Which brand of oil should I choose?
Brent Crude and WTI (West Texas Intermediate) are two of the most common crude oils used in global trade. When choosing between them, consider the following factors:
Metals such as gold and silver have a rich history of use as a medium of exchange, store of value, and investment asset. They attract the attention of traders with their stability and demand in the market. At the same time, metals have unique characteristics that make them interesting objects for analysis and trading.
Metals trading provides traders with many opportunities for profitable trading and investing. In this article, we will look at various aspects of metals trading, starting with an overview of the different types of metals and their characteristics as financial assets.
Why do traders choose metals as a trading instrument?
Metals attract traders for several reasons:
- Diversity of assets. There is a wide variety of assets available in the metals market, allowing traders to select options that suit their strategy and goals.
- Portfolio diversification. Investing in metals serves as a means of diversifying an investment portfolio.
- Inflation protection. Precious metals such as gold and silver are often seen as safe haven assets against inflation and economic instability. Traders use them as a tool to preserve the value of capital.
- Liquidity. Most metal markets are characterized by high liquidity, which allows for prompt entry into transactions and their closure.
Overview of metals available for trading
- Gold. This precious metal is known for its stability in times of crisis, making it a desirable asset for diversifying investments.
- Silver. Despite its lower cost compared to gold, silver is in demand as an investment asset due to its wide range of industrial uses.
- Platinum. A rare metal that is used in the automotive and jewelry industries. This makes it attractive to investors.
- Copper. Copper’s key role in electrical engineering makes it an important economic indicator reflecting the health of the industry.
- Aluminum. Lightness and strength make aluminum indispensable in the transport and construction industries, as well as in packaging production.
- Zinc. The main use of zinc is to protect steel from corrosion, which plays a key role in the construction and automotive industries.
- Nickel. Essential for the creation of alloys and batteries, nickel plays an important role in modern technology and energy.
Metals market analysis
Analyzing metal markets is the key to success in trading. Let’s look at the main elements of fundamental and technical analysis of these markets, as well as the indicators and tools traders need to make informed decisions.
Fundamental Analysis
Fundamental analysis is based on a thorough study of the factors that determine the supply and demand of metals. Key fundamental aspects include:
- Economic data. Traders track economic indicators such as GDP, consumer price index (CPI) and manufacturing activity to understand the current state of the economy and potential demand for metals.
- Geopolitical events. Conflicts, trade wars and political events can affect metal prices. For example, instability in metal-producing countries could lead to a reduction in supply.
- Seasonal factors. Some metals are subject to seasonal fluctuations in demand, such as holidays or construction seasons.
- Macroeconomic events. Central bank decisions on interest rates and exchange rate policies also affect metal prices.
Technical analysis
This method is based on studying past price data and trading volume to predict future price movements. Technical analysis of metal markets includes the following aspects:
- Price charts. Analysts use price charts and candlestick patterns to identify trends and key support and resistance levels.
- Indicators. Technical indicators such as moving averages, relative strength index (RSI) and stochastic oscillator help assess whether metals are overbought or oversold and predict trend reversals.
- Trading strategies. Using technical analysis data, traders develop trading strategies, including tactics based on reversals, breakouts and long-term investments.
Based on their trading strategies and investment goals, traders determine how to choose between fundamental and technical analysis, and consider combining them for more effective trading.
More than $5 trillion worth of stock options, index options and stock index futures expire today. In addition, the S&P 500 and Nasdaq-100 will be rebalanced on the same day
The redemption volume reaches 8% of the SPX market capitalization. This is the maximum since 2012. Source: Google
Analysts warn that events could move quickly and volatility could be off the charts as billions of dollars worth of contracts and securities change hands on this day. The face value of options expiring today is $5.3 trillion, with the largest redemptions taking place before the start of the American session.
On the one hand, many traders will take profits on bullish positions, but some will choose to roll them over to the next period to maintain risk hedging. Index fund managers will have to complete adjustments to their holdings before the announced index changes take effect.
Trading volumes have been growing since the beginning of the week. On the American stock market, stock trading volume reached $17 billion, Steve Sosnick, chief market strategist at Interactive Brokers, said this during a telephone interview with News. For comparison: on Tuesday, trading volume did not exceed $10.6 billion.
“Tomorrow the volume of trade in popular categories will be huge,” Sosnik added. “This is the largest option expiration of the year, which is understandable, December is always like this. But that is not all. Today’s event will likely be the largest redemption of SPX options in the last ten years,” Fishman said in comments to MarketWatch.
Brent Kochuba, founder of options market analytics platform Spotgamma, went even further, saying “this is the largest options redemption ever.”
There is a distortion in the market
Traders were buying bull options at a record pace amid surging markets, according to data from Cboe Global Markets, the largest operator of options exchanges in the United States. Trading volume in S&P500-related options reached 4.8 million contracts on Thursday, surpassing the previous all-time high reached on November 14, according to Cboe. Additionally, total trading volume in call options on all U.S. stocks topped 30 million contracts on Wednesday, marking the strongest bullish contract activity this year, according to Goldman Sachs Group.
Aggressive stock buying over the past month has helped push the S&P 500 close to an all-time high (based on closing prices), options market experts say. The S&P 500 SPX rose 8.9% in November, which was the best month of 2023 of the year and the eighteenth-best month in the last 73 years. It continued to rise in December, according to FactSet data. Since the beginning of the month, the index has risen by 3.3%.
Earlier this week, analysts warned that markets could face trouble as the S&P 500 approaches the 4,600 level. They explained that a “wall” of open interest in call options near that level could force market makers to put the brakes on the rally. However, traders knocked down that wall and pushed the index to 4700. The S&P 500 closed at 4719.55 on Thursday, its highest close since Jan. 12, 2022, according to FactSet data. The index is currently within 1.75% of its record close set on January 3, 2022 at 4796.56.
Traders’ bullish sentiment recently helped push the Cboe VIX volatility index, also known as Wall Street’s “fear gauge,” to multi-year lows.
It’s not just options and S&P 500 contracts tied to popular stocks like Tesla Inc. that generate volume. Call options trading volume tied to the iShares Russell 2000 ETF IWM (which tracks small-cap companies in the Russell 2000 Index) reached 1.35 million contracts, the third-highest ever, according to Goldman. Activity in options contracts related to small-cap stock indexes has been increasing since late October.
Heavy call option buying has driven the S&P 500 put-call ratio to its lowest level in a year, according to Goldman Sachs Group. This suggests that investors were buying up bullish contracts but avoiding bearish ones due to the sustained rise in the stock market. Goldman analysts are calling Friday “the last big event of the year.”
A unique coincidence of circumstances
“Triple Witching Friday” or “Witch Friday” happens once a quarter. On this day, futures on stock indexes, as well as options linked to individual stocks, ETFs and indices, expire. Experts note that they are usually characterized by more intraday fluctuations and higher trading volume.
This time the S&P 500 and Nasdaq-100 will be rebalanced after the markets close on Friday. This is typically a routine event, but it came into the spotlight this quarter because funds were forced to rebalance over the summer to limit exposure to large-cap Nasdaq-100 stocks.
Earlier this month, Standard & Poor’s announced its rebalancing plans, which included reducing the weighting of shares of Apple Inc and Alphabet Inc. GOOG, -0.57% GOOGL, -0.48%. At the same time, Amazon’s share. com will be increased. Three companies, including Uber Inc, will also join the index, while three others will leave it.
Kochuba believes this Friday’s expiration could remove the final barrier holding stocks back to record highs for the rest of the year.
“After OpEx, markets will no longer be held back,” he noted. OptionMetrics’ Garrett DeSimone cautioned that investors shouldn’t put too much weight on options market activity and other technical factors.
“At the end of the day, it’s all about macroeconomics,” he told News.
Что такое торговая сессия в трейдинге?
Торговая сессия — время, в которое возможна торговля определенным видом активов на определенной площадке. Часы сессии варьируются в зависимости от класса активов, конкретной биржевой площадки и ее географического положения.
Какие бывают торговые сессии
Какое время максимально комфортно для трейдинга?
Форекс функционирует на протяжении всех суток в будни. И это понятно — везде свои часовые пояса. Валютный кэш нужен крупнейшим игрокам, включая центробанки и крупнейшие корпорации, на постоянной, бесперебойной основе.
Веллингтон — маленькая биржа с маленькими объемами. Поэтому настоящий активный трейдинг начинается после пробуждения Австралии (Сидней) и Японии (Токио). В это время в фокусе внимания трейдеров — иена, юань, сингапурский доллар и т.д.
Торгуемые обороты достигают максимальных значений после активации лондонских торгов. Это топовая биржа с максимальными объемами. Здесь максимально активны миллиардные инвестфонды и банки Европы.
Далее, когда лондонские трейдеры идут обедать — в игру вступает Нью-Йорк, номер два по оборотам Форекс-биржа.
Пиковый по реализуемым оборотам трейдинг происходит в лондонское дневное время и в нью-йоркское утро. После закрытия лондонской площадки американская биржа — самое популярное торговое место вплоть до конца дня.
Минимально активное время — пересечение окончания сессии в США и открытия новозеландской сессии. Ну и после открытия Австралии торговля заходит на очередной повторяющийся цикл.
Европейская, американская и азиатские сессии: когда начинаются
Исторически в расписании Форекс-сессией выделяют три главных временных отрезка (МСК +3 GTM (+4 GTM)):
- Азиатская сессия: 03:00 – 11:00 (04:00 – 12:00 по летнему времени);
- Европейская сессия: 09:00 – 17:00 (10:00 – 18:00 по летнему времени);
- Американская сессия: 16:00 – 24:00 (17:00 – 01:00 по летнему времени).
Трейдеры живут в разных часовых поясах. Чтобы не возникло путаницы по времени, удобнее всего пользоваться вот такой таблицей.
Расписание торговых сессий по московскому времени
Moderna’s CEO said the company’s experimental melanoma vaccine could be available by 2025. The company’s shares reacted with rapid growth
Shares of biotech company Moderna rose 20.78% to $94.93 on the NASDAQ stock exchange as of 5:43 p.m. Moscow time. Demand for the stock surged amid Moderna CEO Stephane Bancel’s announcement that the company’s experimental melanoma vaccine could become available in just two years. According to the CEO, Moderna expects the product could be launched on an accelerated basis in some countries by 2025, Barron’s writes. According to the publication, in 2020, 325 thousand new cases of melanoma and 57 thousand deaths from this disease were registered worldwide. Unlike conventional vaccines, so-called therapeutic vaccines treat rather than prevent disease.
Clinical trial results showed improved chances of survival over time with the vaccine, which uses the same messenger RNA technology that has been shown to be highly effective against severe forms of COVID-19. Creating a cancer vaccine involves analyzing the genetic sequence of each patient’s tumor to create personalized therapy after surgery. The study involved 157 people diagnosed with stage III–IV melanoma. Moderna’s experimental vaccine combined with Merck’s immunotherapy drug Keytruda reduced the risk of relapse or death by 49% over three years compared with Keytruda alone.
Last year, Moderna announced the results of two years of monitoring, which showed a 44% reduction in risk. Thus, existing clinical data could form the basis for conditional approval of the vaccine, Bancel said. Modern’s shares have fallen by about 48% since the beginning of the year. At the end of the third quarter of 2023, the biotechnology company reported a net loss of $3.6 billion. The company attributed the loss mainly to one-time write-offs associated with reduced capacity to produce COVID-19 vaccines. The company’s revenue decreased by 1.8 times – to $1.831 billion. The company announced that it plans to reach breakeven in 2026.
Currency price. Visitors to our site know that currency can not only be a means of payment, it can also be a product that can be bought or sold. If all the states of the world used one currency, then it would be difficult to talk about its commodity function. But the world works differently. Most countries issue and use their national currency. This is what you can buy with the currency of another country.
But in this case, the question arises of the price at which such a trading operation can be carried out. The exchange rate allows you to determine this price. What is it? How are exchange rates calculated? We will try to answer these questions.
- What is the exchange rate?
- Types of exchange rates
- Currency convertibility
- Types of currency convertibility
- Factors influencing the value of a currency
- Conclusion
What is the exchange rate?
So, what is an exchange rate? It is generally accepted that the exchange rate is the price of the currency of one country expressed in the currency of another.
One of the main criteria when determining the exchange rate is the purchasing power that the currency has. In economic theory there is a law of one price. Based on this law, the basic value of the national currency exchange rate is determined. The calculation is carried out in the following sequence:
The assumption is made that the value of a product remains constant in any country, no matter where it is located.
The product is valued in national currency (Pd).
The same product is valued in foreign currency (Pf).
The ratio of these prices will be the desired value of the exchange rate of the national currency to the foreign currency.
Types of exchange rates
It is important not only to understand what the exchange rate is. Its types are also of great importance for understanding the essence of commodity-money relations. There are the following types of exchange rates:
- Market. The exchange rate formed under the influence of market factors, the main of which are supply and demand, is considered market rate. Investors’ interest in currencies is inconsistent. Therefore, the market rate is in constant motion. A currency rises when there is increased demand for it and there is a lack of supply, and a fall occurs when supply exceeds demand.
- Official. The rate established by the decision of the national regulator is official. It can be set for different time periods. If the official exchange rate does not correspond to the market rate, the regulator must do everything in its power to minimize this discrepancy.
- Exchange. This rate means the price at which currency is currently being purchased or sold on the exchange. For example, when the euro/dollar exchange rate falls on the stock exchange, it is profitable to buy euros at the exchange rate, spending a minimum amount of dollars on it.
- Buyer’s rate. In market conditions, there is a price that a buyer is willing to pay for a particular currency. It is this price that determines the buyer’s rate. It is also considered that at this rate the resident bank makes the purchase of foreign currency.
- Seller’s course. There are different interpretations of this exchange rate, but the essence comes down to the following – this is the lowest price at which the currency seller is ready to make a transaction.
- Exchange rate. This rate allows you to find out how many units of national currency you need to have on hand to purchase a unit of foreign currency. Typically, the exchange rate consists of two prices – the purchase price of the currency and the sale price.
The exchange rate and its types can operate in a certain mode. There are two such modes:
- Floating. In this mode, the state does not have a decisive influence on the exchange rate. Its formation is influenced only by market factors, and exchange rate movements occur as a result of changing supply and demand.
- Fixed. The state, through its financial regulatory authorities, sets a fixed value for the national currency exchange rate. It can be established for a certain period or operate continuously.
Currency convertibility
Speaking about exchange rates, one cannot fail to mention such a concept as convertibility, which determines the ability of a currency to be freely exchanged for one another. The degree of convertibility of a particular currency depends on the decision of the relevant government body entrusted with the function of currency regulation.
It is generally accepted that the convertibility of currency issued by a state is one of the main indicators of the openness of the economy of this state, its ability to compete on equal terms in the global labor and capital markets.
Types of currency convertibility
In practical application, currency convertibility is divided into types, the main ones being the following:
Full convertibility. This type of convertibility implies free access for all residents and non-residents to unlimited exchange of national currency for foreign currency. Only countries with developed economies can afford this type of conversion. The only freely convertible currencies include the US dollar, British pound, Japanese yen and euro.
Partial convertibility. In conditions of partial convertibility, transactions with the national currency are subject to restrictions by the issuing state, allowing it to be exchanged only for a certain list of foreign currencies.
Internal convertibility. Under the conditions of this type of convertibility, only residents are given the right to purchase foreign currency for making foreign economic payments.
External convertibility. This type of convertibility allows only foreign citizens and companies to bring their capital into the country and exchange it for the national currency.
Closed currency. If there is a ban on the part of the issuing state on the exchange of national currency for foreign currency, this currency will be considered inconvertible (closed). It can function only in a limited territory of the state that issued this currency into circulation.
Factors influencing the value of a currency
Macroeconomic indicators of the state
- Foreign trade balance of the country. If exports of goods and services exceed imports, this will have a positive effect on the value of the national currency. As the country’s gold and foreign exchange reserves grow, the national currency strengthens and its value becomes higher.
- Inflation rate within the country. The exchange rate of a currency directly depends on its purchasing power. A high inflation rate in a country leads to a decrease in the purchasing power of the national currency, which means that its value falls.
- Dynamics of gross domestic product (GDP). GDP growth has a positive effect on the value of the national currency, since with its growth the inflation rate decreases and, as a rule, the influx of foreign investment increases.
- Budget deficit level. The balance of the state budget, the absence of additional emission of money that is not supported by the gross domestic product, allows the national currency to strengthen.
- Government debt obligations. With an increase in public debt to foreign creditors, the burden on the country’s balance of payments increases. Debt servicing leads to an outflow of foreign currency from the country, as a result of which the demand for it increases and the depreciation of the national currency.
State monetary policy
- Foreign exchange intervention carried out by a national bank. The bank independently enters the market and buys or sells currency, which in the short term affects the value of the national currency and its stability.
- National bank interest rate. The bank’s board can change the level of the discount rate, which affects the value of the currency. Lowering the interest rate contributes to the revival of the national market, GDP growth and the availability of loans for individuals and legal entities. As a result, the national currency rate strengthens. But at the same time, investors are not interested in low interest rates. They withdraw foreign currency from the country, which in the long term negatively affects the value of the national currency.
Socio-political situation in the country. The currency is very sensitive to any events taking place in the state. Its cost is negatively affected by:
- Military conflicts.
- Strikes and civil strife.
- Unconstitutional change of power.
- Violation of the territorial integrity of the state.
- Instability of legislation relating to currency regulation.
The price of a currency depends on many factors. Moreover, this dependence in most cases is ambiguous. The market reacts very sluggishly to some events and the price practically does not change. Other seemingly insignificant events cause panic in the market, and the price of the currency rapidly changes in one direction or another.
One of the reversal patterns on the chart is head and shoulders. This model has clear rules for construction and identification. However, there are some of its configurations that also indicate a trend reversal.
Reversal patterns of technical analysis
Before changing direction, the prevailing trend in the market will give a signal. This is what the founder of technical analysis, Charles Dow, said. Based on how the price behaves, we can draw a conclusion about what is happening with the balance of power in the market.
When a trend changes from upward to downward, one of three patterns can be seen on the chart: head and shoulders, double top and triple top. They are sometimes confused by calling double top and double head and shoulders.
To understand why a reversal occurs, you need to know what a head and shoulders pattern means. Price growth in an upward trend is due to the dominance of buyers. After the growth stage, some players take profits, provoking a downward correction. However, in an uptrend, each subsequent low and high are higher than the previous one.
The moment a head and shoulders, double top or triple top (a variation of the head and shoulders pattern) appears on the chart, it becomes clear that the price cannot overcome the previous high. This means that the strength of the bulls is weakening, and dominance is passing to sellers, foreshadowing a break in the trend.
How does the head and shoulders pattern work?
Regardless of whether a double head and shoulders, double or triple top pattern appears on the chart, these patterns trade approximately the same.
First, it is necessary to correctly define the model – it must be preceded by an upward trend. In a downward trend, these figures will be formed in a mirror image: triple and double bottoms, head and shoulders inverted (inverse) will be signals of a change from a downward trend to an upward one.
Secondly, using the lows of the figures formed at the top of the uptrend, it is necessary to draw a neckline. This is the border, upon the breakdown of which a bearish signal is formed.
A sell trade must be placed after the neck line is broken. Already on the next candle after the breakout, which has opened and is forming below the level, you can open a position.
To determine the target and take profit, it is necessary to measure the height of the figure’s head or the overall height of the pattern if we are talking about a double or triple top pattern. It must be moved down from the breakout line and a take profit should be set there.