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A Covered Call is an options trading strategy where an investor who owns the underlying asset (such as stocks) sells a call option against it. By doing so, the investor collects a premium from the sale of the call option, which provides income. The strategy aims to profit from the income generated by the premium and potentially from limited gains if the underlying asset's price remains below the call option's strike price. However, the investor's potential upside is capped, as the call option obligates them to sell the asset at the strike price if the stock's price rises above it.
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The strategy used by the target company to prevent the advance of the hostile takeover is a dead-hand provision. Once the unwanted acquirer has acquired a certain number of shares, new shares are automatically issued to all other existing shareholders, leading to a massive dilution of the prospective owner's shareholdings or percentage of the company. To learn what is a dead hand provision, read this guide below.
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- 06 Dec 2023
A dual-class stock refers to two different classes of shares with differential voting rights. The founders have the most voting power. However, they own a tiny percentage of the company's total capital. Companies offer two separate kinds of shares. Each type has different rights associated with it. For instance, preferred stocks give investors the right to fixed dividends. However, they lack voting rights. Let’s look at the dual-class shared definition and go into all the relevant details.
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- 06 Dec 2023
The control stock is an ordinary share held by the largest shareholders of a public company. The shareholders will have the right to hold either a majority of outstanding shares or if they are sufficiently large, parts of their holdings that will give them control over decisions taken by the company. To understand the control stock definition and all the other significant details, check this guide below.
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- 06 Dec 2023
Voting shares are a unique type of shares that give shareholders the right to vote on decisions and policies related to the company. This includes voting for the appointment of the board of directors and other things pertaining to the firm's governance. There are several methods to categorise shares based on the advantages, rights, and benefits they offer. The voting right granted to the investor is one way of doing it. Let’s discover what voting shares are in this article.
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- 05 Dec 2023
"Nil-paid" refers to a rights issue when a company grants its shareholders the opportunity to purchase new shares at no cost. The rights are considered "nil-paid" as the shareholder does not make the required payment instantly. It is a unique rights issue that also allows shareholders to get additional shares at discounted prices. So, let’s define nil-paid and go into all the details in this blog.
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- 05 Dec 2023
The pink sheet stocks are securities that are traded over-the-counter, also called OTC Markets. In over-the-counter markets, transactions take place directly between dealers. Thus, OTC markets refer to off-exchange markets. OTCM- OTC Markets Group is an exchange with OTC listings, where pink sheets are frequently traded.
Today, the term "Pink Sheet'' is rarely used. During the early days of OTC trading, stock details were written on stock sheets that were in pink color. As a result, the term "pink sheet stocks'' was coined. Pink sheet stocks listed in over-the-marketplaces are not subject to financial reporting standards and are not required to file financial reports. In this article, let’s get a detailed overview of Pink sheet stocks.
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- 04 Dec 2023
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