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Trading and Information Sources. Presented by: Chen Cheng-Chung James Eisenman Hiren Ghala Jason Oien. Trading. The Trading Procedure. The analyst has an idea to buy/sell The analyst convinces the portfolio manager (PM) to take action The PM tells the internal trader to buy/sell

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trading and information sources

Trading andInformation Sources

Presented by:

Chen Cheng-Chung

James Eisenman

Hiren Ghala

Jason Oien

the trading procedure
The Trading Procedure
  • The analyst has an idea to buy/sell
  • The analyst convinces the portfolio manager (PM) to take action
  • The PM tells the internal trader to buy/sell
  • The internal trader calls the best broker with the order
  • The broker calls the commission broker on the exchange
  • The commission broker goes to the specialist who completes the deal
the back office trading procedure
The Back Office Trading Procedure
  • Broker executes trade (sell/buy)
  • Broker informs Deposit Trust Corporation (DTC) about trade (sell/buy)
  • DTC informs State Street Bank (custodian) to transfer shares/cash to the DTC
  • Shares/cash are transferred to DTC with T+3 business days
  • DTC transfers shares/cash
determining who to trade through
Determining who to trade through
  • Quality of service
  • Research
  • Relationships
  • Costs
trading costs
Trading Costs

Actual Cost % Cost

  • Commission 6 cents/sh 12 bps
  • Market Impact 9 cents/sh 20 bps
  • Delay Costs 24 cents/sh 53 bps
  • Missed Trades 8 cents/sh 16 bps

Total 47 cents/sh 1.01%

* Plexus Estimates

who will you trade through
Who will you trade through?
  • Our Broker List

-Prudential Securities

-Salomon Smith Barney

-A G Edwards and Associates

-Voyager Institutional Sales

when to execute trades
When to execute trades
  • Timing is everything
  • Depending on the urgency trades will be executed the same day or the next day
  • Trading volumes are usually low before the market closes
types of orders
Types of Orders
  • Market
    • Order is executed immediately
    • Execution of order is time sensitive
types of orders10

Condition

Price above the limit

Price below the limit

Limit-buy order

Stop-buy order

Buy

Action

Stop-loss order

Limit-sell order

Sell

Types of Orders...
  • Limit
benchmark information
Benchmark Information
  • Standard and Poors
    • www.spglobal.com
economic information
Economic Information
  • Bureau of Economic Analysis
    • www.bea.doc.gov
  • Bureau of Labor Statistics
    • http://stats.bls.gov
economic info con t
Economic Info con’t
  • Federal Reserve Board
    • www.federalreserve.gov
market websites
Market Websites
  • Bloomberg.com
    • Comprehensive site
  • First Call
  • Reuters
    • Reuters StockVal
specific company info
Specific Company Info
  • Yahoo Finance – financial data, reports and quotes http://finance.yahoo.com
  • Wall Street Journal www.wsj.com – data and news
more financial websites
More Financial Websites
  • Signalwatch.com - Technical Analysis - Charts using support and resistance levels
  • Wall Street Week - Industry Executives giving their thoughts and picks
  • Etrade Financial - Trading website that provides a minimum amount of info to non-members
analyst reports and financial data
Analyst Reports and Financial Data
  • Multex www.multex.com – Analyst reports from various firms
  • The Street www.street.com
  • Motley Fool www.motleyfool.com
  • Bloomberg www.bloomberg.com – Analyst reports, exchange rates, quotes
  • Value Line http://www.valueline.com
  • Morningstar www.morningstar.com – data and analyst reports
annual reports and filings
Annual Reports and Filings
  • Edgar Scan - 10 K’s and Q’s
  • www.sec.gov – for 10 K’s and other company specific reports
  • Annual Reports Gallery www.reportgallery.com
ratings
Ratings
  • Together they are the two of the most prevalent ratings firms on Wall Street
  • www.standardandpoors.com
  • www.moodys.com
sell side websites
Sell Side Websites
  • A.G. Edwards
  • Bear Stearns
  • Merrill Lynch
  • Prudential
  • Salomon Smith Barney
  • UBS Warburg
financial website practice
Financial Website Practice
  • Yahoo Finance http://finance.yahoo.com/
  • Stock Research
  • Basic Report
  • Detailed
  • Chart
  • Research
  • Msgs
financial website practice23
Financial Website Practice
  • How to manage a portfolio?
  • Open a portfolio account
  • Sign in
  • Sector overview
  • Create your own portfolio
  • Manage your Portfolio

-Example market index

-Basic feature

-Advance feature

financial website practice24
Financial Website Practice
  • Useful Tools
  • Recent news & Financial news
  • Education - investment tips

- financial dictionaries

financial website practice25
Financial Website Practice
  • Morningstarhttp://www.morningstar.com/
  • Snapshot
  • Morningstar grade

-Growth

-Profitability

-Financial Health