Category Financial Investment

Private Equity – The Unique Growth Strategy

euro-notes

Most businesses start small. It is the hope of the owners of these businesses that they will eventually grow to be big. In the world of business, it makes sense to start small. This is important at this stage because of limited resources which necessitates the minimization of operational and other expenses. The bigger the business, the harder it will be to keep tabs on expenses. Small businesses cannot afford to make major commitments which would entail large expenditure. There are many problems which are encountered by small businesses but which larger ones are immune from. Limited access to capital and better markets is one of the shortcomings of small businesses.

Private equity is the form of business financing whereby an investor puts in his money and becomes part owner and part lender. Many business owners going for private equity often have to forfeit their majority shareholding because the financier brings in large amounts of money as compared to that initially put in by the business founders. Private equity differs from borrowing from banks and other financial institutions. Those who give private equity end up as part owners of the business. However, part of the money may still be part of a repayable loan.

Many small businesses that previously acquired private equity are the big companies that can be seen today. They made use of the rare source of finance that private equity offers.

 

Most start-up companies do not make it beyond the first few months of operations. The passion possessed by the owners of these companies does not seem to enhance their success in any big way. What they need is bigger capital, more reliable markets, and better networks and expertise. These are some of the opportunities which are exploited by getting private equity. It is also useful in preparing a business for sale at a good profit.

Despite its unique advantages, private equity has some shortcomings. Business owners who attach importance to sentimental value are not favored by the model. Providers of private equity are only interested in the performance figures and not much else. It is also uncomfortable for many business founders who have to work as employees in the companies they started and answer to somebody else. Investors put in private equity so as to raise the value of the business and sell it. This is not good for those who want to keep the business for posterity.

If a business owner is considering private equity to boost his business, there are several factors to consider before taking the step. The first thing is assessing and deciding if this is the only way available to raise the capital required. Secondly, it is important to come to terms with the prospect of giving up control of the business. An owner who is not ready for the changes that a potential investor would demand for should not go for private equity. Finally, if the business is something one wants to retain in the family for long he should avoid private equity.

Getting smart investment strategy with China Sonangol

 

venture capital vs private equity infographic

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8 Beginner Tips and Strategies for Options Trading

Stock Trading

Options trading is available for the Singapore trading markets. This type of derivatives trading uses a trading platform that is tailored to this financial product, has regulation and compliance oversight for the account deposits that are opened, and has its own interpretation of prices and structured strategies.

 

Tips for Trading in Options

This selection of derivatives trading can have its own price structure and trading strategies. A course in options trading can present the various methods of using a trading platform. A novice options trader can attend FREE trading seminars in Singapore in order to learn various methods of options trading. The following are tips for trading in options for the novice trader:

 

1. Options are binary in structure. This means that an options product can go only one of two ways.

2. An option that is purchased can go up in value or down in value.

3. A buy can involve a call or up option, and a buy can mean a put or down option.

4. This means that the options investor can go long and purchase an option or can go short and sell an option for profit.

5. Options have varying expiration dates. An expiration can be in 60 seconds or can be at the close of the trading day.

 

Strategies for Investing in Options

An investor who has decided to invest in options has a potential return on this investment that is usually known before the purchase is completed. An option can be purchased on any financial product and in both directions of trading. The following are additional strategies for buying and selling options derivatives:

6. An option can be a cash or nothing purchase. This means that the derivative option that is purchased will have an expiration date.

7. The purchased option can expire in the money and have a profitable pay out at the expiration closing.

8. An option can be an asset or nothing investment. This type of investment strategy is similar in structure to the cash or nothing plan. An asset or nothing option has an expiration and a pay out at the close of the expiration period. The underlying security asset has a value that is paid out to the successful investor.

 

 

Stock Infographic

 

 

Other Types of Options

Options are sometimes referred to as all or nothing options. Digital options are common in the currency markets (also see How to Trade Foreign Exchange With $100). Fixed rate options can be purchased as well. Options that are binary in structure are often called European in style.

 

Summary

Options traders can attend seminars available in the Singapore trading areas. These courses can provide further information about trading in this type of derivatives market. The classes have a hands on practice application that allow a novice trader to practice certain trading strategies. A new trader to the derivatives markets can further understand the terminologies used in this trading market. This type of trading has a certain and known outcome before a purchase is made. An option can expire profitably.

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