give them the right to sell or buy respectively. Exchange Traded Funds (ETFs): There are several base metal ETFs that track futures prices as well as companies involved in producing base metals. For example, the PowerShares DB Base Metal Fund provides exposure to aluminum, zinc and copper […]

10 Risky Trades that Paid Off

Share This: In the financial market, it is often said that you should go big or go home. Along with higher risk comes the promise of higher rewards and some gamers didn’t hesitate to up the ante when the situation called for it, reaping huge returns on their correct market calls. Here are some of the riskiest traders that paid off.   Soros’ GBP Short At the top of the list is the legendary pound short trade of George Soros, popularly known as “The Man Who Broke the Bank of England” and made $1 billion in the process. Soros recognized the unfavorable position of the UK economy leading to its inclusion in the European Exchange Rate Mechanism so he decided to build a huge short position even if it meant borrowing large sums of money and putting his entire firm, Quantum Fund, at risk.   Corzine and European Bonds MF Global CEO John Corzine was known for his $6 billion dollar proprietary bet on European bonds in 2010 just when markets were anxious that countries in the region were on the brink of default. At that time, European bonds were extremely cheap, enticing Corzine to place a huge position that could’ve wiped out their firm five times over had it gone bad. This particular trade was met Along with concerns from the firm’s top executives and board members, but Corzine argued that the larger countries in the EU would certainly not let its fellow nations default. In a span of a few months, the trade grew from $1.5 billion to $6.3 billion.   Templeton’s Penny Stocks Considered one of the pioneers in trading, Sir John Templeton became known for investing $10,000 in shares of 104 companies trading for less than a dollar on the Brand-new York Stock Exchange. This position was pretty risky because it likewise included 34 companies that officially declared bankruptcy. However, within four years, this investment grew to $40,000 and gained enormous profits when the US economy picked up after World War II.   Livermore’s Market Crash Trade Jesse Livermore is likewise considered a Wall Street legend, making his famous stock market crash trade in the 1920s. Prior to this, he had likewise correctly predicted the stock market crash back in 1907 in which he made $3 million. His 1929 market crash trade made him worth $100 million, which means that he must’ve put a lot of money on the line to catch those returns.   Lippman and the Housing Bubble Similar to Livermore’s greatest trades, Greg Lippman’s riskiest and most profitable positions were likewise based on market crashes. In particular, he bet that the US subprime housing market was on the brink of collapse and made a whopping $1.5 billion in a single position. His story was documented in Michael Lewis’ The Big Short and Greg Zuckerman’s The Greatest Trade Ever. His colleagues even dubbed him “Bubble Boy” for correctly predicting that the housing bubble was about to burst.   Paulson’s Bet Versus the Housing Market […]

Hot Topic – UK pound and US dollar

Share This: Here’s what happened to the GBP: On Thursday, The Markit Purchasing Managers’ Index for the manufacturing sector came in at a higher than expected 53.3, while on Friday, the PMI for the construction industry additionally showed an increase to the previous month. Overall UK consumer confidence has actually additionally shown an increase. Following the release of Thursday’s manufacturing PMI the pound increased by 1.1% versus the US dollar, to 1.32737 and versus the euro, it increased by 0.7%. On a weekly basis, the GBP/USD increased by 1.3% & the EUR/GBP decreased by 1.7%. So although this week, the pound has actually proven resilient since the Brexit vote, it has actually dropped in value by more than 10% versus both currencies since the referendum. Across the Atlantic the US dollar has actually additionally been feeling the pinch: Last Friday’s NFP came in at a disappointing 155k versus an expectation of 188k While the unemployment rate remained unchanged at 4.9%, wage growth additionally disappointed along with a 0.1% rise versus an expectation of 0.2% The Dollar dropped as a result but recovered quickly. Overall the dollar index ended the week slightly lower at 95.88. Expectations for a rate hike decreased for both September & December, & numerous analysts are expecting the Fed to put any decision on hold until the presidential elections in Nov. Coming up this week we have: One of the crucial economic releases of the week – the EU interest rate decision on Thursday at 11:45 GMT. The ECB has actually left interest rates unchanged during their last meeting but said that it would certainly be ready to intervene along with additional stimulus measures in case that the UK’s decision to leave the EU would certainly begin to weigh on the Eurozone’s economy. The post Hot Topic – UK pound and US dollar appeared first on Forex.Info.

Bullet Report: Why OIL Jumped 5% Yesterday

Share This: Today’s financial calendar is thin but focus will be on the ISM non-manufacturing index for August. Yesterday we saw a sharp increase in the UK PMI service index which jumped from 47.6 to 52.9 back to pre-Brexit levels. Overnight, RBA left rates unchanged, which resulted to AUD/USD maintaining this week’s gains.    Currencies: EUR/USD is one of the weakest major currencies this week ahead of the ECB policy decision where expectations as to the announcement of additional stimulus is divided. Overall the USD trimmed some losses versus other major currencies in a quiet trading session, even though Friday’s bad NFP data, pressured initially the USD. The disappointing data lowered chanced for a near term rate hike, as FED officials indicated that the pace of interest rate increases will depend on data. Stocks: US stocks were closed on Monday for Labor day. Asian shares traded narrowly along with Australia down and Nikkei as well as Shanghai slightly higher at 0.19% and 0.02% respectively. Oil and Gold: Crude oil jumped yesterday after an announcement from Saudi Arabian and Russia said that they would certainly set up a working group to monitor the oil market and come up along with recommendations to promote stability. On Friday, crude settled 3% higher after Russian President Vladimir Putin said that an agreement between major oil exporters to freeze output would certainly be the right decision to support the market. Gold continued to build on its gains ever since touching $1308 Support Level on Friday. In thin holiday trading, gold prices were trading at $1330, up more than $20 since the release of NFP. The write-up Bullet Report: Why OIL Jumped 5% Yesterday appeared initial on Forex.Info.