My Orgo Sign-in

1. My Orgo Sign-in • Go to myorgo.com • Hit Register and fill out your information. • Follow this link • http://www.myorgo.com/e3536548-dc1f-4e6d-ba6a-faff2be54406/join • Re-sign in. • If you don’t have a phone with internet capabilities, see Sam or Jake at the front.

2. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.  Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

3. Tonight’s Agenda • Introduction • Trading Competition • Options 101 • Current Market Events

4. Newcomer’s Information • We meet every Sunday at 7:15PM – 8:15PM at W151 in PBB • Membership Dues: $25/semester • Food/Drinks every meeting • Investment information and education • Great trading tips and strategies • Investment Competition: $15/semester • Best way to gain experience and learn • Past prizes include iPads, Apple TVs, gift cards • Fun Discussion atmosphere, member involvement

5. Market Researchers • Roughly 8 members who have an interest in expanding their knowledge of capital markets • Responsible for following one economic sectorand presenting to the club • Great resume experience • Will write for the HawkTrade blog on the Motley Fool (www.fool.com)

6. Current market researchers • Ye Guo – Chinese stocks • Katherine Doll – Healthcare • Greg Frommelt – Industrials • Edward Bellany – Energy

7. Investment competition • Platform: Wall Street Survivor • League: HawkTrade Competition • Link: http://www.wallstreetsurvivor.com/league/HawkTradeCompetition • $15 fee to join • Ability to win great prizes!!!

8. Investment competition • League Settings: • Start Date: 9/15/2014 • End Date: 12/ 05/2014 • Portfolio Size: $100,000 • Maximum Trade Position: 25% • Able to trade derivatives and options • If you have any questions, comments, or concerns, contact me: daniel-muggee@uiowa.edu

9. What is an Option? • A contract that gives an investor the right to buy or sell and underlying asset. • Bought at a specific price. • Contract expires on a given date. • Know as a derivative, deriving its value from an underlying asset. • One contract represents 100 shares of underlying stock.

10. Option Components • Strike Price- The price the trader thinks the stock will go to, either above, below, or at the current market price. • Expiration date- How long the option contract is good for; anywhere between a week to over a year.

11. American vs. European Options • An American option can be exercised at any time during its life. • A European option can be exercised only at maturity.

12. Call Option • Call Option: A call gives the holder the right to buy an asset at a certain price within a specific period of time. Calls are similar to having a long position on a stock. Buyers of calls hope that the stock will increase substantially before the option expires.

13. Call Option

14. Put Option • Put Option: A put gives the holder the right to sell an asset at a certain price within a specific period of time. Puts are very similar to having a short position on a stock. Buyers of puts hope that the price of the stock will fall before the option expires.

15. Put Option

16. Participants in the Options Market • Buyers of calls (Bullish) • Sellers of calls (Bearish) • Buyer of puts (Bearish) • Seller of puts (Bullish)

17. Buyer/Seller Difference • Call holders and put holders (buyers) are not obligated to buy or sell. They have the choice to exercise their rights if they choose. • Call writers and put writers (sellers), however, are obligated to buy or sell. This means that a seller may be required to make good on a promise to buy or sell.

18. Speculation • Speculating which way the stock will move, at what magnitude, and during what time period. • Way to lever up potential gains, without risking as much money on the downside.

19. Hedging • Used to insure investments against downturn. • Allows investor to lock-in profits, regardless of which way the stock moves.

20. Option Pricing • Simply put, Options are priced based on the intrinsic value of the underlying stock and time value of money. • Remember, intrinsic value is the amount in-the-money, which, for a call option, means that the price of the stock equals the strike price. • Time value represents the possibility of the option increasing in value.

21. Option Pricing • Black-Scholes Model- Used to calculate the theoretical prices of an option.

22. Hedging • Used to insure investments against downturn. • Allows investor to lock-in profits, regardless of which way the stock moves.

23. Current Events • GE Appliance Divesture • Pfizer Tax Breaks • Dollar Store War • Fed Policy

24. Major Indices

25. GE divests appliance business • GE will sell its appliance business to Electrolux for $3.3 billion • GE is taking another step to slim down its portfolio to core businesses • P/E: 21.27 • Div & yield: .88 (3.50$) • 52 wk range: $23.50 - $28.09

26. Pfizer searches for tax breaks • Patent cliff has driven pharmaceutical companies to search for new revenues and cut expenses • Pfizer has put bids in to acquire overseas firms in order to access $30 million in assets • Possible M&A partners are well known names such as GlaxoSmithKline, Actavisand AstraZeneca

27. The “Dollar Store War” heats up • Dollar General (DG) is attempting a hostile take over of Family Dollar for $9.1 billion • DG is attempting to outbid rival Dollar Tree offer of $74.50 per share • Family Dollar shares rose 0.2 percent to $78.86 at the close in New York. • Dollar General gained 0.4 percent to $63.70, while Dollar Tree fell 0.2 percent to $55.82.

28. FED Policy • FOMC meeting Wednesday (9/17). • Primary focus of meeting: to determine FED Funds Rate. • Current FED Funds rate: .25% • Consensus: .25%

29. FED Funds Rate

30. What is the FED Funds Rate? • The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight. • Sets the basis for all other interests. • Typically influential of the short-end of the yield curve.

31. Other FED Expectations • Expected to cut bond repurchase program by another $10 billion a month. • Expecting complete quantitative easing by end of October, reducing the monthly rate by the final $15. • Expected to give update on GDP, inflation, and other forecasts.

32. Get in Contact with us http://iowahawktrade.com/ Twitter - @HawktradeUI

33. Last Week’s Stock Pick’em • 1st : Dylan Decker – PANW - Palo Alto Networks – 11.61% • 2nd : Clint Vilks – YHOO - Yahoo – 4.86% • 3rd : Todd Burke – MNK - Mallinckrodt – 1.76%

34. This Week Competition • Pick a Stock. • Tweet the ticker symbol to @HawktradeUI or email it to hawktrade@uiowa.edu. • Top 3 gaining stocks on the week win a Jimmy John’s giftcard.