Real Strategies

Think Bit Coin Is Just a Bubble? 5 Best Methods to Short It

The CEO of J.P. Morgan this week predicted Bit coin that a "fraud" and "worse compared to tulip bulbs" If you agree, then it could be tempting to gamble from the digital money. Sure, the purchase price has had a beating recently however it's up 400 percent from January (,850 at the time of Thursday) --offering a chance for Bit coin bears.
So just how can you short Bit coin? It isn't easy because of deficiency of lending options (in accordance with other resources) and because a few tactics are on a specialist trader. Nevertheless, here are just five approaches for bears to gamble against the entire world's most common digital money.
Inch) Buy it around perimeter market it
Trading programs such as Coin base-owned GDAX let you buy online margin. While gross profit purchases normally entail adding leverage to proceed long within an advantage, in addition, it is feasible to go short by purchasing bit coins on perimeter, and shutting out the career after on. In the event the purchase price tag on bit coins drops in that moment, you're benefit from the commerce.
You will find a couple of caveats. It's that GDAX requires U.S. occupants to get at least 5 million should they would like to exchange on margin. (San Francisco-based rival Kraken does not appear to possess this limitation). The alternative is that clients can simply exit margin places available for a rather brief amount of time--27 days while in the instance of GDAX--that means individuals gambling on a fall in Bit coin desire it to fall in short sequence, or they'll need to pay the purchase price growth.
Two) Short stocks of this Bit-coin Investment Trust
The SEC this season refused a program by the Winklevoss twins to establish a Bit coin ETF. The stocks of the ETF will have exchanged to a significant market, also let average traders utilize their broker account to short them at precisely the exact same way as a average inventory exchange.
The SEC is reconsidering your choice however, at the meantime, the only real stock-like alternate could be your Bit Coin Investment Trust. As its name implies this is just a hope which holds Bit coin and enables people exchange its shares under the ticker GBTC.
Once more, you'll find grabs. It's that GBTC isn't permitted trade on major exchanges, therefore as an alternative it's recorded on OTC Markets (aka the "pink sheets") alongside other misfit toys of this auctions globe. Enormous brokerages such as TD Ameritrade do enable traders purchase OTC-listed stocks however, perhaps not short them, helping to make it more challenging to gamble against GBTC. At length, the purchase price tag on Bit Coin Trust stocks have gotten untethered into the amount tag on Bit coin (it's ostensibly broken within an investment vehicle) therefore a brief bet isn't quite a bet on Bit coin itself.
3) Buy derivatives on LedgerX (if they arrive)
Experienced investors might want to wade in the entire world of options and other derivatives like a means to become more bearish on Bit coin. Specifically, they can get a "put option" to market Bit coin during its present flat-rate cost. In the event the purchase price tag on Bit coin starts falling, the possibility increases in value along with also its owner can pocket an advantage.
These derivative contracts aren't available yet; however, they should be so on. Back in July the Commodity Futures Trading Commission approved a bid by a company named Ledger X to start a clearing house to get crypto currency places, calls, swaps and a wide range of additional exotic contracts. Ledger X is predicted to be available for business within the not too distant future.
(Update: There is also Hong Kong-based Bitmex, and it is a long-time purveyor of all bitcoin-related derivatives. 1 catch: all of trades, in addition to losses and profits, are ran in Bit coin--meaning you have to purchase Bit coin until you are able to view it).
4) Ask Goldman Sachs to compose you a contract


SLM Corp. | Floating-Rate Non-Cumulative Preferred Stock, Series B, par value $0.20 per share (SLMBP)

Prospectus excerpt: 4,000,000 shares of Series B Preferred Stock.

Dividends: When, as, and if declared by board of directors, dividends are payable at a floating rate of three-month LIBOR plus 0.70% per annum quarterly in arrears on and until June 15, 2011. After and including the period beginning on June 15, 2011, dividends on the shares will be payable at a floating rate of three-month LIBOR plus 1.70% per annum quarterly in arrears. Dividends on the shares are not cumulative and, accordingly, if for any reason board of directors does not declare a dividend on the shares for a quarterly dividend period, holders of the shares will have no right to receive a dividend for that period, and company will have no obligation to pay a dividend for that period, whether or not they pay dividends in full or have sufficient funds to pay dividends in the future.

Dividend Payment Date: Dividends are payable on March 15, June 15, September 15 and December 15 of each year, beginning September 15, 2005 unless such day is not a business day, in which case, the related dividend will be paid on the next succeeding business day.

Record Dates: The record dates for the payment of dividends will not be earlier than 45 days or later than 10 days before the applicable Dividend Payment Date.

Maturity:The Series B Preferred Stock does not have any maturity date nor is company required to redeem the Series B Preferred Stock.

Redemption: The Series B Preferred Stock is redeemable in whole or in part at company's discretion on any Dividend Payment Date on or after the Dividend Payment Date on June 15, 2010 at a price equal to the liquidation preference plus any accrued and unpaid dividends for the then-current quarterly dividend period, if any. It is company's intention to redeem the Series B Preferred Stock with proceeds raised from new capital offerings during the life of the Series B Preferred Stock with equal or greater equity benefit.

Liquidation Preference: If company liquidates, dissolve or wind up, then the holders of Series B Preferred Stock outstanding at the time will be entitled to receive $100 per share, plus an amount equal to accrued and unpaid dividends for the then-current quarterly dividend period, if any, pro rata with holders of our Series A Preferred Stock and holders of any other outstanding pari passu stock before any distribution of assets is made to holders of common stock.

Voting and Board Observer Rights: None, except with respect to certain changes in the terms of the Series B Preferred Stock. Also, if company does not declare or pay dividends on the Series B Preferred Stock for four or more quarterly dividend periods (whether or not consecutive), the holders of the outstanding Series B Preferred Stock, voting together as a single class with the holders of any other class or series of capital stock with similar voting rights, will be entitled to vote for the election of two board observers to attend and participate in meetings of board of directors until they have fully paid all declared and unpaid dividends and resumed the payment of dividends in full on the Series B Preferred Stock for four consecutive dividend periods.

Preferred Stock Board Committee: Board of directors maintains a committee appointed to monitor payment of dividends on outstanding preferred stock, including both our Series A Preferred Stock and Series B Preferred Stock. The committee includes at least three persons, each of whom is an independent director.

Ranking: The Series B Preferred Stock will rank, both as to the payment of dividends when due and upon liquidation, dissolution or winding up, junior to all senior and subordinated indebtedness, pari passu with outstanding Series A Preferred Stock, and senior to common stock (and any other stock junior to the Series B Preferred Stock).

Conversion: The Series B Preferred Stock is not convertible into or exchangeable for any of other securities or property.

Full Prospectus PDF », SLM Page »

Series:B
Redeemable?:Yes
Call Date:6/15/2010 (Now Trading Post Call Date)
Perpetual?:Yes
Cumulative?:No
Shares Offered:4000000
Liquidation Preference:$100
Recent Market Price:$68.50
Discount to Liquidation Preference:
(More Preferreds Trading at a Discount »)
$-31.50 (-31.50%)
Annualized Dividend:3.054678
Recent Ex-Date:12/4/2017
Current Yield:4.46%
Original Coupon:Three-month LIBOR plus 0.70% until 6/15/2011. Three-month LIBOR plus 1.70% after 6/15/2011.
Pay Period:Quarterly
Pay Dates:15-Mar, 15-Jun, 15-Sep, 15-Dec
SLM is a holding company. Co.'s primary business is to originates and services Private Education Loans it makes to students and their families. Co. also provides a range of deposit products and operates a consumer savings network that provides financial rewards on everyday purchases to help families save for college. Co.'s Private Education Loans include protections for the family, including loan forgiveness in case of death or permanent disability of the student borrower. In addition, Co. voluntarily requires school certification of both the need for, and the amount of, every Private Education Loan it originates, and it disburses the loans directly to the higher education institution.

Preferreds: SLMBP, SLMAP


Open the SLM Information Page »
Name: SLM Corp.
Website: salliemae.com
Sector:
Number of ETFs Holding SLM: 46 ()
Total Market Value Held by ETFs: $413,098,071
Total Market Capitalization: $4,924,000,000
% of Market Cap. Held by ETFs: 8.39%

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