Monday, February 13, 2017

how to monitor financial institution

  • if the CDs spread (the cost of insuring against the firm's default) of an institution's debt is widening, this may be a warning for u not to have too much money in this institution
  • periodically check the "trading spreads" of the debt of ur primary institutions u deal with
  • trading spread --- the gap between the buying price and the selling price of a financial institution's stocks, bonds, and derivatives ---if few people want to buy and many people want to sell, then, the gap widens, which is often a bad signal about the health of the institution 
  • Do not have all ur money in one broker, or one bank

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