October 12, 2008

Option trading system - The fact that the principal is repaid in installments along with interest means that if hard times came to the country or to a particular section of the American economy a finance company could stop lending and simply collect its outstanding loans.

Every finance company is proud to point to its "liquidation figure." It states, for instance, that its average loan is for 35 months or 28 months, or whatever it is, meaning that if it made no more new loans it would be able to turn its average investment into cash through repayment by its borrowers in 35 or 28 months. The previously mentioned company offering the thrift notes has a liquidation period of about 35 months. In that period of time the company could collect in cash probably 90% of its assets. Its fixed assets in total amount to only $30,000 out of $5,738,000, and these assets consist of furniture and fixtures and automobiles used in the business. Now in contrast, a manufacturing plant has a very major portion of its assets in buildings, machinery and other equipment.

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