What is a good EBITDA margin
Over 10%
What is a good P/E ratio
Lower than 15
What is considered a low float
10-20 million
Sometimes less than 1 million
Outstanding shares meaning
Amount currently authorized issued and purchased by people
Float
Amount available to get right now
What is Open Interest
Amount of contracts outstanding
What is a dark pool
Forum for institutions to trade without exposure until it’s been executed and reported. So people don’t get tip that they will buy beforehand and change price
A reverse split is the same as
Share consolidation
What is considered low cap
Anything below 1B
What is naked shorting selling
When someone sells shares to other people without actually owning or borrowing it.
Chore: Here’s your share!
Person: Thanks
Wait
Person: dang, here’s your share that I had to buy back at a higher price
Chore: Oh well, Thanks for paying me back
This causes harm to the company involved as it depresses the price of the stock
What is a good Debt/Equity ratio
1 to 1.5
What happens if doesn’t breakout for 2 or more days
squeeze finished
What does it mean if ticker has Q at the end
Bankrupt
derivative =
value is derived from another security
Equity risk premium
Expected return - Risk free return
What they expect to receive for taking on the risk
What affects D
PFICT
Price
Future price expectation
Income
Complements and Subs
Taste
Coin and Token difference
Coin is its own blockchain
Token utilizes a blockchain
What is a covered call
Sell a call but buy the stock instantly
Keep the premium
Option
contract that gives the holder the right but not the obligation to buy or sell an asset (literally any) at the strike price (predetermined price)
Share buyback reasons
- Shows they have faith in the company
- If they have extra cash then they can use it to buy shares as a way to distribute excess capital instead of dividends
- Offset share dilution from giving shares to employees
- Increase EPS metric
New shares issued
Outstanding Shares (Amount currently held) increased so EPS decreases as Profits shared over more people
Shows that they are in need of extra capital - sign of bad news
However if they have a good plan on how they are going to use the extra capital then good
What is Credit Risk
Possibility that the borrower will default on a loan
Debt pros + cons
- They don’t get ownership control
- Tax deductible
- Has to be repaid in full + Interest
- If can’t pay, Credit rating goes down + lose collateral assets
- Risk of default and bankruptcy
Equity Pros and Cons
- Doesn’t have to be repaid
- Investors bring expertise to help it grow
- Shared risk, everyone wants it to do well
- Shareholders get control of decisions
- Dilution of existing shareholders (like owners)
