American Investment Training

Monday, January 2, 2017

Understand Bond Yields for the Series 7 - Nominal, Current and Yield to Maturity

Most bonds are fixed income securities. They pay a stated rate of interest to par. That fixed rate is the nominal yield. The nominal yield does not change during the life of the bond. It is also known as the coupon rate. 

Bond Pricing vs. Yield

If a bond is purchased at a discount, par or at a premium, the nominal rate stays the same and the actual interest payments received are not changed as well. 

Nominal Yield Example

If a person buys a corporate bond at a price of $98.50 and the nominal rate is 3%, the investor is actually paying 985.00 per $1000 bond. They will be paid 3% on the par value $1000 per year, but since only 985.00 was invested and they are getting $1000 back at maturity (all bonds mature at par), their YTM will be higher than 3%. If a bond is held to the end, the yield to maturity is it's true rate of return - not the nominal yield.

Current interest rates will dictate where the nominal rate is set. There are also other factors that will determine it. These include:
  • Maturity length and where the yield curve is
  • Bond Rating - an issuer with a lower credit rating will have to offer a higher nominal yield or issue the bond as an OID - Original issue discount
  • Interest Payment Frequency
  • Type of bond - Municipal, Corporate or other
  • Callable or non callable

Current Yield

A bond's current yield is not as important to an investor. It is not the actual interest rate received and it is not the overall yield to maturity. 

A bond's current yield can be found by dividing the coupon or nominal by the current market price of the security. It is not an overly important yield to investors - as it is always changing and is most important if someone is pricing the bond to sell. If an investor is holding the security to maturity - then the current yield is not a big concern.

A debt that is priced above par (premium) will have a lower current yield vs. the nominal. A 7% corporate debenture priced at $102 will have a current of 6.86% ($70 divided by $1020). Discounted bonds will have a higher current yield than it's coupon rate.

Yield To Maturity

To most investors, the yield to maturity is the most accurate and best measure of a bondholder's overall rate of return. 

YTM uses all the components of a bond investment to come up with a true overall yield on the security. The formula and calculation is based on the bond reaching maturity. As with most bonds, default is rare, so the real risk lies with the following:
  • Is the bond callable?
  • What price is it callable at?
  • When are the call dates?
  • Interest rates rise and bond is sold (result in loss in most cases)
  • How long is the maturity? - A bond with a Yield of 4% for 2 years is usually better than a length of 10 years in a normal or upsloping yield curve.


Monday, December 26, 2016

Series 63 Online Pass Guarantee Training Course - Series 63 Licensing

Pass the Series 63 exam with a fully guaranteed pass or no pay policy.

Series 63 - The online training includes 5 sections covering the exam, chapter quizzes and 7 full, accurate and updated Series 63 Tests.

Student progress is tracked and exam test scores are logged, so you can always see where you are at. We are also available to advise you on whether you are ready to sit for the 63. You can view a sample of the delivery and course topics by visiting the on line link below.

Other licenses available. If you have American Investment Training books and cd study prep - the online course section using the links ahead can be a great supplement to your study. If you are using other books (perhaps inferior or out of date), then the virtual courses can be exactly what you need to pass your exam!

Online topics include:
  • Introduction to the Series 63
  • Uniformed Securities Law
  • Securities Definitions
  • Registrations of Brokers and Securities
  • SEC Law
  • More


Series 63 - Series 7 - Series 65 and more.......

Wednesday, November 30, 2016

Series 7 Independent Broker - Become a Series 7 Broker - Sponsorship

Become an Independent Stockbroker or Financial Adviser

Learn how to get sponsored for the Series 7 exam. How to become an independent broker. Complete breakdown of all licenses. Product education and much much more.

Get the "How To become a successful broker and adviser" Ebook. Originally written in 1999. Thousands sold. UPDATED for 2016. Know what you need to know! - download it now. Use it ongoing.....

If you are starting a broker or advisor career, this book will help you. This industry is too large to rely on myths or what one particular brokerage firm is telling you. We work with hundreds of them - training their brokers and employees for the Series 7, Series 6 and other exams. Most firms are not all the same. Your career goals and specialties may not be the same.
Features include:
  • Introduction to a career as a stockbroker and financial advisor
  • How companies hire
  • Firms to avoid
  • Discussion of all licenses and ones you should consider
  • Working as an Independent Broker
  • How Large firms and small work
  • Insurance and Investment Product Carriers
  • and More career information....
  • Series 7 Sponsorship
  • Series 6 Sponsor

Series 7 - Series 65 - Series 66 - Series 63

Or to get licensed NOW:

Monday, October 17, 2016

New York Insurance Live and Health Insurance Course - Life, Health Exam Online Licensing

We are fully accredited provider of insurance pre-license education course ware for New York. Because our training is entirely online and the lessons can be taken when you have time, our courses are perfect for today's hectic schedules.

We offer comprehensive training to help you ramp up your insurance career in New York. Be sure to check with your state to make sure you are meeting the requirements in New York prior to enrolling.

The Online Prep Course will allow you to learn and remember the critical insurance vocabulary, concepts and products that will be tested on your State Licensing Exam. You'll find no fluff, no nice-to-know, no war stories just the essential information that you will need to obtain your license. This crucial knowledge is presented in easy to read, user-friendly language that is devoid of legal complexities and legislative mumbo-jumbo. We've even taken care to clearly define the insurance terms before we use them.
Your state insurance regulators built an Exam Content Outline which dictates the information which we must include in the Online Course and Resource Guide. Parts I through III of the Course and Resource Guide make up the 'national core' portion (useful in any state). Part IV is the State Law section of your course.
The New York Life and Health Resource Guide mirrors the content, sequence and style of the Online Course. It fleshes out the subject matter, serves as a useful reference and provides a format that can be easily highlighted to organize and reduce the tedium of note taking. Our team of editors includes classroom instructors, insurance company trainers and testing engineers who have actually built insurance exams for use across the country. The Sagamore editorial team has as its motto, 'Dull is a 4 letter word.
If you should fall short on your first attempt to pass the State Exam, you are encouraged to send your results to your instructor. He will analyze your scores and develop a personalized review plan to organize your study and deliver it to you by email. You can then focus your efforts on the material that is most likely to produce a passing score on your next attempt.

Tuesday, October 11, 2016

Become an Independent Broker with Series 7 Sponsorship

Learn how to Become an Independent Stockbroker or Financial Adviser. 

  • Series 7 Sponsorship
  • Set up your own firm
  • Have a Series or Series 6 before joining a firm
  • Learn all the exams and licenses
  • Industry Salaries
  • Sales Techniques

This Investment Broker Ebook has sold thousands! and has been updated several times. Packed with valuable information on licensing, sponsorship, independent broker programs, Series 7 Outline, and outlines for the Series 63 and 65, full breakdown of all licenses, testing procedures, test center sites, sales and much more! Over 50 Pages.

All the inside information you need from American Investment Training! - The leader in financial licensing for Broker Professionals. This Broker Guide also includes the full exam outline for the Series 7. Get the edge! Emailed same day!


Thursday, September 29, 2016

Maryland Insurance Pre License Course - Life and Health Licensing MD

Many Series 7 broker will add life and health licensing so they can offer many lines of insurance products for greater commission.

American Investment Training provides insurance licensing for all states. 

We are fully accredited provider of insurance pre-license education course ware for Maryland. Because our training is entirely online and the lessons can be taken when you have time, our courses are perfect for today's hectic schedules.

We offer comprehensive training to help you ramp up your insurance career in Maryland. Be sure to check with your state to make sure you are meeting the requirements in Maryland prior to enrolling.

  1. dentifying the critical information that will appear on the State Exam
  2. Mastering that information
  3. Demonstrating your proficiency by passing a standardized test
Exam4Caster offers 4 practice exams with over 450 questions. Every question includes valuable feedback to clarify your understanding and help you pass your state exam.

Maryland Life and Health Course

Tuesday, August 30, 2016

Stock and Option Hedging - Long Stock Writing Options - Series 7 Tutorial

Buying Stock and Writing (selling) call options as a hedge is a long practiced options strategy for decades. It is also a position that is tested on the Series 7 exam and what Brokers-Traders need to know.

A stock hedge with writing call options is an income strategy - also called covered call writing.

Selling or shorting call options on their own is a dangerous undertaking in the stock trading markets. Shorting option contracts that are NOT covered requires that person to deliver (sell) shares of stock to the call holder at a specific price. If the writer does not own the stock, there is an unlimited loss potential - since the stock can rise to an infinite amount.

Owning the stock "covers" the option. If the option is exercised, the stock is used to fulfill the obligation on the contract.

Strategy Example

Long 100 Shares @$80
Short 1 Feb 85 Call for $300

The Maximum gain, loss and break-even are all tied to the stock performance and the premium received on the option.

The break even is 77. The stock is owned at 80, but the investor received a $300 premium which lowers the overall cost to $7700

The Maximum loss is that total outlay of money. $7700. The $8000 of stock could decline to zero, but the $300 would be retained.

The Maximum gain is the difference between the purchase price and the strike (sell) price on the contract.  That difference is $300 + $300 for the premium received for a total maximum gain of $600.


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