By: Shaun Rosenberg

A bear call spread is a strategy that will let you take advantage of a falling market. One of the major benefits of this technique is that you do not have to be completely right. Even though this is a bearish strategy the stock does not necessarily have to go down for you to make money. It can go sideways or even up a little.

So how can this happen? This strategy takes advantage of calls. A call gives the buyer the right to buy a stock at a given price on or before a given day. For this they pay a premium. A seller would get the premium but would have the obligation to buy the stock at that given price on or before the given date.

With this spread you are taking advantage of the seller position. Let us look at an example. You find a stock that is at $42 and you believe it is heading down. You decide to sell the $45 call on this stock. With this you make $1.

Now as long as the stock stays below $45 you will keep the $1 profit. The problem with this is that you have an unlimited loss potential. If the stock heads up to say $70 you would have to buy it at $70 and sell it at $45. A loss of $24 considering the $1 profit.

Because you do not want to take a trade that gives you an unlimited possible loss you also buy the $50 call for maybe $.30. Now your total profit is only $.70. However, now you can buy the stock at $50 if you need to. So even if the stock goes to $70 you can still buy it at $50. Your possible loss is now only $4.3.

Because the stock only needs to stay below $45 for you to make money the chances of you succeeding are higher then if you would try to short the stock.

The bear call spread also has another twist to it. If the stock rallys to say $48 and you now believe that the stock is heading up you may choose to buy back the $45 call for a loss but keep the $50 call. Provided there is enough time left before expiration the $50 call will appreciate as the stock price climbs. It might even pay for the loss that you took on the $45 call.

For more information on bear call spreads visit http://www.stocks-simplified.com/bear_call_spread.html For more information on trading in the stock market visit http://www.stocks-simplified.com

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The principal stock exchange in Australia is no less than the Australian Stock Exchange or ASX. Tracing its roots as far back as 1861, ASX had its humble beginnings on Australia’s different states where the premier exchanges took place.

Manual trading is already a thing of the past with the establishment of Stock Exchange Automated Trading System or SEATS. When it took over, the trading system was transformed into a full-digital one. The exchange is also a public-listed company.

In December 2006, the Australian Stock Exchange merged with the Sydney Futures Exchange (SFE) which is a futures and options exchange that renders derivatives (the 10th largest of its kind in the world) in commodities, equities, currencies and interest rates. The result of two giant entities combining is the creation of the Australian Securities Exchange which is believed to be the ninth largest listed exchange in the world.

If market capitalizations will be chiefly considered, then Australia and New Zealand Banking Group (the third largest bank in Australia), BHP Billiton (the world’s largest mining company), Commonwealth Bank of Australia (the second largest in the country and with existing businesses with its neighbor, New Zealand as well as in Asia and far away United Kingdom), National Australia Bank (the largest bank as well as the largest financial institution in the country), Rio Tinto (the largest coal mining company in the world and one of the largest multinational mining companies as well) and Telstra Corporation (the largest telecommunications and media provider in Australia) are inarguably the names behind the biggest stocks traded on the ASX.

Financial services (composing 34% of the sector), commodities (20%) and listed property trusts (10%) were the top three largest sectors by market cap at the end of 2006.

The major indexes that are quoted on a periodical basis total to four and they are All Ordinaries Index (almost entirely has the common shares found in the Australian Stock Exchange that makes it the oldest index of shares in Australia), the S&P/ASX 200 (a list of the top 200 shares in the ASX), the ASX 100 and the ASX 50 (a list of the top 50 shares in the ASX). ASX 200 and the All Words indices are the most prevalent ones and which frequently being featured on news item. Investors set their focus on these indices since these two are excellent indicators of the direction where the market will be heading that’s why they are also deemed as benchmark indices. Don’t be surprised if you locate ASX on its own exchange since it is listed there and can actually be found under the code, well, guess what? Under ASX (there is a three-letter code given for each stock listed.

The shares owned by ASX, since it is a publicly-listed company as mentioned earlier, are traded on the ASX itself. Individual holdings are also limited to a small chunk or part of the company since it is indicated in the corporation’s constitution. The Australian Securities and Investments Commission regulate ASX since it cannot conduct the regulation on its own self. Still, it is ASX that regulates the companies listed on it.

Robert Elstone is the present ASX Managing Director (he was the CEO of SFE before the merging occurred).

Paul Adams 1st , has been associated with Australian Stock Exchange in Australia.

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Value investing defined by Benjamin Graham. He had written two great books as Security Analysis and intelligent Investor. Benjamin Graham (May 8, 1894 – September 21, 1976) was an influential economist and professional investor. Graham is considered the first proponent of Value Investing. Well known disciples (students and teaching assistants) of Graham include Warren Buffett, William J. Ruane, Irving Kahn, Walter J. Schloss, and Charles Brandes. Buffett, who credits Graham as grounding him with a sound intellectual investment framework, described him as the second most influential person in his life after his own father. In fact, Graham had such an overwhelming influence on his students that two of them, Buffett and Kahn, named their sons, Howard Graham Buffett and Thomas Graham Kahn, after him.( By Wikipedia)

1. Value Investors don't believe efficiency Market hypothesis (EMH)
2. Efficiency Market Hypothesis means that as anything that may affect prices that is unknowable in the present and thus appears randomly in the future
3. Value Investors don't predicated any stock price 4. They are looking for a good performance company based on past performance and current information
5. They always evaluate company financial report to find a good company.
6. They find a stock value not a stock price
7. They don't need watch stock price day by day.
8. They find a Intrinsic value of a company. Intrinsic value means that the present value of cash that an assets generated from the business
9. They find under value of a stocks
10. They evaluate company's balance sheet, Income statements and cash flow statement, looking for signs of hidden value.
11. They like a stocks with a low Price to Earning Ratio.
12. In fact, value investors need spend a more time to evaluate a stock to find a intrinsic value or fair value
13. And they need a stock price sufficient margin of safely. They find a underground stock price
14. They hold a good stocks or company over a long period until some good conditions changed.
More information : www.valueinvestingnotes.com

William is value investing notes writer.His Value Investing Notes are 34 pages only. He wrote in short form and point. Reader can understanding value investing easily. www.valueinvestingnotes.com

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