Good to Great by Jim Collins

Book Review on Good to Great 


Why some Companies make the Leap... and others don't

1. Level 5 Leadership
- builds enduring greatness through a paradoxical blend of personal humility and professional will

Lean in by Sheryl Sandberg

Book Review on Lean In 

Facebook COO, Sheryl Sandberg on Women, Work and the Will to Lead.

I have extracted the key points here. 

1. Sit at the table
- literally
- don't sit away from the board room table. be at the table. 

How to Prepare for a Job Interview

As I am writing this post, I have come a long way... from job hunting to preparing myself for job interviews to negotiating and eventually clinching the job.  Maybe it is an "Asian" thing, I realise we tend to be overly humble and undersell our abilities during interviews. This may lead to missed opportunities even if know we are fully aware that we are qualified for the role. When it comes to job interviews, from my past experiences I can say that over preparation is underrated. I went in the interviews over prepared, from researching the background of the company and common questions to reading reviews on Glassdoor to see what feedback I could gather before meeting the interviewers in person. You can read about my Checklist for Starting a New Job for readers who have gone through this stage. 



I have come up with a Checklist for you readers sharing How I prepare for my Job Interviews

How to Start Your New Job Right

Congrats now that you have landed your dream job. For those who are nervous about starting your new job, I am dropping my checklist over here to make sure you readers start off on the right foot! 

For readers who would want to find out how I prepare for my Job Interviews, you can do so here. 

1. Get ready to introduce yourself a lot

- be familiar of the managers' name, HR names, what you will be doing with the team

Guide to Investing Options [Options Clearing Corporation]

1. Basics: When you purchase an option --> Long position 
    Write an option --> Short position 

2. Set your Strategy 
    - Want more Income --> write Covered Calls
    - Protect the value of the stocks that you own 
                   - Purchase Puts
                   - Purchase options on an Index that tracks the type of stocks in my portfolio 
the more time until expiration, the higher the option premium, because the chance of reaching strike price is greater 

Volatility Skew Information

Volatility Skew
- situation where individual options on a particular entity have different implied volatilities that form a pattern 
- the pattern can be a positive or negative skew

Positive Skew (forward skew)
- higher strikes, higher IV

Negative Skew (reverse skew)
- lower strikes, higher IV 

Horizontal Skew
- long term options with lower IV
- because longer term options have uncertainty of future news


If skew is (+) and IV is Low Percentile --> Put Backspread
If skew is (+) and IV is High Percentile --> Call Ratio Spread
If skew is (-) and IV is Low Percentile --> Call Backspread
If skew is (-) and IV is High Percentile --> Put Ratio Backspread



Credits: https://www.optionstrategist.com/blog/2013/03/volatility-skew-information

About our Volatility Data - Implied Volatility and Historical Volatility

Estimate of the volatility of the underlying stock

Low implied volatility --> Option considered cheap 

Don't blindly buy or sell based on Implied Volatility. There may, in fact, be a good reason why the options are expensive. Perhaps the company is involved in a major litigation, or it is a biotech company that has a major drug up for review before the FDA. Conversely, if options are very cheap, perhaps the company has agreed on an all -cash buyout. 


Index Symbols begin with $

Futures Symbols begin with @


Credits: https://www.optionstrategist.com/products/category/free-analysis-tool

Covered Call Writing: Why Cash- Base Put Selling is Superior

Naked Put Selling = Covered call writing (but naked is better strategy due to lower cost)

Covered call requires 2 commissions (stock and written  call). If you want to sell, it will be another round of commissions.

Naked Put - expires worthless


Credits: https://www.optionstrategist.com/blog/2012/11/covered-call-writing-why-cash-based-put-selling-superior

Put - Call Ratios

The trading volume of put options to call options indicates the Investor Sentiment

How to interpret put-call ratio:
- higher ratio: time to sell
but some see it as a Contrarian Indicator



Credits: https://www.optionstrategist.com/blog/2012/11/about-put-call-ratios

Which Option To Buy: Deciding What Contract Is Best

(i) Day Trading

- Uses the underlying instrument with the highest possible delta (trade the stock, NOT the option)

(ii) Short term Trading (1 to 2 weeks)

- Can buy short term

- In-the-money option

- Large delta (respond closely to the movement of the underlying)

(iii) Intermediate term Trading

- Can use lower delta due to longer trading period

- Large moves might happen due to longer trading period

- trade at-the-money option

(iv) Long Term Trading

- use even lower delta

- at-the-money option

- LEAPS option

Credits: https://www.optionstrategist.com/products/category/free-analysis-tool

Options Trading Glossary

Backspread	Any spread in which in-the-money options are sold and a greater quantity of out-of-the-money options are bought. In a more general sense, it may refer to any strategy that makes money when the market becomes volatile.
Bear spread	A spread which makes money if the underlying stock or future declines in price. Typically constructed by buying puts at one strike and selling a like number of puts with a lower strike
Bull spread	A spread which makes money if the underlying stock or future rises in price. Typically, one would buy calls at a certain strike and sell the same number of calls at a higher strike.
Calendar spread (time spread)	A spread in which one sells options at one strike and buys options at a longer maturity with the same striking price. In a neutral calendar spread, one would not necessarily buy and sell the same quantity of options. The spread may be constructed with either puts or calls, but they are not mixed; that is, if one buys calls, he also sells calls to complete the spread -- puts would not be involved in that case.
Call Calendar Spread	buy long term call + sell equal no. of near month at-the-money calls of the same underlying at the same strike price
	why? --> sell time. We hope that Price remains unchanged at expiration
Bull Calendar Spread	if you are bullish --> sell near month calls
Neutral Calendar Spread	if you are neutral --> sell near month call
Put Calendar Spread	replicate with puts
Covered Option	covered means you have an offsetting position in that underlying security
	written calls means covered by long stock
	written puts means covered by short stock
Beta	A measure of how a stock’s volatility changes in relation to the overall market. A beta may help you determine how closely a stock in your portfolio tracks the movement of an index, if you’re considering hedging with index options. A beta of 1.5 means a stock gains 1.5 points for every point the index gains—and loses 1.5 points for every point the index loses.
Alpha	A measure of how a stock performs in relation to a benchmark, independent of its beta. A positive alpha means that the stock outperformed what the beta predicted, and a negative alpha means the stock didn’ t perform as well as predicted.
Delta	The amount by which an option's price will change if the underlying security moves one point in price. See also 'position delta'.
	The general rule is this: the shorter-term the strategy, the higher the delta should be of the instrument being used to trade the strategy. (more movement)
	ie. Delta increase as you get closer to expiration for near or at the money options
Gamma	The amount by which the delta will change when the underlying stock moves by one point. See delta.
Theta	Theta is a way to measure the impact and exposure of the passage of time on an option’s price.
	In theory, theta represents how much an option’s premium may decay per day or week with all other market factors and variables remaining the same.
	Theta is generally expressed as a negative number, and reflects the amount by which the option’s value will decrease every day.
Vega	A term to describe the amount by which an option's price will change for a 1 percent change in the volatility of the underlying security.
Rho	Rho is a value intended to measure an option contract’s sensitivity to interest rate changes.
	It is a way to assess the potential change in an option’s value given a change in interest rates.
	Rho and interest rate changes have the strongest impact on longer-term options.
	most traders agree that rho has less of a measurable impact on option prices overall
Open Interest	Net outstanding open contracts that have been purchased
	meaning only count 1 side
Ratio Spread	no of options sold > number purchased
Straddle	Any position that involves both puts and calls on the same side of the market, with same strike price
	Both options have the same underlying and same expiration date
Strangle	Any position that involves both puts and calls on the same side of the market, with Lower strike price
	Both options have the same underlying and same expiration date
Open interest	The number of open positions for a particular options series. High open interest means that there are many open positions on a particular option, but it is not necessarily a sign of bullishness or bearishness.
Volume	The number of contracts—both opening and closing transactions—traded over a certain period. A high daily volume means many investors opened or closed positions on a given day.
Liquidity	The more buyers and sellers in the market, the greater the liquidity for a particular options series. Higher liquidity may mean that there is a demand for a particular option, which might increase the premium if there are lots of buyers, or decrease the premium if there are lots of sellers.
Married Put	You simultaneously purchase shares of stock and a put on that stock

Credits: https://www.optionstrategist.com/products/category/free-analysis-tools

How much does it cost to buy a Second Property in Singapore

Case Study

Cost of Condo: Suburb Properties - OCR
New Sale: $1.2 million
Currently Own HDB flat. Purchase Condo as 2nd House - Non-Residential.
Outstanding Bank Loan.

(i) Down Payment
Loan Tenure does not exceed 30 years and sum of loan tenure and age of borrower at the time of applying for the loan is below 65 years. Down payment is 50% of the purchase price or market valuation, whichever is lower. The first 25% in cash, next 25% in cash and or CPF.	50% x 1.2 mil = $600,000
Loan Tenure exceed 30 years (max 35 years) and sum of loan tenure and age of borrower at the time of applying for the loan is above 65 years. Down payment is 70% of the purchase price or market valuation, whichever is lower. The first 25% in cash, next 45% in cash and or CPF.	70% x 1.2 mil = $840,000
ABSD	- pay 12% of property value or purchase price, whichever is Higher
	12% x 1.2 mil = 144,000
	- need to set aside CPF minimum retirement sum before you can use excess CPF money in your OA account
Conveyancing Fee
Professional Legal Fees	$2000 - $2500
GST	7%
- Stamp Duty paid in cash/ CPF:
- First $180,000 - 1%
- Next $180,000 - 2%
- Next $640,000 - 3%
- Remaining Amt - 4%
Conveyancing Account Fee	$200 - $400
Total Upfront Payment = Down Payment + ABSD + Stamp Duty = 600,000 + 144,000 + 3000 = $747,000
However, If able to pay off 1st housing loan
- will be considered as 1st loan
- 5% downpayment in cash, 15% downpayment in CPF
- 3% stamp duty
- 7% ABSD
(ii) Monthly Re- Payment (Bank Loan)
Depends on Bank Loan Interest Rates	Rough estimate for calculation purpose = $2100
(iii) Monthly Maintenance Fee	Estimated $300/ month
(iv) Property Tax
Depends on the Annual Value of the home.
Based on rental income	e.g $3000 x 12 months = $36,000
	Residential Tax Rates (Non- owner Occupied Residential Properties) = (10% x 30,000) + (12% x 6000) = 3000 + 720 = $ 3720 annual
(v) Renovation and Furniture
Reno	$30,000
Furniture	$20,000

Credits: Straits Time, EdgeProp, iCompareLoan, PropertyGuru, Dollars and Sense, 99.co, Ezbuy, HomeLoanWhiz

Decoupling to Buy a Property in Singapore

What is Decoupling (Fractional Purchase)

Decoupling happens when one partner's share in a property is transferred to the other person.


Why Consider Decoupling

This creates a sole owner, leaving the other half of the pair free to buy another home without having to pay the ABSD (Additional Buyer Stamp Duty), as that purchase will be seen as his or her first.

How to Purchase IPO on Interactive Brokers

What is IPO - Initial Public Offering


IPO is the very first sale of stock issued by a company to the public. An IPO is underwritten by 1 or more investment banks. Through this process, a privately held company is transformed into a public company.


In this article, I am going to write about purchasing US IPO as a foreigner (Singaporean) from Interactive Brokers Classic Account.


Steps:

1. Log into Account Management --> Trading --> IPO Subscription


You will be tasked to complete a declaration form.


Once done, you will be taken into the IPO Subscriptions page where the currently active IPO subscriptions will be shown.






2. Request Shares


3. Place your order


On the evening the IPO "prices," your broker will notify you that the offering is going forward. You will be given a deadline to place your order. Only after you place the order will you find out for certain if you were able to buy any shares.


Please be noted that according to Interactive Brokers website:

IB generally does not operate as an underwriter or selling agent of IPO shares, the first opportunity customers have to transact in such shares does not take place until the issue begins trading in the secondary market.

Source: https://ibkr.info/node/1897

https://www.interactivebrokers.com.hk/en/software/am/am/trade/ipo_subscription.htm


Conclusion

If you are really keen to get your hands on IPO, you can consider signing up with the other US Brokerages such as TD Ameritrade, Fidelity or Charles Schwab as they aren't available from Interactive Brokers. However, you can read here why I chose to open an account with IB.

TD Ameritrade will permit you to invest in an IPO if you have at least $250,000 in assets with the firm or have traded stock with TD Ameritrade at least 30 times in the last 12 months.

Fidelity's requirements are similar to TD Ameritrade's. Customers having $100,000 with the broker are eligible to participate in IPOs led by underwriter Kohlberg Kravis Roberts & Co. (KKR). Eligibility for other IPOs might be restricted to customers having as much as $500,000 with Fidelity -- or placing 36 trades in the past year would qualify a customer to participate. Charles Schwab's requirements are even easier to meet: $100,000 in your account, or 36 trades in your history.


Source: https://www.nasdaq.com/article/how-to-invest-in-ipos-cm875904

What to Consider Before Buying a Second Property in Singapore

A random thought led to this random article. Though I am well aware that I cannot afford to purchase a second property at this point in time, I still decided to do my research out of curiosity to see if I can afford to be the home owner of a second property.

One cannot only look at the mere figures for property purchase decision, he must also consider the qualitative factors before making a commitment. For the numbers and cost calculation, please refer to my blog post on How much does it cost to buy a 2nd property in Singapore.

Interactive Broker Trader Workstation (TWS) API Set Up

Interactive Brokers Trader Workstation (TWS) is comprehensive enough for my investment management and research. However, for curiosity sake I decided to try out their API software to see how far it can take me. If you simply want a fuss free method, please check out my post here on Alpha Vantage Excel Add-in. Please not that I did not subscribe to Interactive Brokers market data services hence there will be limitation on the functions available on their API calls. 

Allow me to digress, they do offer FREE Research and News Services on their TWS platform for users to access. However, there is a monthly fee for viewing real time quotes and premium newswires. Hence stated otherwise, the market data you are viewing are delayed quotes. Fees differ according to the stock exchange and type of user (Pro or Non- Pro). For the most of us, if you are reading this, you are most likely a Non-Pro user. 

Source: Interactive Brokers website
"Non-Professional - is any natural person and cannot be a corporation, trust, organization, institution or partnership account."

Alternative to setting up Alpha Vantage API

For those (like myself) who is still facing some 'technical difficulties' setting up the Alpha Vantage API, I have 'discovered' an alternative method which is more straightforward. Another reason has to be so far the tool is working fine, I have not encountered any "0" values for those API calls. This post is in reference to my previous post on Open Source API for Investment Tracking. 

Credits to LelandGrunt for his Excel Add- in tool found on GitHub. 

Free Online Courses (Other than Google) to Upgrade Yourself

As a continuation from my previous post on Free Google Courses Recommended, I have researched and tried out the free courses available online. I cannot stress on the importance of continuous self- development be it career related or not. Not only is it stimulating to your mind as you get exposed to unfamiliar things, you will be able to utilize some of the points read in your daily life. Besides, it never hurts to know more right! You can also use these pointers as a conversation starter. For example, I am currently going through the Digital Garage by Google which teaches you about marketing in the digital age. Even though this subject is totally different from what I am doing in my line of work, I still find it interesting because I can now better appreciate the elements behind selling a product or service and the promotion efforts behind it.


Note that this post is geared towards an individual who is keen in development in Analytics, Marketing and SEO, Finance and Programming Languages. Skills which are set to get a stronger foothold in years to come. This list is definitely not exhaustive as I only recommend those I have tried before.

Google Courses to Sign Up For

As a follow up from my previous post on how to save yourself from being retrenched, one of my tips was to improve on existing skills and take up new courses to stay relevant. With the threat of automation and low-value jobs being outsourced to lower cost centers, the threat to our rice bowl is becoming more prevalent. To see if your current job is at risk being made obsolete by robots, Will Robots Take My Job is an interactive web tool for you to assess your risk level. 

Being consistent in learning shows the potential employers that you are self- motivated and put in the effort outside of working hours to work on your skill set, setting your candidacy apart from the crowd. Herewith I have compiled applicable self- paced online courses that are free. 

How to Avoid Getting Retrenched

As you readers may know from my profile page, I am from the financial services sector where hiring and retrenchment can happen within a short time frame. The concept of having the same job till you retire is no longer relevant. In the beginning of this year, I receive news that the firm I was with had been acquired by a US private equity firm. Recently (9 months later), we received the dreadful news that some of us had to be let go.


The axe fell fast and swift, there was no time for handover. Those impacted had to leave on the same day, or given till end of week to exit. Although I am not impacted by this round of restructuring, I am sad and shocked to reveal that my line manager was. I decided to write this article because I had witnessed for the 1st time how crude reality can be. Brief background about my manager, she has been with the firm for more than 20 years, gaining extensive experience in her industry. Granted, she is an expensive hire but no mercy was shown when the parent firm decided to retrench her and the rest.


I will share what I have learnt from this experience and how can we survive being jobless/ unemployed in Singapore.

Open Electricity Market (OEM) in Singapore

Singapore used to have a sole provider of electricity, Singapore Power (SP Group) for the residential applicants. Before this, residential consumers have only one option which is to get their electricity supply from the SP Group at the regulated tariff, where the price of electricity is fixed every quarter. Recently, the Singapore government decided to open up the electricity market by inviting more players into the scene to keep the prices and services competitive. The Open Electricity Market initiative will be launched in phases across Singapore, with my housing unit having the chance to switch electricity retailers from 1 January 2019. 

At the time of writing, we have stayed in our current unit for only 4 months. The average cost of our electricity bill is $40 per month. Taking that into account, I did my research on the plans that may be suitable for us. 

Note: it is not compulsory to switch electricity providers.

Linking Open Source API to Google Spreadsheets to Track Investment: GOOGLEFINANCE, IEX and Alpha Vantage

What is API

API stands for Application Programming Interface. According to Google, API is a set of functions and procedures that allow the creation of applications which access the features or data of an operating system, application, or other service. In simple terms, it means a specification of remote calls for a program to interact with another software. API calls are required to retrieve data from the sources, such that you do not have to manually key in the data from the source to update your investment tracker. The data is being refreshed via the feed, freeing up your time for analysis instead of doing data entry. 

In this article, I will share the basics of setting up simple API calls from GoogleFinance, IEX and Alpha Vantage. 

How to Invest in Gold

As I go about building up my investment portfolio, I decided that it would be apt to include gold into my collection. I acknowledge the fact that there are other options for getting your hands on this asset. However, in this article, I am going to present my thoughts on investing in gold from the perspective of an average investor.


Why Invest in Gold

Gold is seen traditionally as a safe haven when the stock market is in turmoil. When there is high volatility in the stock market, the participants back off to get their hands on gold. Such behaviour is apparent such that it is known that gold has a low correlation with other assets and investors routinely uses gold to hedge against inflation. Gold is also used a tool for diversification and was conferred the highest honour of being a currency in its own right - the Gold Standard.

Best Free Mobile Apps for Investing

Being based in Asia, having a full time job and not being able to access to my spreadsheets at work means having mobile apps that provides not only numbers, but also relevant news in the market so that I can access news on the go and be prepared when the trading session opens at night in Asia (morning in EST).

Here are a few of the mobile apps that I have tried. I acknowledge that the mobile apps have a desktop version which provides more offerings at a glance. However, for this article I am only going to review the mobile version. Feel free to leave your comments if you agree or think otherwise or if there are better mobile applications out there. 

Forex (FX) Basics

Currency Pairs

USD/ SGD

USD = base currency

SGD = quote currency

i.e Buy USD, sell SGD

Minimum Price Increment: 0.00001 ( 0.1 pip)

Settlement: T+2

e.g USD.SGD 1.3703 means 1 USD is worth 1.3703 SGD
So the ideal rate is 1:1   ie. Using 1 SGD to exchange for 1 USD

Order Types on Interactive Broker

Preface as seen on Interactive Brokers Quick Trade Platform

Source
https://www.interactivebrokers.com/en/software/tws/basicordertypestop.htm

Type of Interactive Broker Trading Platforms

Interactive Broker provides their clients with multiple platforms to trade at their comfort. I have listed the platforms available and posted some of my findings as I navigate my way figuring out how to use their platforms. 

Note:

Please be sure to have sufficient funds in the currency you are trading in. If not, charges from your margin account applies.

What happens if I trade a product denominated in a currency which I do not hold in my account?

Source: https://ibkr.info/node/722 

Please refer to my post on How to Convert from Base Currency to Trading Currency in Interactive Broker. 

How to Convert from Base Currency to Trading Currency in Interactive Broker

Interactive Broker requires to convert the base currency, SGD to USD before you are able to trade US equities. 

Buy USD, sell SGD. 

As seen on Quick Trade Platform. 

Select "Forex" tab --> Key in "USD" hit enter --> select "USD.SGD" --> key in amount in USD you want to FX for --> amend Limit Price if desired --> submit Order

6 Steps to a Trading Decision

1. State your Forecast

- important to be specific about price of stock and time frame
e.g. XXX stock will rise from $10 to $15 in 20 days. Today is 40 days to expiration.


2. Calculate the Implied Volatility

- volatility percentage in the option pricing formula
- Stock price
- Strike price
- Dividends
- Interest Rates
- Days to expiration
- Volatility


OIC Option Pricing Calculator

Trading Strategies

1. Stock- Oriented Strategy - Covered Straddle

- Normally price rise, sell shares to realise profit. Price drop, buy more shares.

- BUT Alternative to waiting for price rally/ dip --> can use COVERED STRADDLE
--> call + put with the same strike price and expiration date


LONG STRADDLE 

- Buy both call + put
- depending on the underlying stock's direction of movement, either the call will profit more than the put (vice versa)

Option Price Behaviour

1. Strike Price - if the stock price don't move beyond the strike price, then the option will expire worthless


2. Time to Expiration (time decay) - the longer the time, the higher the option price

- the most time decay happens as option is near expiry


3. Effect of Interest Rate on short- term options prices is small

rise in i/r --> rise in CALL, drop in PUT

Option Strategy - Long Stock; Stock UP/ DOWN since Purchase - what next?

Long Stock, Stock UP since purchase

Next steps

1. Take no action - monitor price and change strategy if price outlook sours

2. If want to sell at my Target Price --> write Covered Calls

    - look for Strikes = stock target price, short time to expiration, high option premium

    - at least gain premium from selling

3. Buy Protective Put to protect downside, but require cash outlay to purchase

    - protective put will "kick in" when price drops to strike price

    - "insurance" is valid until expiration date

*Credit: OIC Beginners - Managing Stock Positions

"Best" Option Strategy for each Implied Volatility rank

Implied Volatility percentile	Strategy
Net Buyer
0 to 50	Debit Spread
	Calendar Spread
	Ratio Spread
	Diagonals
Net Seller
50 to 70	Credit Spread
	Iron Condor
	Broken wings butterfly
Net Seller
70 to 100	Straddle
	Strangle
	Wide iron butterfly
Place trades at ~ 45 days to expiration, sell at ~15 days to expiration
25 - 40 days - sell
< 45 days - buy

Credits: Option Alpha

Stock Picking Template

Income Statement

1. Net Profit Margin for the past 10 years 
 - look out for
                 - non- recurring earnings
                 - reserves
                 - subsidiary earnings
                 - depreciation and amortization

2. Net Income > Revenue (for the past 5 years)
    i.e Operating profit margin


Balance Sheet
1. Current ratio > 1
2. Debt ratio 
 - ensure no large debt maturing; may cause re-financing issues
3. Rising retained earning for the past 10 years
4. Current Asset Value (liquidation value) = CA - Liability 
 - if market price < current asset value, then equity is undervalued


Cash Statement
1. FCF/ Share
2. CFO
3. Cash Ratio = (CA - inventory)/ CL


Dividends
1. Dividend yield - look at 5 year average
2. Dividend payout ratio > 50%


Strategy
1. Easy to understand business model
2. "best in breed" firm
3. Mid to large cap firms (< 2 Bn)



Sidenote: refer to CANSLIM

Passive Income Ideas that Anyone Can Try

1. Be a long- term, passive investor

Since my investment horizon is long (meaning I expect to be working for at least the next 30 years), I have the luxury to be aggressive in my investment choices. However, looking at my current state of income and savings, apparently it is rather pathetic. Hence, I have to be pragmatic in my approach.

Below pointers are what I have implemented:

- Buying REITS to collect dividends
- Buying Blue Chip stocks as they are more stable and some even pay out dividends
- Buying into Indexes and ETF's
- Subscribing to Peter Lynch's concept of Beating the Street for my investments

Cheatsheet for ETF Selection

1. Fund's Longevity
How many years have the fund been effective. Longer history suggests stability and track record to see the results. That said, past data does not imply future performance. 

2. Fund Size
At least USD 100 million AUM (Assets under Management). 
Larger AUM is better. 

3. Expense Ratio
The % of funds that the AM (Asset Manager can withdraw each year to pay for the fund's operating expenses.
Lower, better. Vanguard is known for having low expense ratios.

4. Tracking Error
The deviation from the underlying index. 
Less is better. 

How to Do a Fund Transfer for Interactive Brokers

Reference Guide for Doing Funds Transfer for Interactive Brokers Account

Ensure Trading Account is funded before trading. 

User to set up Standing Instructions with Interactive Brokers before Initiating Fund Transfer from your bank account. 

Basic Information for Trading the US market as a Non- US Citizen

As a Non- US Citizen
Not subjected to Capital Gains tax
subjected to 30% Dividend tax
NASDAQ	Indices, Stocks
NASDAQ OMX	Equity Options
NASDAQ OMX BX	ETF, Stocks
NSX	Indices
NYSE	Indices, Stocks, Warrants
NYSE MKT	Small- cap firms
NYSE ARCA	ETF, Stocks, Warrants
Mutual Funds	-
Trading Hours
DST: 1 April to 7 Oct 2018 - 2130 to 0400
Outside DST - 2230 to 1700
Settlement Date	T+2 market days
Settlement Currency	USD or SGD
Trading Lot	1 share
Share price (USD)	Minimum Bid Size (USD)
<1	0.0001
>=1	0.01

Selecting a Brokerage - US Market

US market Stocks	Interactive Brokers	Saxo Capital Markets (Classic Account)
Commission	0.5% (min $1)	0.01 USD/ Share (min. 3.99 USD)
Minimum commission	2.50 USD	15 USD
Minimum Holding Fee	Monthly minimum fee of $10 for accounts between $2000 and $100, 000	0
Platforms	Desktop - Trader Workstation Mobile App (2FA)Webtrader Platform	SaxoTraderGO SaxoTraderPRO
User Support	Hotlines dedicated to various regions, chat bot, FAQ Personal experience: it is hard to get customer support, send emails, received no replies request for callback, received callback after 2 days Tried chat-bot, answers provided were weak and not so relevant. *Update: Hotline works but it is not toll-free, no Singapore hotline and I had to call Hong Kong hotline which is costly. As for the Live Chat function, I had to wait for some time before the next available agent was ready. Response from the agent was slow and the problem was not resolved by the time I ended my Live Chat. (Issue I encountered was Delayed Data not showing on my Trade Workstation	Dedicated SG hotline from 0830 to 1730 Singapore office available. Personal experience: Dedicated account manager based in Singapore to assist with my queries. Follow up call to check on my interest in opening a trading account with them
Firm Reputation	Since 1977 Cannot trade Singapore markets, probably to protect local brokerages' interest since they charge lower fees No impact as I am already using iOCBC to trade Singapore equities	Fully licensed Danish Bank can trade in Singapore markets, but that's not what I'm looking for
Required Minimum in account	10, 000 USD (on website) *Update: IB removed this requirement when I called to check (July 2018) require funding for account activation	2000 USD
Monthly Activity Charges	10 USD monthly, cannot be waived unless- more than 100, 000 USD in Equity- generate more than 10 USD in commission and fees	6 consecutive months of NO trading - 100 USD
Cash Movement	1 free withdrawl per month Thereafter, - 10 USD for Wire transfer- 1 USD for GIRO	No charges if request is submitted via Online 40 USD if done manually
How to Fund the Account	Bank transfer	Bank Transfer - 1 to 5 days Credit/ Debit Card - Immediate, Credit card charges of 0.5 - 2.5% Stock Transfer
US Market Options	Interactive Broker	Saxo Capital Markets (Classic Account)
Trading Fee	0.70 USD/ Contract (min $1)	6 USD (1 -250 Contracts) 3 USD (251 to 1000 Contracts)1.50 USD (1000 to 5000 Contracts)
	Fixed Rates for Infrequent traders Tiered Rates for Active Traders	No Minimum Fees for Contract Options
		No Custody Fees for Contract Options
Bought Options Daily Holding Fees Per Mil	Nil	Less than 30 Days - Nil
		More than 30 Days - 1.10 For Equities Options
Forex Commissions	If Monthly traded amount is < USD 100 Mil then = USD 2 or 0.2 bp * Trade value	As per website, commission for 5 major currencies from as low as 0.4 pips, depending on initial funding and trading volume

Option Expiration

1. Expiration for Index and Equity Options is the Saturday immediately following the 3rd Friday of the expiration month (except when Friday is a holiday, then the expiration date brings fwd 1 day to Thursday).


2. American Style Option (usually the case)
- can be exercised at any time prior to expiration, up to the 3rd Friday of the expiration month


3. European Style Option
- last trading day is Thursday


Note:
- Although an option can be assigned/ exercised any time, the majority of options are assigned the week of expiration

Option Basics

How to Read a TRADE

XYZ AUGUST 70 CALL AT $3.10

where XYZ is the name of the stock
August is the expiration date
70 is the strike price
Call is the option type
$3.10 is the premium

Buyer - LONG - buy to open - debit

Buyer - LONG - sell to close - credit

Seller - SHORT - sell to open - credit

Seller - SHORT - buy to close - debit



How to Read an Option Pricing Diagram

APR 17 (10) 100 (weekly)

Where option expires on the 1st Friday of April 2017
10 days left
"100" represents the multiplier. i.e 1 option rep 100 underlying shares
Weekly option. If NO indication, means monthly option

* Monthly option expires on the 3rd Friday of the month


Option Pricing and the Greeks

Pricing = IV + TVM 

where IV is impacted by SPOT and STRIKE price
where Time Value of Money is impacted by - Time Value of Money - further from expiration, more valuable the option


- Higher Volatility - higher option price

- Interest Rate - Not much impact for options that have > 60 days to expiration

How to Decide on which REITS to invest in?

1.Highest yield - 5- 6% - to beat inflation rate

2. DPU consistency

3. NAVPS < Bid Price - to see if undervalued

4. AFFO - the 'real' Cash Flow

5. Leverage < 30%

6. D/E < 60%

7. Interest Coverage Ratio > 5%

8. Rental Occupancy

9. Rental Reversion - Positive is better

10. Undervalued P/B < 1

11. Diversification - property categories

12. Weighted Average Lease Expiry - improving market, choose shorter lease. Deteriorating market, choose longer period.

Growth or Value Investing?

	Growth	Value
Ratios
Growth Rate	5 - 10%
PEG	-	< 1
ROE	high
P/B	low	P≈ BV
P/E	high	low
D/E	-	D≈ E
Dvd	high	Consistent payouts
Operating Performance
low R&D, depreciation and interest expense
NI/ Revenue ≈ 10 - 20%
Healthy cash level
Increasing retained earnings
Qualitative Factors	- Durable Competitive advantage. If no CA, then choose firms with govt intervention that favours incumbents- geographical diversification- easy to understand biz models
E.g	IT, Technology, Mining, Industrial, Consumer Discretionary, Energy	Financials, Utilities
When to SELL
lost of competitive advantage
P/ EPS > 40

CANSLIM

System for Selecting Stocks


C - current Q earnings of a firm - last Q earnings have > 20% growth

A - annual earnings growth - annual EPS growth of 25- 50%
N - new product, service, management or new high in price level
S - supply and demand - smaller firms with smaller # shares < 25 mil

    - less #, more movement.
      Also, look out for re- purchasing which signals mgmt confidence
L - leader or laggard - relative px strength ~ 70% - ΔP stock/ ΔIndex over the same period of time
I - institutional sponsorship - ideally between 3 and 10 sponsors - over-owned, be cautious
M - market direction - uptrend/ under pressure/ correction - invest in time of definite uptrend - see Indices