Miro Zecevic

  What is a derivative? A financial instrument based on another asset is known as a derivative. Stock options and commodities futures are two of the most common examples of derivatives, and you've definitely heard of them but aren't sure how they operate. Derivatives allow consumers the option — but not the duty — to acquire or sell an underlying asset at a later date. The underlying asset and the period until the contract expires determine the derivative's value. How Financial Derivatives Work Financial derivatives are financial products whose value is determined by one or more underlying financial assets, such as stocks, bonds, commodities, currencies, or interest rates. Investors engage in contracts with stated terms, such as the period of the contract and the consequent values and definitions of the underlying assets, to purchase and sell derivatives. Futures, options, swaps, and forwards are examples of financial derivatives. Futures and options are often traded on the...

  - An angel investor is typically an individual or a high worth individual investor who provides funding or financial support for start-ups in lieu of a stake in ownership in the company. - They are usually among the family or relatives of the entrepreneur. - Apart from investing money, angel investors share their knowledge at the critical stages. Advantages: - Financing from angel investment is much less risky than taking loans. - Capital needs are met by angels. - Generate large number of jobs. - Reinvests the return. - Angels bring portfolio expertise such as business acumen, vertical expertise, director service etc. - Angel-funded firms are likely to survive at least four years. - Angels do not demand high monthly fees. Disadvantages: - There is a loss of complete control as an owner. - It is quite hard to find a suitable angel investor. - They provides less structural support than an investing company. - Angels rarely make follow on the investments. - There is a possibility o...

 1. Broker      Someone who's mastered all the math and financial jargon so you don't have to. Work with them to create a portfolio that matches your goals. 2. Capital     What you're worth. Right now, that might just be $500 in your bank account, but it also includes other wealth (like investments, stocks, bonds...) 3. Capital Appreciation:     When you sell stocks at a profit, you're money-literally. Appreciate the appreciation. 4. Certificate of Deposit (CD):     A fancy alternative to your savings account that pays interest-except you can't take the money out until a set maturity date. 5. Dividends:     As companies grow, some share their profits with stockholders in the form of money or more stock. Dividends aren't always included though (so read the fine print). 6. Investment Risk:     Every product, whether it's stocks in Apple or a carefully invested IRA, could lose you money. It'...

  Securities and Exchange Commission (SEC) is independent U.S federal agency that regulates the stock market. It was created in 1934 by Congress to help restore investor confidence after the 1929 stock market crash. The Securities Exchange Act of 1934 was created by Securities and Exchange Commission. It govern securities transaction on the secondary market relying on Securities Act of 1933 which increased transparency in financial  statements and  established  laws against fraudulent activities. In essence SEC provides transparency by ensuring accurate and consistent information about companies that allows investors to make informed and sound decisions. Without transparency stock market would be vulnerable to market speculation and creation of asset bubbles.  Securities and Exchange Commission has five  commissioners and five different divisions: Division of corporate finance - review corporate filing requirements ensuring that investors have complete...

Due Diligence - basics  Due diligence is defined as investigation or audit that reasonable business and person undertakes before potential investment or before entering an agreement to confirm all facts. Most investor are doing research before buying a security but due diligence can be done by a seller who investigates buyer's capability to complete the purchase. After the Securities Act of 1933 due diligence become common practice in United States when brokers and dealers became responsible for disclosing all relevant information about securities they were selling or they will otherwise be accountable and liable for prosecution. This put brokers into sensitive position where they could be unfairly prosecuted. In response creators of the Act set rule that says if broker performed due diligence when investigating companies whose securities they are going to sell and disclose that information to the public they are not held accountable. Not only prospective investo...

What is an Initial Public Offering? When a private company first offers shares of its stock (ownership) for purchase to the general public, this is known as an initial public offering (IPO). Goals and Reasoning  There are a few main reasons why a private company will decide to make an IPO: - Raise expansion capital - Monetize the investments of early private investors. - Become a publicly traded company on a securities exchange - Gain credibility and prestige The Process When a company is ready to offer shares of its stock to the public, there are a few major steps involved: Step 1: Company hires an investment bank (underwriters). Step 2: The investment bank puts together a registration statement to be filled with the SEC. This document contains information about: - The offering - Financial statements - Management background - Any legal problems - Where the money is to be used - Insider holdings Step 3: The SEC then requires a cool...