Stock Price
Trading Value and Stock Price

relationship between trading volume and price

In their 2005 article, Gunduz and Hatemi-J have explored the relationship between stock price and volume by using information from the major stock markets of Central and Eastern Europe. They have made use of the Toda-Yamamoto (1995) procedure to determine Granger causality among the variables. The findings of their study provide insight into the different ways stock price and volume influence, and are influenced by, one another. In fact, in some cases, as in the Czech stock market, it was found that no causal relationship between stock price and volume exists. A unidirectional relationship was observed in some markets while in other markets a bidirectional relationship was observed. Therefore, a conclusive statement about the causal relationship between trading volume and price cannot be made.

The Importance of the Study

This is an important study for several reasons. Firstly, the authors have implemented…...

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References

Brailsford, T.J., 1994. The Empirical Relationship between Trading Volume, Returns and Volatility, pp. 1-33.

Deo, M., Srinivasan, K. And Devanadhen, K., 2008. The Empirical Relationship between Stock Returns, Trading Volume and Volatility: Evidence from Select Asia-Pacific Stock Market. European Journal of Economics, Finance and Administrative Sciences, 12, pp.41-49.

Gunduz, L. And Hatemi-J, A., 2005. Stock Price and Volume Relation in Emerging Markets. Emerging Markets Finance and Trade, 41 (1), pp.29-44.

Leon, N.K., 2007. An Empirical Study of the Relation between Stock Return Volatility and Trading Volume in the BRVM. African Journal of Business Management, 1 (7), pp.176-184.

In these scenarios, stock options provide a powerful tool in which to properly align the goals of management with those of the firm
What exactly performance-oriented rewards are in regards stock options? To begin, options are not stock in its physical form but rather a claim to stock at a predetermined price. There are two key distinctions regarding this concept. First, stock options have an asymmetric payoff (see Chapter 2) and second they do not pay any dividends. Stocks, in regards to actual ownership, do pay dividends. These two key distinctions can create risk-taking behavior on the part of management because the value of options increases with the overall risk on the firm. The price of options also decreases with a large dividend increase. The more stable a company is in regards to its performance, the less valuable the option will become. Therefore, performance oriented rewards provide incentive for the…...

Stock Market Prices and the Media During the Tech Bubble
Stock Price and the Media During the Tech Stock Bubble

The world of stock trading at first gives the impression of a hardcore science. Prediction of stock movement is based on a complex series of formulas, algorithms, and mathematical predictive models. These portions of stock trading represent the quantitative element of the stock world. However, there is also a qualitative side to stock trading that is often not addressed via traditional stock trading metrics. The world of finance is reactive to major world events and other conditions such as consumer demand. Prior to the great tech stock crash of the 1990s, tech companies attempted to make a profit based on trends in consumer demand. This research will analyze two companies that used unethical practices to profit from the tech stock crash.

The ise and Fall of the Tech Sector

The rise of the Internet…...

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References

Austin, I. (2012). Ex-Nortel Executives' Fraud Trial to Begin. The New York Times. January 15,

2012. Retrieved September 7, 2012 from  http://www.nytimes.com/2012/01/16/business/former-nortel-executives-fraud-trial-to-begin.html?_r=1 

Galbraith, J. & Hale, T. (2004). Income Distribution and the Information Technology Bubble.

University of Texas Inequality Project Working Paper. In Reil, B. & Meiklejohn

Microsoft Corporation
2. Toyota Motor Corp.

3. The Coca-Cola Company

The data in the Table 2 reveals the Coca Cola has recorded a decline in its stock price within the last 3 months making investors to record a loss within the last three months. However, the company recorded a moderate increase in the stock returns between 1 and 5 years. Similarly, Microsoft Corporation records a decline in the stock price within the last 3 months leading to the loss in the stock return. However, the company also demonstrated a moderate increase in the stock returns in the last 5 years. Toyota Motors recorded a loss in the stocks within the last one week. However, Cocoa Cola could still be appropriate for both shorter and long-term investment for investors who can carry the risks.

Fig 3: Money for Investment

Conclusion and ecommendation

Based on the evaluation of the listed stocks in Table 2, the prospective investors…...

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Reference

Trading Economics (2013). United States Market (Dow Jones)

Appendix: Stocks Worth Considered

Annual Sales

Annual Profit

Stock/Equity Qs
How good is the long-run performance of IPO firms? How is holding on to IPO stocks is a risky proposition? Explain.

All publicly traded companies have some form of initial public offerings, and thus judging the truly long-term performance of IPO value means assessing stock market value. In shorter terms, however, most IPO purchases end up lagging behind market averages, and ultimately many newer companies fail (Goldberg, 1999). This means holding onto IPO-purchased stock runs the risk of lower rates of return on the investment than could be achieved by selling and purchasing more established stocks, or even of having the value of the investment completely eroded through a company closure or bankruptcy (Koch & Johnson, 2009). Selling quickly is typically the best way to reap rewards from these stocks, and for the average investor trying to purchase an IPO usually isn't worthwhile (Goldberg, 1999; Koch & Johnson, 2009).

What are…...

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References

Brain, M. (2012). How NASDAQ IPOs Work. Accessed 16 April 2012.  http://money.howstuffworks.com/nasdaq-ipo.htm 

Goldberg, S. (1999). Guess which hot investment isn't really so hot. Kiplinger's Personal Finance (May): 32.

Koch, E. & Johnson, D. (2009). The Complete Idiot's Guide to Investing. New York: Penguin.

Reilly, F. & Brown, K. (2011). Investment Analysis and Portfolio Management. Mason, OH: Cengage.

Stock Options
Payment of stratospheric compensations to the corporate executives by the dot.com companies is the talk of the day. It is pertinent to note that these compensations are paid not only in terms of the cash compensations but also in terms of stock options. However, compensations plans in terms of stock options are not new and being used years together in order to attract the employees and retain with a bondage to the company. The rationale is to give the ownership interest in the company with an expectation that the executive will improve their performances working closely with the share holder interests and the company's long-term profit maximization goals. The stock options as a part of the package for compensating the executives has much more wide spread presently with the cropping up of Internet-based dot.com companies.

The origin of the stock options perhaps traced back to the efforts of the start…...

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Bibliography

Change for Stock Option Repricing" Balachandran, Sudhakar; Ellen Carter, Mary;

Luann J, Lynch. Retrieved at   Accessed on May 12, 2004http://www.nd.edu/~mshackel/acct_workshop/pdf/BCL_112002.pdf 

Commentary: An Options Plan Your CEO Hates" Business Week retrieved from   Accessed on May 12,http://www.businessweek.com/careers/content/jan1990/b3670152.htm .

Duan, Jin-Chuan; Wei, Jason. "Executive Stock Options and Incentive Effects due to Systematic Risk" retrieved at   Accessed on May 12, 2004http://www.wu-wien.ac.at/inst/or/op1/CEOoption_2003_07.pdf 

Since institutional investors typically hedge their risks by using asset liability management and derivatives instruments against market risk, it is estimated that institutional investors in a representative stock market such as the London Stock Exchange lost only 10% of the value of their assets in the 1987 crash. In the absence of such hedging the effect of the crash and the resultant liquidity crunch would have been far greater. (Markose, Sheri, n.d.)
Causes of the Crash number of possible reasons for the Crash have put forward by the experts, some of which are discussed below:

Program Trading

Program trading (also called computer trading) involves index arbitrage - which takes advantage of price discrepancies between indexes of stocks and futures contracts by using sophisticated computer models to hedge positions. Program traders or an arbitrageur simultaneously buys a stock in one market and offsets that purchase by selling it in a futures contract of…...

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Works Cited

1987 Stock Market Crash." 1929 Stock Market Crash. 2004. June 1, 2005.  http://www.1929stockmarketcrash.com/1987-Stock-Market-Crash.htm 

Byrne, Rebecca. "The Trade Deficit's Widening Threat." The Street.com. August 17, 2004. June 1, 2005.  http://www.thestreet.com/_tscs/markets/rebeccabyrne/10178505.html 

The Causes of the Stock Market Crash of 1987." 1929 Stock Market Crash. 2004. June 1, 2005.  http://www.1929stockmarketcrash.com/1929-stock-market-crash/stock-market-crash-of-1987.shtml 

Crash of 1987." Great Market Crashes. N.d. June 1, 2005.  http://members.aol.com/Mallard/crashes.html

During high school, students can prepare by taking classes in mathematics, sciences, languages, and business (Hobsons College View). Usually, a four-year bachelor's degree is required, at minimum. A degree in the areas of economics, investments, or a general business degree with an emphasis on economics is useful. And MBA can be useful for working within the securities fields (Hobsons College View). Successful competition of the General Securities Registered Representative Examination is often required, and many states require a stock broker to take the Uniform Securities Agents State Law Examination. Stock brokers generally must go through a period of time when they are considered a trainee before being considered a stock broker (Princeton Review).

ork conditions as a stock broker are generally good. Stock brokers work in offices during business hours, in all parts of the country, under safe conditions (Sify.com; Fasteb).

However, although the career may entail considerable stress. The pace of…...

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Works Cited

Hobsons College View. Training to be a Stock Broker. 11 October 2004.  http://www.collegeview.com/college/ask_experts/choosing_mj/stockbroke.html 

FastWeb. Career Overview: Stock broker. Monster.com. Source: U.S. Department of Labor, Bureau of Labor Statistics. 11 October 2004.  http://fastweb.monster.com/fastweb/content/career_db/stockbroker/index.ptml?ID= 

Princeton Review. Career: Stock broker. 11 October 2004.  http://www.princetonreview.com/cte/profiles/dayInLife.asp?careerID=150 

Sify.com. Stock Broker. 11 October 2004. http://sify.com/news_info/education/careerguide/fullstory.php?id=13360233

If the board of directors approves a 10% stock dividend, each stockholder will get an additional share for each 10 shares held. "A stock dividend does not involve cash. ather, it is the distribution of more shares of the corporation's stock. Perhaps a corporation does not want to part with its cash, but wants to give something to its stockholders. If the board of directors approves a 10% stock dividend, each stockholder will get an additional share for each 10 shares held" (Stock splits and stock dividends, 2012, Accounting Coach). It can be thus viewed as a kind of 'creative' way of rewarding shareholders and holding on to necessary cash. The company may be cash-poor because it wishes to invest more heavily in &D, to engage in efforts to expand the company, or to deal with the costs of a merger, acquisition, or some other form of internal or…...

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References

Stock split. (2012). Fool FAQ. Retrieved:  http://www.fool.com/FoolFAQ/FoolFAQ0035.htm 

Stock splits and stock dividends. (2012). Accounting Coach. Retrieved:

 http://www.accountingcoach.com/online-accounting-course/17Xpg05.html#stock-splits-dividends 

What is a stock dividend? (2012). Investor Words Retrieved:

Stock Options
The phenomenon of Stock Options has had a dramatic rise and fall during the last 15 years or so. They have been hailed as a great way to share ownership, attract and retain employees in a tight labor market and "the fuel of entrepreneurial fire" (Malone, 2003). At the same time, they have been condemned as a major cause of the high-profile business scandals during 2000-01 and the subsequent down-turn in the U.S. stock-markets. In this paper, I shall describe what Stock Options really are, take a look at their history, advantages, and disadvantages and discuss their future in the business world.

What are Stock Options?

A stock option is a contract offered by the employer that gives an employee the right to buy or sell a certain number of shares in the company at a specific price within a certain period of time. The price at which the option is…...

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References

Employee Stock Options Fact Sheet." (2002). NCEO -The National Center for Employee Ownership Website. Retrieved on February 29, 2004 at  http://money.howstuffworks.com/framed.htm?parent=question436.htm&url=http://www.nceo.org/library/optionfact.html 

Glasner, Joanna (2004). "Last Hurrah for Stock Options." Feb. 05, 2004. Wired.com. Retrieved on February 29, 2004 at  http://www.wired.com/news/business/0,1367,62156,00.html 

Krantz, Matt and Jones, Del. "Enron's fall fuels push for stock option law." USA TODAY

02/07/2002. Retrieved on February 29, 2004 at  http://www.usatoday.com/money/energy/enron/2002-02-08-options.htm

Seeking to raise more capital," Amazon.com plans to sell about $600 million of convertible subordinated notes" (Mutter, 2000, p. 80). Amazon, at the time, was considered a much more substantial risk than it is currently. The issuance of convertible debt seemed very speculative at the time. Mutter even wrote that investors did not like "the equity-like risk assumed by debt holders" (Mutter, p. 80). but, the investment has paid off in the long run.

An additional American company that could be used as an example of one that issued convertible notes is Candescent Technologies.

Based in the United States, it "raised $125 million through the sale of senior subordinated convertible notes to finance a facility for the manufacture of field emission displays (FEDs)" (Brown, 1998, p.17).

Senior convertible notes are less a risk of loss of investment capital than regular convertible notes because, as the name implies, they are senior in stature, and…...

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References

Background on the Australian Stock Exchange, (2006) Accessed August 17, 2008, at  http://www.gocurrency.com/articles/asx.htm 

Brown, P. (1998) U.S. flat panel fab planned, Electronic News, Vol. 44, No. 2220, p. 17

IINET Ltd., Accessed August 17, 2008, at  http://www.asx.com.au/asx/markets/PriceResults.jsp?method=get&template=F1001&ASXCodes=iin 

Miller, S.E., (2007) Valuing preferred stock, Journal of Accountancy, Vol. 203, No. 2, pp. 55-59

An upside gain can also be handled in that same manner, with a sell order placed above the trading price. This guarantees that the stock will automatically be sold as soon as it hits that price (if there is a buyer).
Another method of purchasing or selling shares that some investors use is called the option method. This method is used to obtain the right to purchase or sell shares at a certain price (the strike price). If an investor wishes to purchase a thousand shares of stock but does not wish to pay for them right away, the investor could purchase 10 options (100 shares per option) to buy the shares at a certain price. The closer the strike price is to the current price of the shares the higher the option will be.

Options can also be used to sell shares at a higher price than what they are…...

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Works Cited

DO the MATH: SAVVY STOCK-PICKING IS a MYTH.(Letter to the Editor)." Business Week 3975 (March 13, 2006): Vol. 20

Kadlec, Daniel. "Oct. 29, 1929: Wall Street's Bad, Bad Fall.(Special Section TIME's 80th Anniversary/80 Days That Changed the World)(Wall Street crash)(Brief Article)." Time 161.13 (March 31, 2003): A12. General Reference Center Gold. Thomson Gale. Salt Lake City Public Library. Accessed May 12, 2007 http://www.find.galegroup.com.salty.slcpl.lib.ut.us:80/ips/infomark.do?&contentSet=IACDocuments&type=retrieve&tabID=T003&prodId=IPS&docId=A99128177&source=gale&srcprod=GRGM&userGroupName=slpl&version=1.0

The SEC's Atkins: Words of Dissent." Securities Industry News (May 7, 2007)

A stock dividend is when the company uses the money that would ordinarily go to pay shareholder dividends but instead uses it to buy additional shares for the shareholder. The stock split occurs when the company issues new shares (2 or more) for every existing share held by investors. The former action decreases the overall float in the marketplace, which means the share price is likely to be driven up—good for investors if they want to sell. The latter is dilutive and increases the float by doubling the number of shares available for purchase. It really depends on the company. For instance, Apple split its stock 7:1 in 2014, which drove the price down significantly and made it more attractive for retail buyers (Stock Split, 2019). Because many retail buyers view Apple as at the forefront of the tech industry, they were willing to buy. Apple, too, has been conducting share…...

STOCK VOLATILITY Investors and their PerceptionMarket efficiency is a situation where market or security prices accurately represent all information available to participants (Hamilton & Booth, 2007). In an efficient market, all market participants have access to complete and perfect information about security prices such that market prices are unbiased estimates of securities true prices (Hamilton & Booth, 2007). Since everyone has access to the same information about prices, it is impossible for an investor to gain an edge over others by trading financial assets (Hamilton & Booth, 2007).A serious limitation of the efficient markets hypothesis is it ignores the fact that investors value stocks differently. An investor may evaluate a stock based on its growth potential, while another may look at how it explores undervalued market opportunities. The two investors will not have the same assessment of the stocks fair value as suggested by the efficient market hypothesis (Hamilton &…...

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References

Hamilton, R. W., & Booth, R. A. (2007). Attorney’s guide to business and finance fundamentals. Wolters Kluwer.

Ross, M. (2012). The courageous investor: Investing for bulls, bears, and the regular folks. AuthorHouse.

Introduction
Distribution policy is a set of principle stipulating the guidelines for cash dividends payout to the shareholders and stock repurchases. Dividends mean the company's earnings distributed to the stockholders declared during the year, interim dividends, or at the end of a financial year referred to as the final dividend. Dividends account as a source of income for the investors but also have an information signaling effect. Therefore, a dividend distribution is informing the management of the earnings to allocate as dividends and contribute to sharing purchase investment decisions. Dividend distribution policy is informed by multiple factors such as financial flexibility, investment opportunities for the company, tax consideration, contractual and legal restrictions, the volatility of expected future earnings, and flotation costs (Baker & Weigand, 2015).
Dividends may be distributed in the form of stock repurchases or cash dividends. Cash dividends offer investors a stream of income. Stock repurchases entail the buyback of…...

Operation Anaconda was, at the time, the largest combat operation in Afghanistan as part of the War on Terrorism that was declared after the 9-11 attacks on the World Trade Center and the Pentagon.  It was launched on March 2, 2002.  Major General F.L. Hagenback, the commander of the U.S. Army 10^th Mountain Division, was responsible for leading an offensive attack on al-Qaeda and Taliban forces that were located in the Shahi-Kot Valley/ Arma Mountain region near Zormat in Afghanistan.  It was the first major battle after the Battle of Tora Bora and was the first battle to feature American....

A comparison and contrast essay on two specific service providers is a little different from comparison and contrast essays on ideas or people because you are going to always want to focus on the customer’s experience.  However, if you are writing the essay for a business class, you would be focusing on different aspects such as corporate structure, stock price, etc.  So, keep that in mind when writing your essay.  Are you providing more of a user review or a business analysis and structure your essay accordingly.

It is also important to keep in mind that the COVID-19 pandemic has really....

Due diligence refers to the process of doing a proper investigation into something before taking an action.  Due diligence can have applications in a number of different contexts, but is most often discussed in the context of some type of business deal, when a person or organization has to make a decision about whether or not to enter into some type of business relationship (usually an investment relationship) with another type of person or organization.  Due diligence can be as simple as studying publicly available information to determine whether or not to purchase a stock....

Right now, it is impossible to discuss the financial markets without looking at what happened with GameStop stock, so we are going to focus our example essay outline on this event.  To understand how a bunch of small investors organizing on social media were able to disrupt hedge fund managers and traditional ways that they profit off of failing companies, it is important to understand the concept of shorting stocks. 

I. Introduction

A. Stock shorting

B. Why businesses fail from stock shorting

C. Why GameStop was vulnerable

D. The impact of purchasing GameStop....