T-Strips as Risk-Free Investments

By Dan Chandler

T-Strip are a great investment tool if you know what they are. The term STRIP is an acronym which stands for "Separate Trading of Registered Interest and Principal Securities." T Strips are U.S. Treasury securities that are issues by the Treasury for zero-coupon securities which have a maturity period over one year. The STRIPS program gives investors much more flexiblity in how they trade for the securities.



Background Information Behind Treasury Strips

The advent of the STRIPS program came with the advent of the computer age. In 1985, the zero coupon market exploded in this innovative new way of investment trading using U.S. Treasury securities. The syatem was based on the new abilities of modern technology to maintain a database accessible through the Fed Wire, that made it possible to convert into a series of zeros. Not long after this, the U.S. Treasury made it official by giving each T-Strip the official identification callled the CUSIP number.

Under the STRIP program, a financial institution can present the US Treasury with a standard Treasury note, Treasury Bond or TIPS (Treasury Inflation- protected Security) to be "stripped." The Treasury then breaks or disintegrates the individual flows of cash into separate securities, after which it is returned to the financial institution.

For instance, a 10-year note which is newly will be stripped into twenty interest payments, 2 annually or semi-annually for ten and one principal payment which will be due at its maturity date. All the twenty interest payments plus the single principal payment are converted to STRIPS, each of them will then become a separate security. The new separate securities are then identified as coupon strips for the interest payments and principal strips for the principal payment. Together they are referred to as Treasury STRIPS.

These Treasury STRIPS are separate zero-coupon securities. There is no practical difference. In fact, to an investor, there is no distinction between a coupon strip and principal strip, although in reality the Treasury STRIPS are not identical. In this example, all twenty one coupons have a unique identifying number called the CUSIP number.

When a T Strip is stripped through the commercial book-entry system each interest payment and the principal payment becomes a separate zero-coupon security. At this time, each component of the T-strip is given its own identifying number called the CUSIP number and can be held or traded separately.

T Strips Provide Risk Free Investing

It is important to know that STRIPS are not issued or sold directly to investors. In order to but U.S Treasury STRIPS, you need to use officially licensed financial institutions and U.S. government securities brokers and dealers. There are options in how the maturity of the STRIPS occur over the period of the investment. It can be from ten to thirty years. STRIPS are highly popular with investors who want to be sure they receive a known payment amount on a specific future date, because it is a very safe investment.

Treasury STRIPS allows liquidity in the investing world because it gives investors several maturity options. Similar to other zero-coupon instruments STRIPS can be used to acheive a wide range of objectives because they are definitely going to have cash-flow values at a known future date. They are attractive to investors with specific opinions regarding interest rates, because prices of STRIPS are particularly susceptible to changes in interest rates.

STRIPS are more popular when short-term interest rates are down. At these times short term bank rates and reinvesting bond proceeds are not appealing. T- Strips, being zero-coupon securities, do not have reinvestment risk. - 23159

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What is a Barrel of Oil?

By Terry Stanfield

If you are interested in oil and gas investing it is important to understand what a barrel of oil is and how it can affect your investments.

Oil and petroleum is measured by the barrel in the United States. This measure refers to crude oil and other petroleum products. In gas investments, oil will be referred to as barrels of oil when the talk about the price of oil going up. A barrel of crude oil is 42 gallons. For global reporting purposes the term barrel is used interchangeably. In Europe, they might even convert the production of oil to tons.

In the late 1800s an oil barrel was a wooden barrel. Today the barrels are steel drums. These barrels are used to transport oil on big tankers. However, it is very important to understand that the barrels aren't used so much anymore for transporting crude oil. Most petroleum is transported by means of oil tankers and pipelines today. A barrel of oil is the universal term for the measurement for oil investments.

The measurement of a barrel of oil came from some oil fields in Pennsylvania in the early 1860s. At this time there was not a standard container for oil and the containers consisted of anything they could put it in. However, because of oil and gas investing and the prices of oil, distrust between buyers began to rise. This created a standard oil barrel to be used.

Oil investments might also use the term "barrels per day". This term is a measurement for actual refinery throughput rather than the actual capacity. The "barrels per day" is actually computed in one way. The number of refined barrels of oil processed by the plant will be divided by the number of days that the refinery has been in operation. "Barrels per day" is also used in terms of consumption. This might be referred to as millions of barrels per day or thousands.

Gas investments also should note that barrels of oil do not make that much gasoline to be used for consumption of motor vehicles. Petroleum is used to make almost everything people use like tires for their car, plastics, ink for printers, clothing, and more. One 42 gallon crude barrel of oil only makes less than half of that in gasoline for a car, which is approximately 19.5 gallons of gas.

Oil and gas investing requires a little knowledge about barrels of oil. It is important to know that crude oil must be taken to a refinery and refined into gasoline. It cannot just be poured into a vehicle. A barrel of oil is only a term for measurement today for investment purposes. This method of transporting oil is not the standard. Although it is still used, only a small percentage of transporting oil happens this way today. - 23159

About the Author:

Visit Evans Energy's site for information on investng in oil and gas and oil and gas investment benefits.

Australian Silver Kangaroo - A Corker Of A Coin

By Christina Goldman

Because of its potential intrinsic value, the Australian Silver Kangaroo would be an enriching addition to any coin collection. The Silver Kangaroo is an epitome of the high quality of RAM, (The Royal Mint of Australia), minted coins, world-renowned for their exquisite craftsmanship and design.

Investing in this coin could serve as a hedge against inflation owing to the popularity it has acquired, which was bolstered to a great extent 1-oz. silver makeup. This single-ounce concept has proven convenient and effective for trade and purchase purposes, the liquidity aspect characteristically sought by most astute investors.

So just how did the Australian Silver Kangaroo come into existence?

In 1993 The Royal Mint of Australia, RAM, immortalized the kangaroo as a countrywide icon when it started to mint a coin in its respect : the Australian Silver Kangaroo. Because of its potential natural worth, this RAM mintage would be an enriching addition to any coin collection.

The Kangaroo, (scientifically classified under the genus Macro), is highly regarded as the official animal icon for Australia as, along with the bird emu, it appears in the countrys coat of arms. The kangaroo and the emu, so many Aussies say, are representative of Australia because these animals can only move forward thus epitomizing the nations drive to ever step ahead.

Early coin editions are highly sought, particularly those of the 1998 vintage. Limited minting by the RAM is what makes the Australian Silver Kangaroo a very attractive investment proposition. In 2007, for instance, RAM minted just 15,000 of this coin bullion.

The design of the coin, which varies each year, has also been elegantly rendered for that year. It proudly displays the highly recognizable kangaroo engraving back-dropped against the constellation of the Southern Cross.

Rounding out these distinctive features is the coins diameter of 40.6 mm and thickness of 4 mm. Face value of this coin is at 1 Australian dollar, just a mere fraction of the intrinsic value that this silver bullion coin enjoys among collectors and investors all over the world. - 23159

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Find great prices and selection every day on the gorgeous Australian Silver Kangaroo at: http://AustralasianCoins.com

Forex Options Strategy

By Hass67

Have you heard about George Soros; The legendary manager of Quantum Hedge Fund who had made a cool $1 Billion profit from a single bet. In the early 1990s, one day he was sitting in his office discussing currency markets with his associate. Both of them were of the opinion that the British pound was overpriced and Bank of England could not sustain its price for long.

He decided to purchase $10 Billion of puts and calls options by using all their funds assets as collateral. George Soros was willing to gamble everything on a single bet.

His knowledge of the currency markets was perfect. He was sure that his conviction that the Bank of England cannot sustain the overpriced British pound would come off right. Soon other currency speculators also joined. A huge selling pressure on British pound developed. Bank of England could not sustain the selling pressure too long and in a matter of 24 hours had to take British pound out of the European Monetary System and let it float freely.

The value of British pound plunged. George Soros gamble paid off. He is now famously called the Man who broke the Bank of England.

Daily more than $3 trillion are transacted in the currency markets. You as a forex trader can profit from the volatility in the currency markets using a number of methods. Forex options is one of the methods

Spot, futures and options are three contracts that are traded on centralized exchanges and available to you as a retail forex trader. Swaps and Forwards are two more contracts traded in forex markets for hedging by large institutions like big banks, multinational corporations and off course hedge funds.

Lets discuss trading forex options. Options are derivative products that give you the right to buy or cell or certain underlying asset at a predetermined price known as a strike price before or on a certain date known as the exercise date.

In case of a forex options the underlying asset is the currency. Now, forex options give you the right to purchase/sell a certain amount of a particular currency on payment of a premium.

You may or may not exercise your right to buy/sell the currency. If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option.

In case, the market price is not above/below the strike price of your forex options contract, you can simply let the options contract expire. You only lose the premium that you had paid for purchasing the options.

If you want to try forex options then there is a very good forex options strategy that lets you profit regardless of the direction in which the currency market is moving.

This forex options strategy guarantees 30-50% ROI sure shot profit for you. If you feel satisfied with this much return you need to take a look at this method. - 23159

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in investing, options and forex trading. Read more about Forex Options Non Direction Trading System. Discover a revolutionary new Forex Robot

What is Forex Megadroid?

By Sue Tenet

Are you looking for a Forex robot? One that is built on artificial intelligence technology? The solution may be in the Forex Megadroid. What it does is simply astounding. You can't predict the immediate future within two to four hours using only your human mind. But with Forex Megadroid, you are like a Forex prophet who profits by knowing the forex results in the an uncanny 95.82% accuracy.

Why is this important? There is huge cash to be made in the Forex trading market It is a fact that currencies are always going up or down, all the time fluctuating. As a Forex trader having this tool, knowing the immediate market trends can make a world of difference in your trading. It is reported on average that this robot has turned every dollar invested in 2009 into three dollars. That is an astounding 200% profit!

Because the forex market is so volatile, you need a forex robot that can reliably predict the profitable pip moves before they occur. What is so special about Forex Megadroid is that it can analyze the Forex market in any kind of economic conditions using proprietary computer-based permutations called RCTPA or "Reverse Correlated Time and Price Analysis." Yes I know... that's a mouthful you been to say that acronym, but the mathematics are solid and produce income for those that use this groundbreaking Forex robot.

Another point, please bear in mind that the founders of Forex Megadroid, John Grace and Albert Perry, are not just some nerdy mathmaticians who wear horned-rimmed glasses, out-of-style clothing, and pocket protectors. No, that is not the case here... These guys have 38 years of genuine experience in foreign exchange trading. They know through through this experience what works and what doesn't. It was based upon this experience that the mechanisms of the forex prediction robot called Forex Megadroid was born.

The Forex Plug And Play System

Who doesn't like to have something that is a totally automatic and hands-free money making machine? People all over the world look for fool-proof systems like this to base their investing on. The future is now. If you want to get started using the forex megadroid robot, please visit http://www.forexmegadroidreview.com/ - 23159

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