limiting upside
German translation: begrenztes Kurspotenzial
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| 12:54 Aug 23, 2001 |
| English to German translations [PRO] Bus/Financial - Investment / Securities | |||||||
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|  Selected response from: Ralf Lemster Germany Local time: 19:18 | ||||||
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| Summary of answers provided | ||||
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| na | nach oben begrenzt/gedeckelt |
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| na | begrenztes Kurspotenzial |
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Answers
54 mins
nach oben begrenzt/gedeckelt Explanation: limiting upside - here an usage example - in dem Beispiel entspricht es eigentlich einem Verkaufslimit, Begrenzung nach oben Our favorite idea for outperforming the market in 2001 involves taking advantage of other people's excessive optimism. Now that many of the stocks we like for the long term are significantly below their highs,fear of further losses may prevent investors from buying them. There is a way to buy these stocks at current levels and generate income even if the stocks do not go up over the next 12 months. Writing a covered call involves buying a stock and simultaneously selling or "writing" a call option. This is a way of reducing losses if the stock falls in price, at the cost of limiting upside return if the stock rises more than expected. How It Works Here is an example. As this is written, the share price of Applied Materials Inc. (AMAT) is $38 (prices are rounded for convenience) down from a high of $115. This company, in the notoriously volatile semiconductor industry, has proven its dominant position in the semiconductor equipment business over multiple cycles. An investor buying the stock today at $38 could write a call option, which will expire in January 2002, at an exercise price of $45 and receive a premium of $9.50, lowering his break-even price to $28.50. Writing or selling a call option gives the buyer of the option the right to buy the stock from the call writer at the exercise price.If AMAT stays below $45, then our investor will still own the stock and will have received $9.50 (33%) in premium income from the strategy. If AMAT goes above $45 and the buyer of the option exercises his right to buy the stock from our investor at $45 (the strike price), then our investor will have made $16.50 ($9.50 income plus $7 profit)-some 58% on his $28.50 cost base. However, the position is now closed and he cannot benefit from any further price gains in the stock (unless he buys more at the new price). On the other hand, if AMAT falls to the break-even price of $28, the investor may buy more stock if he remains confident of the stock's longer-term prospects. He could then repeat the call-writing process and still not be in the red. As you can see, an investor who is willing to limit his upside at 58% makes a profit if the stock rises slightly or remains near the current price. In a modest upside environment for the stock market, we think this is a suitable strategy for 2001. Im Deutschen wird auch das Verb deckeln verwendet, spricht fuer sich selbst ... somit koennte man auch - gedeckelt - sagen. Siehe noch: Darüberhinaus, wo es sich um "echte Sanierung" dreht, werden Leistungen absolut begrenzt (gedeckelt): z. B. sind Bezüge von Sozialleistungen während der Lebenszeit mit 5 Jahren begrenzt, die maximal möglichen Leistungen in einem Stück mit zwei Jahren. Darwinsche Gesetze also: "Survival of the fittest!" Regards, Martina Reference: http://www.firstunionsec.com/pdf/outlook2001.pdf Reference: http://www.staatsbriefe.de/1994/andbeitr/wunder.htm |
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1 hr
begrenztes Kurspotenzial Explanation: Die Hinweise auf eine Unterbewertung [des Marktes] werden zunehmend neutralisiert; damit wird das Kurspotenzial begrenzt. [The more a market is seen as undervalued in relation to a theoretical pricing level, the higher the probability of a price recovery...trouble is, that's what investors in EM-TV thought, too...] Own experience as a financial markets trader |
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