Saturday, July 21, 2012

Nasdaq boosts Facebook compensation plan to $62 mln

Nasdaq OMX Group Inc plans to pay out $62 million in cash to firms that lost money in the bungled Facebook Inc initial public offering in May, modifying an earlier plan that drew intense criticism from market makers and other exchanges.


The fund, which Nasdaq said on Friday it would file with regulators, is $22 million larger than originally proposed in June. All accommodations will be paid in cash, a departure from the prior plan in which Nasdaq would have mostly compensated firms through trading credits or rebates.


All payouts are expected to occur within six months.


Market makers lost upward of $200 million due to technical glitches on the IPO when Nasdaq's systems could not handle the massive amount of orders and cancellations ahead of the IPO.


The market makers, which facilitate trades for brokers ensuring smooth market operations, said Nasdaq's original plan fell far short. Some said they were considering legal action.


The original plan also drew the ire of other exchanges, which said the trading credits would force the firms to trade on Nasdaq.


NYSE Euronext and BATS Global Markets on Friday declined to comment on the new proposal.


The botched IPO has been a communications nightmare for Nasdaq, which prides itself on its technology.


It is also a black eye for an exchange industry already suffering from lost investor confidence after both the financial crisis and the "flash crash" in May 2010, when $1 trillion in shareholder equity was temporarily wiped out in minutes.


"We deeply regret the problems encountered during the initial public offering of Facebook," Nasdaq CEO Robert Greifeld said in a statement. "We failed to meet our own high standards based on our long history of providing outstanding technology to our members and exchange customers."


Greifeld said the exchange has learned from the experience and will continue improving its trading platform.


The Financial Industry Regulatory Authority, Wall Street's self-regulator, has agreed to evaluate claims submitted under the program. The filing of the accommodation program with the SEC begins a comment period, Nasdaq said.


Facebook's $16 billion IPO was to have been the culmination of years of breakneck growth for a social network that became a cultural and business phenomenon. But the shares of the eight-year-old company founded by Mark Zuckerberg in his Harvard dormitory room have sagged since going public at $38 a share.


Facebook shares fell 0.8 percent on Friday to close at $28.76.


Nasdaq's four largest market makers in the $16 billion Facebook IPO -- UBS, Knight Capital Group, Citadel Securities, and Citigroup's Automated Trading Desk -- have estimated that they lost $200 million from Facebook trades entered May 18.


In addition, news reports have said UBS may have lost considerably more, perhaps $350 million.


Citadel said it had no comment on the new plan, while the other market makers were not immediately available for comment. Nasdaq announced the filing late on Friday.


The losses were caused at least in part by Nasdaq technical problems and a communications breakdown that prevented market makers from knowing for hours if their orders had gone through. Some orders were lost altogether.


Knight Capital and UBS have hinted that they could bring legal action against Nasdaq if the compensation does not cover their losses.


Source: Reuters

(Reporting by Rick Rothacker, John McCrank, Karey Wutkowski and Herb Lash; Editing by Bernard Orr, Andre Grenon, Gary Hill)

Friday, July 20, 2012

Understanding price charts for effective technical analysis

Technical Analysis for analysing securities and making investment decisions has been one of the most preferred ways of tapping into the pulse of the market. And at the nucleus of this function is the factor of price and price charts that ultimately govern the process of technical analysis.





Price Charts are one of the most efficient ways of tracking and inferring price movements, studying supply and demand, and assessing future trends. A typical price chart is depicted on the X-Y scale wherein the x-axis (horizontal axis) represents the time scale and y-axis (vertical axis) represents the price scale.

Apart from the basic Open-high-low-close chart (also known as OHLC charts) where the opening, highest, lowest and closing price of scrip is taken into account, there are three other ways of charting scrip prices.

1. Line Chart or Close price chart: This is the most basic method of plotting prices, representing only the closing prices over a set period of time on an X-Y graph. This type of graphical representation helps discount intraday swings and is useful when open, high and low point data is not available.

2. Bar Chart:

A popular method of plotting prices, Bar Charts take into account high, low and close point data of a stock price for a particular day. The chart is made up of a series of vertical lines, each representing the high, low and closing price of scrip. The opening price is illustrated by a dash on the left side of the vertical bar while the closing price is plotted towards the right. A bar coloured red signifies that the stock value has gone down.

3. Candlestick Chart:

Similar to a bar chart, a candlestick chart (a method of Japanese origin) is only different in terms of its visual construction, representing OHLC data  across a candlestick-like illustration. A candlestick has two parts – the body and its shadow.

The body represents the open and close price of the scrip for the day while the upper and lower regions denote the high and the low price of the day.


A candlestick is further categorised into three: A white candlestick which denotes a bullish movement, a black candlestick indicating bearish trend and the ‘Doji’ candlestick that indicates a neutral trend.

Whatever the choice of chart, a representation of such a nature and design is helpful in understanding the emotions in the market by studying the market itself, as opposed to its many components. It also helps an investor plan the entry and exit strategy better. Each price chart comes with its own characteristics, and while data may be same across the board, each illustration presents a different interpretation. It is advisable to try out every method to know which best work for your stock planning; for constantly switching charts will only create confusion.


About Kotak Securities:

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Tuesday, July 17, 2012

Avoid EURUSD | Technical Chart | 17-July-2012

 Below is the technical chart of EURUSD with Ichimoku kinko Hyo indicator.


Altogh EURUSD is closed above Kijun-sen line and has given buy signal, but it's better to avoid trading in this currency pair. The reason is clearly visible in the chart above. It will soon enter Kumo region - which is its high resistance area. Not only this, kumo region is also called no-trade zone.

On the downside, it can go upto 1.2244 - 1.2248. That's its strong support.

Saturday, July 14, 2012

Yahoo server hacked. Is your name on list? Check here

This is one of the most useful article to check your email account security. MUST read it and check if your email id password is visible on internet by everyone. Many Gmail, Hotmail accounts have also been compromised.

Thursday, July 12, 2012

Gold Daily Technical Chart | 12-July-2012

 Below is the technical chart of Gold, using Doda-Donchain and Doda-Bollinger Bands on Daily time frame.










From the last many trading sessions, Gold is trying to go down, but it always gets support at Doda-Bollinger Bands line. Moving in a range-bound price.

On the downside, 1564.84 is the major support of Gold. If it breaks it on daily closing basis, it will give good correction. Take short calls then.

On the upside, take your long positions ONLY if it closes above 1599.22. 

At this stage, wait and watch is the best policy as it is trading in a range-bound between these two levels.