Investment Terms and Concepts

High Yield – Junk Bond – Florida Investment Loss Litigation and FINRA Arbitration Attorney

Published on: August 23, 2013 | By Russell L. Forkey, P.A.

High Yield – Junk Bond Investment Loss – Florida Litigation and FINRA Arbitration Attorney:

A High Yield or Junk Bond is a bond with a credit rating of BB or lower by a recognized rating agency such as Fitch Ratings, Moody’s Investors Services, Morningstar Rating System and others. Although the term Junk Bond is commonly used, issuers and holders of such securities prefer the securities be call high yield bonds. Junk Bonds are usually issued by companies without long track records of sales and earnings, or by those with questionable credit strength. Since they are more volatile and pay higher yields than investment grade bonds, many risk-oriented investors specialize in trading them. The phrase “risk-oriented” being the operative term.

If you are an average investor, with fairly conservative investment objectives, these types of bonds are not for you. If you own these bonds, the current yield section of your statement, more likely than not, reflects a yield of around 10% or higher but compare that against the current market value. At the end of the day, especially when comparing the maturity of the bond to your age or when you might need the principal returned, what is more important, high risk yield or the protection of your principal.

Short-Term Bond Fund – South Florida Sock and Bond Investment Loss FINRA Arbitration and Litigation Attorney

Published on: August 22, 2013 | By Russell L. Forkey, P.A.

Short-Term Bond and Common Stock Investment Loss – South Florida FINRA Arbitration and Litigation Attorney:

A Short-Term Bond Fund is a bond mutual fund which invests in short-to-intermediate term bonds. Such bonds typically mature in 3 to 5 years and pay higher yields than the shortest maturity bonds of 1 year or less, which are held by ultra–short term bond funds. Short-term bond funds also usually pay higher yields than money market mutual funds, which buy short-term commercial paper maturing in 90 days or less. Short-term bond funds, while yielding less than long-terms bond funds, are also much less volatile, meaning that their value falls less when interest rates rise and rises less when interest rates fall.

Please keep in mind that the above information is being provided for educational purposes only. However, the focus on this article, especially based on the fact that it appears that higher interest rates are on the horizon, is that the duration of the bond and rising interest rates probably will have an adverse effect on the value of the bond. Notwithstanding the foregoing, this post is not designed to be complete in all material respects. Thus it should not be relied upon as providing legal or investment advice. If you have any questions concerning the contents of this post, please contact a qualified professional.

Option Price – South Florida Option Fraud, Mismanagement and Breach of Fiduciary Duty Monetary Loss FINRA Arbitration and Litigation Attorney

Published on: August 15, 2013 | By Russell L. Forkey, P.A.

FAQ About Option Prices – Option Investment Loss FINRA Arbitration and Litigation Attorney:

The option price is the market price at which an option contract is trading at any given time. The price of an option on a stock reflects the fact that it covers 100 shares of the common stock. For example, an option that is quoted at $10 would cost $1,000, because it would be an option for 100 shares of stock at $10. The option price is determined by many factors, including its intrinsic value, time to expiration, volatility of the underlying stock, interest rates, dividends, and marketplace adjustments for supply and demand. Options on indices, debt instruments, currencies and commodities also have prices determined by many of the same factors.

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon as legal or investment advice. If the reader has any questions about the contents of this post, you should consult a qualified professional.

Form U4 – Application for Securities Industry Regulation or Transfer – South Florida Brokerage and Account Executive Attorney

Published on: August 14, 2013 | By Russell L. Forkey, P.A.

Form U4 – Uniform Application for Securities Industry Registration or Transfer – South Florida Broker/Dealer and Account Executive Alert.

The Form U4 is the Uniform Application for Securities Industry Registration or Transfer. Representatives of broker-dealers, investment advisers, or issuers of securities must use the Form U4 to become registered in the appropriate jurisdictions and with the appropriate self-regulatory organizations (“SROs”). The Form U4 elicits administrative information (e.g., residential history, office of employment, outside business activities) and disclosure information (e.g., criminal charges and convictions, customer complaints, bankruptcies) about a representative. Firms and individuals have a continuing obligation to ensure that a Form U4 is timely updated when an event or proceeding occurs that renders a prior response on the form inaccurate or incomplete.

The purpose of this post is to provide the reader with generic information relative to the Form U4. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal advice. If the reader has any questions concerning this issue, you should contact a qualified professional

High Yield Bonds – Florida Bond Investment Loss FINRA Arbitration and Litigation Attorney

Published on: August 14, 2013 | By Russell L. Forkey, P.A.

Corporate and Municipal Bond, Florida Investment Loss FINRA Arbitration and Commercial Litigation Attorney, Russell L. Forkey, Esq.

A High-Yield Bond can be issued by a private or public company, as well as various municipalities and other governmental units. Many of these High-Yield Bonds are also known as Junk Bonds. These types of bonds usually have a rating of BB or lower and pay a higher yield to compensate for their greater risk.

For example, in times of low interest rates such as are being experienced now, high-yield bonds seem attractive to investors that are seeking increased income as a means of supplementing their income. However, the trade-off is that the investor could end up suffering extreme loss of principal as a result of the business operations of the issuer or in times of rising interest rates.

Program Trading – South Florida Investment Loss FINRA Arbitration and Litigation Attorney

Published on: July 30, 2013 | By Russell L. Forkey, P.A.

Program Trading – Boca Raton, West Palm Beach, Hollywood and Fort Lauderdale, Florida Investment Loss – FINRA Arbitration and Litigation Attorney:

Program Trading is a computer-driven buying (buy program) or selling (sell program) of baskets of stocks by index arbitrage specialists of institutional traders. “Program” refers to computer programs that constantly monitor stock, futures, and options markets, giving buy and sell signals when opportunities for arbitrage profits occur or when market conditions warrant portfolio accumulation or liquidation transactions.

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not complete in all material respects. It should not be relied upon for legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

Taxable Municipal Bond – Bond Investment Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: July 27, 2013 | By Russell L. Forkey, P.A.

Taxable Municipal Bond – South Florida Bond Investment Fraud, Mismanagement and Misrepresentation, FINRA Arbitration and Litigation Attorney:

A taxable municipal bond is a taxable debt obligation of a state or local governmental entity. Taxable municipal bond are issued as private purpose bonds to finance such projects as a sports stadium, as municipal revenue bonds where caps apply or as public purpose bonds where the 10% private use limitation has been exceeded.

A municipal revenue bond is a bond that is issued to finance various types of public work projects like bridges, tunnels or sewer systems and with payments to the bondholders coming directly from the revenues of the project. For example, if a municipal revenue bond is issued to build a bridge, the tolls collected from the motorists using the bridge are committed for paying of the bond. As with all bond issues, it is important to read the indenture establishing the bond for holders of municipal revenue bonds hove no claims on the issuer’s other income or assets unless stated otherwise in the indenture. Consequently, the risk associated with these types of bonds rise and fall with the economic viability of the project.

Premium Bond – Florida Municipal, Corporate and Revenue Bond Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: July 26, 2013 | By Russell L. Forkey, P.A.

Municipal, Corporate and Revenue Bond – South Florida Breach of Fiduciary Duty, Breach of Contract and Negligence FINRA Arbitration and Litigation Attorney:

A premium bond is a bond (Corporate, Revenue and Municipal) with a selling price above face or redemption value. For example, a bond with a face value of $1,000 would be called a premium bond if it sold for $1,100. This price does not include any accrued interest due when the bond is purchased. When a premium bond is called before scheduled maturity, bondholders are usually paid more than face vale, though the amount may be less than the bond is selling for at the time of the call.

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon as legal or investment advice. If the reader has any questions concerning this post, you should contact a qualified professional.

Preliminary Prospectus (Official Statement) – South Florida Fraudulent and Misleading Offering Document FINRA Arbitration and Litigation Attorney

Published on: July 26, 2013 | By Russell L. Forkey, P.A.

Preliminary Prospectus, Preliminary Offering Document, Preliminary Official Statement – South Florida Fraud, Misrepresentation and Omission FINRA Arbitration and Litigation Attorney:

A preliminary prospectus also known as a “red herring” is the first document released by an underwriter of a new issue to prospective investors. The document offers financial details and other information about the issue but does not contain all of the information that will appear in the final prospectus, and parts of the document may be changed before the final prospectus is issued.

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. Further, this post should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

Put and Call Option Premium – South Florida Option Abuse, Misrepresentation and Negligent Supervision FINRA Arbitration and Litigation Attorney

Published on: July 25, 2013 | By Russell L. Forkey, P.A.

Put and Call Option Premium Income – South Florida Option Abuse, Excessive Activity, Breach of Fiduciary Duty, Negligent Supervision FINRA Arbitration and Litigation Attorney:

Option premium income is income received by an investor who sells a put option or call option. An investor collects premium income by writing a covered option, if the investor owns the underlying stock, or a naked option, if he or she does not own the stock. An investor who sells options to collect premium income hopes that the underlying stock will not rise very much ( in the case of a call) or fall very much (in the case of a put).

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon as legal or investment advice. If the reader has any questions relative to this post, you should contact a qualified professional.