A stop loss is an order to buy a security once the price of the security climbed above a specified stop price. Stop loss is a stage you prefix for any trade to conclude to minimize your loss. When the price touches the prefixed stage, automatically transaction will be concluded at that point without your taking any action. It is very important in stock trading to have stop loss. Most of the traders are making loss from overnight positions, which are not protected by reasonable stop losses. Another reason for making loss is to take an intra-day position carrying over it to the next day without exiting, if the position moves against his expectation. So before entering into a trade, the trader should decide whether the trade is intraday or overnight, and then should place proper stop loss to protect the investment. A stop loss order is placed under the current market "bid".
Fixed Stop Loss involves placing a stop loss at a fixed support level. In the case of Trailing Stop Loss, a stop loss is placed at a fixed support level, which is adjusted according to the predictable movement of the commodity. According to the nature of movement of the market, stop loss can be tight or liberal. In a most unstable market, more pull or more room for the underlying commodity to move is ideal. If you think it might possibly move up but will definitely drop if it slips below a certain price, then a tight stop loss strategy is a must. You also need to take a tight stop loss strategy if you are trading in a choppy and unclear market.
STOCK MARKET ARTICLES
What is the role of Stop loss in Stock Marketing?
What are the benefits of Branding?
Strong brand are clear about what they are not. They understand their unique promise of value sets them apart from their competitors. When the product or producer of an enterprise are marketed with a particular brand , it makes very easy for the enterprise to advertise its product because the enterprise can use the name of brand in its advertisement message . Use of brand is also helpful in the identification of products. In this The producer can advertise their products with their brand and consumer can identify such as product easily .producer can create a separate market for their products if they use a particular brand because the use of a particular brand differentials these product from others.
Branding also help easy to expand the product mix , if the brand of the producer is very popular in the market and the demand of such product is quite encouraging , the producer may decided to expand his product mix . he can add new product lines to his product mix or he can add new product item to his existing products line .it does not create any difficulty for the producer to create demand for these new products because his brand has already got popularity among the consumer . Branding also create the personal contacts with consumers
What is the Inventory management in marketing?
Inventory management is concerned with keeping enough product on hand to avoid running out while at the same time maintain a small sufficient inventory balance to allow for a responsible return on investment .proper inventory management is important to the financial health of the corporation , being out of stock forces customers to turn to competitors or result in a loss of sale .on the other hand inventory is difficult to manage because it crosses so many lines of responsibility .Inventory proportionality is the goal of demand-driven inventory management.
The secondary goal of inventory proportionality is inventory minimization. Accurate demand forecasting also allows the desired inventory proportions to be active by formative expected sales out into the future and this allows for inventory to be in proportion to expected short-term sales or consumption rather than to past averages, a much more accurate and optimal outcome. The technique of inventory proportionality is most appropriate for inventories that remain hidden by the consumer. The marketing manager is responsible for selling the product and want to minimize the chance of running out of inventory . funds invested in inventory are idle and do not earn a return .
What are the role of future & option in stock marketing?
Interest rate futures contracts , and options on these contracts , can be used in two ways to hedge risk in cash forecast . The hedging is basically belonged to the buying & selling. like the purchase of a future contract in anticipation of investment , similar to the investment case , the use of option on futures enable the firm to profit from chance interest rate movement . they can be used to hedge the interest rate risk on future borrowing and investment or they can be used to hedge the interest rate risk inherent in investing in longer time instruments where an unexpected cash shortage may lead to selling these instrument before maturity .
lets us first consider the hedging of interest rates on future expected , borrowing and investing . To hedge the risk of change in interest yield on investment , the firm may purchase a financial future in investment instrument , because the use of a future contract to hedge the interest rate of a future investment precludes the firm from investing should rates fall , some firms use options on futures contract to hedge future investment even though there is an out of pocket cost to use the option .
What are Marketable securities?
This section present brief description of the most commonly held marketable securities held for transaction and safety motives , securities held for a speculative motive are often long-term , less marketable issues that will not be discussed here . Marketable securities are investments that are highly liquid, meaning that they can be quickly sold in the secondary financial markets in large amounts for cash. A company might invest in these types of securities as a way to preserve cash for surprising events. Investors also select these short-term investment vehicles to seize certain opportunities in the financial markets. The security most commonly held as the part of the marketable securities portfolio are divided in 2 groups , first is governmental issues , second is non- governmental issues .
This is a sign of liquidity. Bonds are debt instruments, while certificates of deposit are savings certificates, although both pay investors an interest rate over the life of the contract. These securities trade in the secondary market, a segment of the financial markets where previously issued securities are bought and sold. Cash is a type of marketable security, and it can be held in a checking or savings account, because both allow for quick access to capital. Money market instruments are another common type of marketable securities, although features might vary depending on the region in which they're purchased..
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