Percentage in Point

How To Calculate Forex Trading Transaction

Posted: 24 Aug 2010 07:13 AM PDT

Transaction is that amount which you acquire while making an economic exchange. This is the amount which you use in buying and selling of the stocks.You can also call it as transaction fees. Transaction includes the commission of the brokers and the dealers.

Transactions are produced by bank for the reason that they may be provided to the middleman.

People buy stocks through the brokers. He is the middleman and helps you in buying the stocks. For this he takes commission. This can also be called as the transaction fees which we pay in order to buy the stocks. In such markets where you have to buy stocks, you have to first pay money to the broker and then start with the next step and this commission becomes important later on. The trading cost which you pay is disregarded by many of the markets but it already is a less amount and it does not matter if you include it and not exclude anyone to pay it.

Trading becomes more costly than paying the transactions as commission for the stocks.The lesser the amount of the transaction will be the more effective and active the market will become.Forex trade is said to be cost efficient in both commission and transaction fees. Foreign exchange markets are normally of 3- 4 pips in most of the major currencies. This is also an important thing to notice about the pips, if they are according to your deal size and what you aimed to have.

the width of the spread in many countries is about 1/10th of a stock transactions which contains a wide spread of 1/8 transaction. the transactions which are to paid should not have any hidden fees or any charges because later they may be asked by the brokers for the commission.

Brokers by taking these commissions play a fine game. They gain a lot of profit if there is any profit in the bid they bid you make. this is because they are the ones who lend you the stocks and help you in buying them.

If you want to be successful in the foreign exchange market, than all you need to do is find a good broker who can help you to gain profit over stocks.

Investor’s Guide for Stock Exchange Earning

Posted: 22 Aug 2010 11:47 PM PDT

WHAT ARE EARNINGS?

Earnings are simply the profit a business earns from its operations. Technically speaking, it is your sales less all your costs and expenses. In finance earnings has quite a few terminologies including Net Profit, Gross Profit, bottom line and earnings.

Earnings per Share (EPS):

This refers to the earnings returned on the initial investment. To facilitate inter/intra firm comparison EPS ratio is widely used by accountants. Mathematically, EPS is calculated by divided dividends left over for shareholders by the total number of shares outstanding.

Earning season is the number of times this ratio is published in the stock market. According to U.S.GAAP (Generally Accepted Accounting Principles), companies publish their financial reports quarterly. Prospective investors base their investment decisions on this ratio and on the basis of estimates of forecasted earnings estimates called "consensus earnings estimate".

When the actual is more than the budgeted it is known as an "earnings surprise" and the price goes up and vice versa. The accuracy of the decision depends greatly upon the accuracy of the gestimate.

WHY DO INVESTORS CARE ABOUT EARNINGS?

Earnings are important to investors for the simple reason that they influence stock prices which in turn reflect how profitable a particular business is. It does not, however, guarantee future profitability. During times of boom the expectations of people rise with the rising stock prices and prospects of greater profitability. There are two options when it comes to generating money for a business. It can either improve its products or it can give out shares to shareholders or it can buy back shares.

Although EPS is a very important measure of profitability, it involves a high degree of risk and uncertainty.