Investment Questions and Answers (Page 2)
What is a LEAP option?
LEAP options are simply long-term options. Often LEAP options can last as long as 3 years making them a popular investment choice among option traders. It is usually much easier to calculate and predict long term price movement versus the short term moves usually associated with regular options. Of course, the longer the LEAP has until expiration, the higher the price of the LEAP will be, assuming the LEAP is for the same underlying stock and same strike price. Like regular options, if you purchase an option, your loss is limited to cost of the LEAP option will your potential profit is unlimited. However, the stock underlying your LEAP option must move several points (it depends on the cost of your LEAP) in the direction you predict before expiration for you to make a profit.
If I have a joint account, can one person sell stock without the other's consent?
This depends on how the joint account was originally setup. Often joint accounts, especially husband and wife account, are setup to take orders from either spouse. Therefore, one spouse can buy and sell stock without having to inform the other spouse. I have seen cases where this can be an issue when going through a divorce, but in other cases it is more convient for a broker to execute trades from one spouse rather than having to get approval from both. Evaluate all the criteria and determine what works best for you and the other joint account holder.
I am a foreign citizen, can I invest in the U.S. stock markets?
Absolutely. Many companies listed on U.S. Exchanges are owned by residents of different companies. In addition, some companies major stockholders are citizens of countries all over the globe. Just as non U.S. citizens can invest in U.S. markets, U.S. citizens are also able to invest in other exchanges around the world.
What stocks are in the Dow Jones?
The Dow Jones is comprised of 30 stocks and it meant to represent the market as a whole. The 30 stocks it represents is a broad cross-section of the many industries and sectors represented in U.S. stock markets. From time to time, new stocks will be added while other stocks will be removed from the index.