An investment climate marked by skeptical investor behavior. A skittish market might occur following a significant downturn, when the market appears to have recovered but investors remain fearful and hesitant to buy in because they either don’t believe that economic conditions have really improved or because they are afraid of the next downturn and want to avoid it by staying out of the market. Taobiz explains Skittish Market Investors who get carried away by current market conditions and allow their emotions to influence their behavior more than the numbers tend to act irrationally and against their best interests. To overcome the tendency to buy when the market is up and sell when it’s down, successful investors like Warren Buffett recommend choosing stocks that are momentarily underpriced compared to the underlying value of the company and holding those investments for the long term.
A design used to show how companies or industries are affected by external factors. The six-force model expands on Harvard Business School professor Michael Porter's five-force model with the addition of "complementors," or companies that produce closely related products or services, as a sixth factor. Taobiz explains Six-Force Model The five-force model on which the six-force model is based describes the impact of existing rivals, bargaining power of customers, bargaining power of suppliers, substitutes and new entrants on a business or industry's success. These models can be used to analyze a business or industry's current position and its competitive advantage (or lack thereof).
Switerzland's primary stock exchange, located in Zurich. The SIX Swiss Exchange trades Swiss government bonds, stocks and derivative products such as stock options. The SIX Swiss Exchange is among the world’s 20 major stock exchanges. Taobiz explains SIX Swiss Exchange The SIX Swiss Exchange was formerly known as the SWX Swiss Exchange, and was the first stock exchange to support fully automated trading, clearing and settlement (1995). Switzerland’s other exchange is the Bern eXchange (BX).
A stock with a price that is below $10 per share. Although there are many large companies that trade below $10 per share, "single-digit midget" is a buzz word usually used to describe stocks of companies which have seen a price drop from much higher levels. This term was widely used after many dot-coms' prices dropped severely in the early 21st century. Taobiz explains Single-Digit Midget A recently designated single-digit midget could be considered more speculative due to the potentially large fluctuation in price levels. New stock issues that are single-digit midgets could also be considered more speculative because they are subject to limited listing requirements, along with fewer filing and regulatory standards, due to their smaller market capitalization.
A sideways market occurs where the price trend of a certain trading instrument, such as a stock, has been experiencing neither an uptrend nor a downtrend. Instead, the price activity has been oscillating between a relatively narrow range without forming any distinct trends. A sideways market is said to be trading in a horizontal range or channel, with neither the bears nor the bulls taking control of prices. Taobiz explains Sideways Market / Sideways Drift Market participants can exploit a sideways market by anticipating breakouts, either above or below the channel formed during the sideways market. Sideways markets are also referred to as choppy or non-trending. If the sideways drift is expected to remain for a long period of time, investor can earn profits by selling options with approaching expiration dates.
A company with a large number of assets tied up in projects with uncertain returns. Taobiz explains Speculative Company The projects that a speculative company is participating in have a high probability of failure. However, should a project succeed, potential returns can be very large. Oil companies are an example of a speculative company, since they are continuously committing a large number of assets to exploration projects. These companies often experience many failures before a project succeeds. However, should they find oil, potential returns are huge. The stock of speculative companies is not necessarily classified as speculative stock, since the expected return of an established speculative company's stock (such as Exxon Mobil Corp or Shell Canada) can be reasonably estimated.
The funds earmarked by an investor for the sole purpose of speculation. This capital is often associated with extreme volatility and a high probability of loss. Most speculators have short-term investment horizons and often use high degrees of leverage in their efforts to obtain profits. Taobiz explains Speculative Capital Given the above average probability of loss in speculative trading, it is critically important to exercise good risk management and not become emotionally attached to a certain trade. It is not uncommon to see novice investors hold onto a position until it loses nearly all of its value. Given their limited experience, rookie traders should regard all their tradable capital as speculative capital. In other words, they should only invest whatever amount of money they can afford to lose without their way of life being materially affected.
A member of an exchange who acts as the market maker to facilitate the trading of a given stock. The specialist holds an inventory of the stock, posts the bid and ask prices, manages limit orders and executes trades. Specialists are also responsible for managing large movements by trading out of their own inventory. If there is a large shift in demand on the buy or sell side, the specialist will step in and sell out of their inventory to meet the demand until the gap has been narrowed. Taobiz explains Specialist There is usually one specialist per stock who stands ready to step in and buy or sell as many shares as needed to ensure a fair and orderly market in that security.