Block trades explained

Block trades explainedBlock trades explainedHowever, when a large institutional investor seeks to buy or sell a large chunk of stock, or a block of stock, the sheer size of the order involves additional facilitation. A buy order for 200,000 shares of IBM stock, for instance, would not easily be accomplished without a block trader. At any given moment, only so much stock is available for sale, and to buy a large quantity would drive the price up in the market (to entice mora sellers into the market to sell).For a NYSE stock, the process of block trading is similar to that of any small buy or sell order. The difference is that a small trade arrives electronically to the specialist on the floor of the exchange, while a block trade runs through a floor broker, who then hand-delivers the order to the specialist. The style of a block trade also differs, depending on the clients wishes. Some block trades are done at the market and some block trades involve working the order.At the market. S ay Fidelity wishes to buy 200,000 shares of IBM, and they first contact the block trader at an investment bank. If Fidelity believed that IBM stock was moving up, they would indicate that the purchase of the shares should occur at the market. In this case, the trader would call the floor broker (in reality, he contacts the floor brokers clerk), to tell him or her to buy the next available 200,000 shares of IBM. The clerk delivers the ticket to the floor broker, who then takes it to the specialist dealing in IBM stock. Again, the specialist acts as an auctioneer, matching sellers to the IBM buyer. Once the floor broker accumulates the entire amount of stock, likely from many sellers, his or her clerk is sent back to the phones to call back the trader. The final trading price is a weighted average of all of the purchase prices from the individual sellers.Working the order. Alternately, if Fidelity believes that IBM was going to bounce around in price, they might ask the trader to work the order in order to hopefully get a better price than what is currently in the market. The trader then would call the floor broker and indicate that he or she should work at finding as low a price as possible. In this case, the floor broker might linger at the IBM trading post, watching for sell orders to come in, hoping to accumulate the shares at as low a price as possible.

How to Calculate Your Take-Home Pay

How to Calculate Your Take-Home PayHow to Calculate Your Take-Home PayWho is FICA and why am I paying him so much? is a question many of us have asked while examining a pay stub. FICA is an acronym that stands for Federal Insurance Contributions Act, the law that created Social Security. Your share of FICA includes employee contributions for Social Security and Medicare. Employers also pay a share of the FICA tax for each employee. FICA is just one of many potential paycheck reducers that represent the difference between your salary, or gross pay, and the actual amount you take home, your net pay. Calculating Your Take-Home Pay If you want to know what your paycheck will look like before you take a job, there is a way to figure out exactly how much youll have left over after FICA, federal taxes, state taxes, and any other applicable deductions are removed. There are a few things you should have on hand to calculate your take-home pay The amount of your gross pay. If you earn a fi xed salary, this is easy to figure out. Just divide the annual amount by the number of periods each year. If you are paid hourly, multiply that rate by 40 hours to determine your weekly pay.Your number of personal exemptions. When you start a new job, you fill out a W-4 fasson to tell your employer how much to withhold from your check. The number may be zero or one if you are single, or greater if you have dependents.Your tax filing status. There are standard federal and state tax deductions that vary depending on whether you are single, married filing jointly, married filing separately, head of household, or a surviving spouse. Other payroll deductions. This category could include contributions to a 401(k) retirement plan, health insurance, life insurance, or a flexible spending account for medical expenses. It also may include union dues or any other garnishments that are taken from your wages. It helps to categorize these according to pre-tax and after-tax contributions, to deduc t them from either your gross salary or after-tax calculation. Calculating Taxable Income First, calculate your FICA taxes for the year, otherwise known as your contribution to Social Security and Medicare. Everyone pays a flat, 7.65 percent rate on the first $128,400 (as of 2018) of earned income. You can reduce the amount of your annual gross pay by this percentage before making other calculations. Next, adjust your annual gross income by subtracting personal exemptions and standard deductions that the IRS gives you before it calculates your income tax. The personal exemption rate changes each year, so be sure to find current exemption rates when making your calculation. For every exemption claimed on your W-4 form, you will subtract the current rate from your gross income. Your standard deduction is subtracted next. Standard deductions also change from year to year and are based on your filing status. You can find current standard deduction rates on the IRS website. Once youv e subtracted personal exemptions and a standard deduction, the resulting number should be very close to your taxable income. This is the total that will be used to determine your federal and state tax brackets. Calculating Income Taxes There are several taxes that may be applied to your gross pay, including federal, state, and even local income taxes. The amount of federal tax you pay will depend on your filing status and bracket, which you can find in the Federal Tax Bracket tables updated annually by the Tax Foundation. If you live in a state with a personal income tax, you will need to find your state tax bracket to determine how much will be deducted from your take-home pay. Each state has its own set of brackets which should be available on the state government website where you live. The Tax Foundation also lists recent state individual income tax rates and brackets on its website. It also includes information on local taxes, where they apply. New York City, for example, h as its own tax on income. Add together your federal, state, and other income taxes, and this is the amount that will be deducted from your paychecks over the course of the year. Other After-Tax Payroll Deductions Remember also to subtract any other relevant deductions. Depending on whether they are pre-tax or after-tax deductions, you can deduct them from your salary before or after calculating income tax due. For example, if you contribute 6 percent of pretax salary to a 401(k) retirement plan, take that amount from your gross salary before calculating your taxes. Health insurance premiums paid by you are also typically taken from gross pay before taxes are taken out. For union dues and other garnishments, you can verify whether they are taken out before or after tax, or use estimates for those figures. Final Calculations To determine the total amount of money deducted from your paychecks, add up the amounts youve calculated for FICA taxes, income taxes, and other deduction s, then subtract that total amount from your annual gross pay. Whats left is your net pay. Divide both your total deductions and your net pay by the number of pay periods for the year to determine how much those amounts will be per paycheck. Free Online Paycheck Calculators Online resources can help you simplify the process. Once you have a sense of who exactly gets a piece of your paycheck and how much, you can easily determine your take-home pay using an online paycheck calculator.

Why Networking Can Feel Fakeand How to Fix It

Why Networking Can Feel Fakeand How to Fix ItWhy Networking Can Feel Fake- and How to Fix ItIf you dislike networking, its probably because it feels, well, fake. But rather than looking at it as a cold, calculated, you-scratch-my-back-Ill-scratch-yours deal, think of it as an ongoing, organic process of building relationships with people you like. Those are Marie Forleos words, not ours. In this video, she explains eight rules of networking that, if you follow them, will leave you with meaningful contacts- not a gross taste in your mouth. Photo of shaking hands courtesy of Shutterstock.