Loading...
Home2018-05-14T12:08:11-04:00

The Global Market Update is curated by Douglas Tengdin, CFA an employee of Charter Trust Company.
The opinions expressed herein are those of the author and do not necessarily represent the views of Charter Trust Company.
Investments may involve investment risk, including the possible loss of value.

Dreamland

By |July 5th, 2019|

Are market changes real changes? Dreams of World War 1 soldiers, by Jan Styka. Source: Lublin Museum There’s a common understanding that market gains or losses aren’t real gains or losses—they’re only “on paper” until the investor sells the stock, making them “real.” But that’s a cognitive error—a kind of egocentric bias that says that something is only real if it affects me. In fact, [...]

Spirit of ‘76

By |July 3rd, 2019|

Is the market rigged? “Spirit of ‘76” by A.M. Willard. Source: Wikipedia People are concerned about the structure of the market. Some folks looked at how stock market trades are executed and it seems like the markets are rigged, that insiders use fiber optic lines and special privileges get inside the market and game the system. It looks like they profit at the expense of [...]

Getting Scared?

By |July 1st, 2019|

Is this market scary or is it dangerous? “The Scream” by Edvard Munch. Source: National Gallery of Norway Scary things can hurt us, but they aren’t very common: shark attacks or terrorism or radiation poisoning. We read news stories about them and we get worried. Dangerous things are things we tend to ignore but do long-term damage more often that you think: like avoiding your [...]

Considering Our Options (Part 5)

By |June 28th, 2019|

Can options explain strategy? Gridiron quarterback option play. Source: Wikimedia. Public Domain. Options are choices. Strategy is acting on our choices. When a company decides to lay off workers and focus on an online platform, they’re exercising a real, strategic option. When the market falls and investors exercise protective puts on S&P 500 futures, they’re exercising financial options. When professionals “dress for success” and [...]

Considering Our Options (Part 4)

By |June 27th, 2019|

Can options help us understand how investments work? Source: Option-Price.com Sure they can. Options are choices: the right, but not the obligation, to buy or sell something. When you combine investment options with other instruments, you can see how the combination explains how another investment works. First, we need a quick course on option pricing. An option price has four major components: the stock [...]

Keeping Our Options Open (Part 3)

By |June 26th, 2019|

Where do we find options in every life? Chrome browser settings. Source: Ctrl blog Options are choices. They represent the ability, but not the obligation, to buy or sell something. Financially, we know that options are complex instruments that have strike prices, an implied leverage and time-decay. They’re priced according to a complex formula that only folks with high-powered math or finance degrees really [...]

Keeping Our Options Open (Part 2)

By |June 25th, 2019|

Can we use options to invest? Illustration: Koltepranita. Source: Wikipedia Options are powerful. And there’s a lot to understanding them. Call options give us the right, but not the obligation, to buy something at a specific price within a certain time. They don’t cost as much as the underlying stock, but they benefit just as much when the price goes up. As a result, [...]

Keeping Our Options Open (Part 1)

By |June 21st, 2019|

What are options? Source: Pxhere. CC0 Strictly speaking, options are choices: the choice to buy, sell, or hold; the choice own or rent a home; the choice of what to plant in the garden. Having options means we have the ability to make – or not make – choices about our lives. Financially, though, options have a very specific meaning. An option on a stock [...]

Window Dressing

By |June 21st, 2019|

It’s almost quarter-end. Do you know where your sales are? Photo: Birgit Böllinger . Source: Pixabay When quarter-end rolls around, everybody wants to make things look nice. But new flowers in the window boxes won’t change the rot that may be hiding in the window casings. At quarter-end, many public companies try to dress up their financials. They increase the amount of cash on [...]