Educational articles

How to tell if a stock is oversold?

by

When a stock is described as “oversold,” it means that its price has declined significantly and is considered by some investors or analysts to be trading below its intrinsic value or its recent average levels. This term often suggests that the stock may be due for a rebound or recovery, as the recent decline might have been exaggerated. However, it’s important to remember that being oversold doesn’t guarantee that a stock will recover soon. It simply reflects a situation where …

Read MoreHow to tell if a stock is oversold?

What are support and resistance levels?

by

Support and resistance levels are key concepts in technical analysis used to predict the price movement of securities. Here’s a breakdown of each: Support Level: Definition: A support level is a price point where a stock or other asset tends to stop falling and may even start to rise. It represents a level where buying interest is strong enough to overcome selling pressure. Function: At support levels, demand is usually high enough to prevent the price from falling further. Traders …

Read MoreWhat are support and resistance levels?

What is a block trade?

by

A block trade is a large transaction involving a substantial quantity of securities that is executed outside the open market. This is done to minimize the impact on the security’s price. These trades are typically negotiated directly between buyers and sellers, often with the assistance of a broker or trading desk. Size: Block trades usually involve a significant amount of securities, often worth millions of dollars. The specific size that qualifies as a block trade can vary by market and …

Read MoreWhat is a block trade?

What is the difference between a market crash and market correction?

by

A market correction and a market crash both involve declines in the market, but they differ significantly in scale and impact: Market Correction: Definition: A market correction is typically a decline of 10% to 20% from a recent peak in stock prices. Corrections can occur due to a variety of factors, including changes in economic conditions, shifts in investor sentiment, or external events. They are a natural part of market cycles and can help to bring overvalued assets back to …

Read MoreWhat is the difference between a market crash and market correction?

What is the VIX index?

by

The VIX index, formally known as the CBOE Volatility Index, is a popular measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. It is often referred to as the “fear gauge” or “fear index” because it tends to rise when investors are fearful or uncertain about the market’s future direction. Here are some key points about the VIX index: Definition The VIX measures market expectations of 30-day volatility for the S&P 500 index, derived …

Read MoreWhat is the VIX index?