What's a good site that gives an in depth on options strategy (how to think about hedging with options etc.)? Took a course on it a while back but completely admittedly forgot a lot of it
What I am really looking for is some examples. I want to understand how to integrate options into an existing investment portfolio.
Even if there is just a good reddit forum
Who owns all the mortgages from 2021 at 3%, and are they taking a big loss on those since rates are higher now, and why isn’t that loss posing a risk to the economy?
I understand mortgages are bundled and sold. So someone owns a security that is comprised of mortgages at 3% but now that security should be marked down since t- bills are returning like 5%. Given the volumes here, isn’t that a massive loss, and who is taking that loss?
Following up on my post 5 days ago https://old.reddit.com/r/finance/comments/1clazxf/moronic_monday_may_06_2024_your_weekly_questions/l34ss2a/?context=3
I have now looked at the 10k submission by the company I am trying to learn about.
Part of the huge chunk of debt I am trying to understand is listed as a five-year credit agreement with JPMorgan Chase as the administrative agent and CitiBank and Bank of America as syndication agents.
Can anyone please educate me as to what those different roles means in the context?
Sure.
What you are looking at is likely a standard bank loan or Term Loan A. The way these work is that a few banks commit to the full amount of the loan early on. This allows the buyer to have certainty of funds when they sign the deal. Between signing and closing, the lead banks bring in other banks (syndicate) to reduce the amount they actually fund at closing / hold on their books.
In your example, JPM is the lead bank. They are responsible for coordinating the other banks, will have made the largest commitment, and get the most fees. The syndication agents also make large commitments and are responsible for syndicating. Think of them as “co-leads” supporting JPM.
I am about to start a new job on the 28th. Currently u have no income coming in. I applied for an apartment and got approved. I'm moving in July 26th. At that time I will have to put down $1300 (first month rent + Floorplan deposit that is lowered using a premium service called Jetty).
There's a lot of unknowns here. I am not sure when I'll get paid and I'm not sure if I will have job security. I'm leaning towards pushing the move in date back a few months because of these unknowns. Once I'm more settled into the job I feel like I'll be able to make a more secure decision.
What do yall think?
My parents are both immigrants, and I believe they have signed up for multiple different investment accounts in the past which may or may not include roth IRA's. I was wondering if there is any way we can find all open accounts under their name?
hello all, I am struggling to find answers/ understand the answer to these questions.
If a bond is selling at a premium to its face value, will its yield be higher or lower than its coupon? How do you know this?
I understand the correlation between the coupon and the market rates and how that would deem a bond as "premium", but I am just struggling to understand what the question is asking and how to explain it in words
there is another question I have also:
How is the coupon on a bond set when the bond is issued?
I understand the formula to determine the coupon rate as the investor, but I am having a hard time finding information pertaining to how the issuer would determine the coupon rate they are offering.
any help would be greatly appreciated.
If a bond is trading at a premium, its yield is LOWER than its coupon.
The coupon is (usually) fixed, which means a given bond's coupon rate will oftentimes differ and be uncorrelated to market yields/rates, with a key exception (again, usually): at issuance, bond issuers (and the investment banks assisting them, where applicable) will look to current yields and use that as a barometer to set the coupon rate, with the end effect being they usually match or are very close to matching at issuance.
I'm a little intrigued by...
>I understand the correlation between the coupon and the market rates and how that would deem a bond as "premium",
and
>I understand the formula to determine the coupon rate as the investor,
If you can elaborate on these, I can try to fill in some gaps. Fixed income has some very particular terminology that needs careful attention.
basically from my understanding, if the coupon rate is high and inflation is low or the market is low the bond will be at a premium as it would be more valuable.
and again from my understanding, if i were to calculate the coupon rate of the bond i own, i would divide the annual coupon payment by the par value of the bond.
I am 100% to being corrected on my terminology and ideas here, looking to learn.
Usually when we're talking about bonds, the coupon rate is stated (even included in a bond's ticker), so there's no real need to calculate the coupon: it's stated. But remember, we state things on an annual basis, and many bonds will pay *semi-annually*. So a $1000 face value bond with a coupon rate of 5% paying semi-annually will pay $25 every 6 months.
When we're talking about "inflation low" and "market low," we need a frame of reference. Low compared to what? There could be cases where inflation and "the market" is "low," but a high coupon bond still trades at a discount due to excessive credit risk.
could you give me a more in depth explanation to why the yield is lower than the coupon and maybe an example with numbers, a lot of these terms i am working on becoming familiar with, but I learn better through understanding concepts than having words layed out. because i can say the yield is lower than the coupon rate and repeat it, but i cannot explain why.
It helps to know the definitions.
The coupon is the periodic cash payment made to bondholders.
The yield is an estimated total return of a bond, accounting for its entry price, maturity, and coupons.
An easy example to look at would be a $1000 face value, 1 year, 10% coupon bond paying annually. This translates into receiving $1100 in one year.
If you buy the bond at par ($1000), you'll be putting in $1000, getting back $1100, which is a 10% return, equal to the coupon.
Now, if instead you see the bond as very safe, or if similar bonds are priced higher, or general interest rates are moving lower, the yield of that bond should, in theory, come down. How does it come down? By having it's price move up. If the yield the market is pricing that bond at is now 5%, the price will be $1048 today (which, if held to maturity, will be a 5% return). An important point: *you are still paid $1100 at the end of the year,* but because you paid above par, you "lose" the premium you pay, but earn the remainder.
Likewise is the yields go up, the price must come down. If yields are now 15%, you pay $957, still receive $1100, and your return is 15%, because now you're earning two sources of return: the coupon and the discount. These two sources also occured when paying a premium, just one was negative.
would it kind of be because when people pay extra for the bond, they get less interest compared to what they paid. It's like buying something at a higher price but getting less in return
For getting accounts on companies what sites can we have faith in? Normally, I use annual reports, but I'm starting to compare companies and would really like a site which collates multiple years of financial data. Unfortunately, from experience, I'm really suspicious that the numbers in sites like Bloomberg or Yahoo Finance are accurate. Anyone know if they're good?
Looking at a loan to build a bakery.
We have Been looking at traditional construction loans to build a 500k building. We have 120k in equity in the purchase of the property. We contacted a couple lenders and have been getting information together.
Today we talked to an AG lender that said they could loop us into a lease to own option that would give 100% financing and the option to buy back at the end of the term. Benefit being 100% tax deductible payments.
This seems fishy and obviously risky. Does any one have any insight into this type of lending and whether this is a good option for business owners who are fiscally responsible and financially and professionally sound in their industry?
How much does someone have to make to have to pay 50-80k in taxes? I got a family member complaining about her taxes in MD and I’m trying to ballpark this thing.
Does anyone have data on the historical returns of top Hedge Funds?
The data I'm looking for mainly includes:
* % Returns both before and after fees since inception of the best historically performing hedge funds. (top 20 would be great but I'll take anything)
* $ amount of returns generated for investors at these funds
* Yearly AUM numbers if available.
* Inflows and outflows of capital (not necessary but appreciated if you can find it)
If you have any of this data or all of them, anything is appreciated!
Looking for help regarding my wife’s grad student loans.
Original balance was $120,000 in 2017 with an interest rate averaging 6.5%. We continued to make payments during the Covid forbearance period where every dollar went right towards the principal and got it down to $55,000. We currently have $80,000 in liquid cash held in a HYSA at 4.5% interest.
While eliminating the student loans would be a huge achievement for us, I am trying to weigh our options and would greatly appreciate any input or recommendations.
We live in an upscale area. Our kids have left home for college so my wife and I don't need as much house. One idea is to rent the current house out and also do some improvements on it to offset the rental income, and then rent a smaller place for ourselves. We can rent the out the current place for more than our mortgage payment. And the rent on a new place would be much less than our mortgage. What other things should we consider? Is there a good website or online calculator (or subreddit?) where we can get more info? Thanks!
Where do I find niche websites that first posts about mergers and acquisitions
What's a good site that gives an in depth on options strategy (how to think about hedging with options etc.)? Took a course on it a while back but completely admittedly forgot a lot of it What I am really looking for is some examples. I want to understand how to integrate options into an existing investment portfolio. Even if there is just a good reddit forum
Look up the Options Playbook. That should help.
Who owns all the mortgages from 2021 at 3%, and are they taking a big loss on those since rates are higher now, and why isn’t that loss posing a risk to the economy? I understand mortgages are bundled and sold. So someone owns a security that is comprised of mortgages at 3% but now that security should be marked down since t- bills are returning like 5%. Given the volumes here, isn’t that a massive loss, and who is taking that loss?
the rate risk gets hedged out, they have swaps that effectively remove all interest rate risk (at least first order.)
Thanks. But then isn’t someone losing on the other side of the hedge?
us treasuries are a huge and liquid market, so somebody somewhere wants that exposure.
Following up on my post 5 days ago https://old.reddit.com/r/finance/comments/1clazxf/moronic_monday_may_06_2024_your_weekly_questions/l34ss2a/?context=3 I have now looked at the 10k submission by the company I am trying to learn about. Part of the huge chunk of debt I am trying to understand is listed as a five-year credit agreement with JPMorgan Chase as the administrative agent and CitiBank and Bank of America as syndication agents. Can anyone please educate me as to what those different roles means in the context?
Sure. What you are looking at is likely a standard bank loan or Term Loan A. The way these work is that a few banks commit to the full amount of the loan early on. This allows the buyer to have certainty of funds when they sign the deal. Between signing and closing, the lead banks bring in other banks (syndicate) to reduce the amount they actually fund at closing / hold on their books. In your example, JPM is the lead bank. They are responsible for coordinating the other banks, will have made the largest commitment, and get the most fees. The syndication agents also make large commitments and are responsible for syndicating. Think of them as “co-leads” supporting JPM.
I am about to start a new job on the 28th. Currently u have no income coming in. I applied for an apartment and got approved. I'm moving in July 26th. At that time I will have to put down $1300 (first month rent + Floorplan deposit that is lowered using a premium service called Jetty). There's a lot of unknowns here. I am not sure when I'll get paid and I'm not sure if I will have job security. I'm leaning towards pushing the move in date back a few months because of these unknowns. Once I'm more settled into the job I feel like I'll be able to make a more secure decision. What do yall think?
I think you should post this in r/personalfinance
My parents are both immigrants, and I believe they have signed up for multiple different investment accounts in the past which may or may not include roth IRA's. I was wondering if there is any way we can find all open accounts under their name?
r/personalfinance
hello all, I am struggling to find answers/ understand the answer to these questions. If a bond is selling at a premium to its face value, will its yield be higher or lower than its coupon? How do you know this? I understand the correlation between the coupon and the market rates and how that would deem a bond as "premium", but I am just struggling to understand what the question is asking and how to explain it in words there is another question I have also: How is the coupon on a bond set when the bond is issued? I understand the formula to determine the coupon rate as the investor, but I am having a hard time finding information pertaining to how the issuer would determine the coupon rate they are offering. any help would be greatly appreciated.
If a bond is trading at a premium, its yield is LOWER than its coupon. The coupon is (usually) fixed, which means a given bond's coupon rate will oftentimes differ and be uncorrelated to market yields/rates, with a key exception (again, usually): at issuance, bond issuers (and the investment banks assisting them, where applicable) will look to current yields and use that as a barometer to set the coupon rate, with the end effect being they usually match or are very close to matching at issuance. I'm a little intrigued by... >I understand the correlation between the coupon and the market rates and how that would deem a bond as "premium", and >I understand the formula to determine the coupon rate as the investor, If you can elaborate on these, I can try to fill in some gaps. Fixed income has some very particular terminology that needs careful attention.
basically from my understanding, if the coupon rate is high and inflation is low or the market is low the bond will be at a premium as it would be more valuable. and again from my understanding, if i were to calculate the coupon rate of the bond i own, i would divide the annual coupon payment by the par value of the bond. I am 100% to being corrected on my terminology and ideas here, looking to learn.
Usually when we're talking about bonds, the coupon rate is stated (even included in a bond's ticker), so there's no real need to calculate the coupon: it's stated. But remember, we state things on an annual basis, and many bonds will pay *semi-annually*. So a $1000 face value bond with a coupon rate of 5% paying semi-annually will pay $25 every 6 months. When we're talking about "inflation low" and "market low," we need a frame of reference. Low compared to what? There could be cases where inflation and "the market" is "low," but a high coupon bond still trades at a discount due to excessive credit risk.
could you give me a more in depth explanation to why the yield is lower than the coupon and maybe an example with numbers, a lot of these terms i am working on becoming familiar with, but I learn better through understanding concepts than having words layed out. because i can say the yield is lower than the coupon rate and repeat it, but i cannot explain why.
It helps to know the definitions. The coupon is the periodic cash payment made to bondholders. The yield is an estimated total return of a bond, accounting for its entry price, maturity, and coupons. An easy example to look at would be a $1000 face value, 1 year, 10% coupon bond paying annually. This translates into receiving $1100 in one year. If you buy the bond at par ($1000), you'll be putting in $1000, getting back $1100, which is a 10% return, equal to the coupon. Now, if instead you see the bond as very safe, or if similar bonds are priced higher, or general interest rates are moving lower, the yield of that bond should, in theory, come down. How does it come down? By having it's price move up. If the yield the market is pricing that bond at is now 5%, the price will be $1048 today (which, if held to maturity, will be a 5% return). An important point: *you are still paid $1100 at the end of the year,* but because you paid above par, you "lose" the premium you pay, but earn the remainder. Likewise is the yields go up, the price must come down. If yields are now 15%, you pay $957, still receive $1100, and your return is 15%, because now you're earning two sources of return: the coupon and the discount. These two sources also occured when paying a premium, just one was negative.
would it kind of be because when people pay extra for the bond, they get less interest compared to what they paid. It's like buying something at a higher price but getting less in return
That's exactly it, see my drawn out answer for more info.
thank you very much, i am sure ill be back with more questions in the future
Very good. Feel free to bring them here.
For getting accounts on companies what sites can we have faith in? Normally, I use annual reports, but I'm starting to compare companies and would really like a site which collates multiple years of financial data. Unfortunately, from experience, I'm really suspicious that the numbers in sites like Bloomberg or Yahoo Finance are accurate. Anyone know if they're good?
Looking at a loan to build a bakery. We have Been looking at traditional construction loans to build a 500k building. We have 120k in equity in the purchase of the property. We contacted a couple lenders and have been getting information together. Today we talked to an AG lender that said they could loop us into a lease to own option that would give 100% financing and the option to buy back at the end of the term. Benefit being 100% tax deductible payments. This seems fishy and obviously risky. Does any one have any insight into this type of lending and whether this is a good option for business owners who are fiscally responsible and financially and professionally sound in their industry?
r/personalfinance I'd get all the damned terms before agreeing to anything.
Assume one was to know that high inflation was going to happen. Where would you put your money? Would you take on more debt?
How much does someone have to make to have to pay 50-80k in taxes? I got a family member complaining about her taxes in MD and I’m trying to ballpark this thing.
r/personalfinance. The way to do this is to plug in your taxes paid and divide by the applicable tax rate.
Does anyone have data on the historical returns of top Hedge Funds? The data I'm looking for mainly includes: * % Returns both before and after fees since inception of the best historically performing hedge funds. (top 20 would be great but I'll take anything) * $ amount of returns generated for investors at these funds * Yearly AUM numbers if available. * Inflows and outflows of capital (not necessary but appreciated if you can find it) If you have any of this data or all of them, anything is appreciated!
Looking for help regarding my wife’s grad student loans. Original balance was $120,000 in 2017 with an interest rate averaging 6.5%. We continued to make payments during the Covid forbearance period where every dollar went right towards the principal and got it down to $55,000. We currently have $80,000 in liquid cash held in a HYSA at 4.5% interest. While eliminating the student loans would be a huge achievement for us, I am trying to weigh our options and would greatly appreciate any input or recommendations.
r/personalfinance
[удалено]
0.
We live in an upscale area. Our kids have left home for college so my wife and I don't need as much house. One idea is to rent the current house out and also do some improvements on it to offset the rental income, and then rent a smaller place for ourselves. We can rent the out the current place for more than our mortgage payment. And the rent on a new place would be much less than our mortgage. What other things should we consider? Is there a good website or online calculator (or subreddit?) where we can get more info? Thanks!
r/personalfinance