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7 Tips for Acing a Video Interview

Whether you recently graduated school or are just seeking a new job, work interviews are increasingly conducted online, via video. This can be especially true as more companies take on remote hires and millions are working from home.

With this rapid rise in digital job interviews, you may wonder, What are some ways to ace a video interview? Do I need a fancy lighting set-up? What should I wear?

To help you make a good impression, read on for seven video interview tips, from practicing ahead of time to tweaking your background. They can help you make a great impression.

Get the Details Right

Video interviews could lead to a rewarding job. So it can be a smart first step to confirm the logistics of the video interview in advance to make sure there’s not a last-minute panic. Some questions to wrangle could include:

•   Will you get a calendar invite or event link for the interview?

•   What time zone will the interviewer be calling in from?

•   Which video conferencing platform will be used?

•   Will you need to download software to be able join the interview?
Knowing the answers to logistics can help bring more confidence to the video interview.


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Dress for the Video Interview

Whether you are applying for an on-premises, fully remote, or part-time remote job, certain interview expectations stay the same — namely, presenting yourself with professionalism and dressing for the job. Even when (especially when) you’re interviewing from home.

Even if you’re applying for a fully remote job and you’d likely wear a hoodie and leggings every day, this is a moment to look professional. Business casual is a good bet, and remember the adage to dress for the job you want, not the role you have. Going a notch more formal is typically better than too relaxed.

Do check out how you look on camera in your interview outfit in advance. A shirt that looks fine in real life could wind up looking odd when cropped on camera.

Now, the seven tips to help you ace a video interview as you move forward with job applications.

1. Practice to Make Perfect

Different companies or organizations may use different platforms to host the interview — from Zoom to Google Hangouts to other programs. Don’t worry: You don’t need to become a pro at all the expert features. Still, it’s a good idea to become comfortable with:

•   Dialing into scheduled calls

•   Checking the audio and the camera

•   Understanding what the interviewer can see

•   Ensuring the WiFi signal is strong enough for the video interview and doesn’t lead to lag.

If you’re scheduled for a video job interview via a program you’ve never used, it’s advisable to download and try it out well before the actual call. Opening up an unfamiliar program just before the interview only to realize it’s not compatible with your technology might not create a positive first impression. Also make sure you double-check that you have all logins or passwords for the call.

Recommended: How to Get Out of Student Loan Debt: 6 Options

2. Set the Surroundings

Here’s the next video interview tip: Generally, it’s a good idea to do a test call on the planned video-interview platform. This could help you assess how you and your surroundings appear via video. You may even want an extra set of eyes and ears: Ask a friend or family member to do a “mock” call to ensure the audio and visuals are clear.

When prepping for a video interview, put yourself in the position of whoever will be interviewing you. Some questions to chew on:

•   What can the interviewer see of your space? Are you too far from or close to the camera?

•   Are you easily visible or is more light needed? Or is the setting too bright and full of glare?

•   Are there any distractions in the camera frame? Are you able to make eye contact as you talk, or are you looking sideways into the camera?

Some digital platforms allow users to record sessions. So, interviewees may want to record themselves talking and then watch and listen. You could run through the main things you want to say in the real video interview. Talking aloud on camera can help some people to become more aware of their own body language and improve it, if needed.

These steps can be a good way to finetune your online interviewing skills and hopefully get you on your way to accepting a job offer.

3. Take Brief Notes Beforehand

With job interviews, researching the company beforehand could give you ideas of how to connect previous work experience with the brand’s values or role’s responsibilities. One of the benefits of a video interview is that you can make these research notes quite literal.

Write out key points on a big piece of paper near your computer. Or, jot down a couple of accomplishments (say, an in-demand internship) on a sticky note next to your camera. It’s likely that the employer conducting the video interview will have no idea you’re looking at those pre-prepared notes. Just make sure you keep your notes short, so you can naturally weave in key points while maintaining good eye contact with your interviewer.


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4. Minimize Off-Screen Distractions

Another important online video tip is to keep your on-screen image distraction-free. It’s worth remembering that the only person the interviewer wants to interact with is you…not your adorable pets, lovely roommates, or kid sister. You ask the folks you share a living space with to keep quiet or stay in their rooms during your interview. Plan ahead so the conversation isn’t distractingly interrupted by unexpected visitors. (If your dog does somehow come bounding in and sits on your lap, own the situation, apologize, and remedy it as quickly and calmly as you can.)

And, on this topic, it’s a smart idea to turn off notifications for texts and emails during the interview time slot. Otherwise, a funny group chat could make your phone blow up with the distracting sound of alerts flooding in.

Also, as part of how to prepare for a video interview, check your background. Not everyone has a camera-ready home office. Do you have a messy shelf behind your head? Or your roommate’s horror-movie poster hanging there? Style your space so it doesn’t distract your interviewer from you and all you can offer a company.

Recommended: When Do Student Loans Start Accruing Interest?

5. Show up Early

Just as with an in-person interview, it’s wise to show up early. This can communicate that, yes, you’re punctual, but also that you are organized, dependable, and eager for the job.

Also remember that with video calls, there can be issues. Perhaps your passcode doesn’t work, or your video camera won’t turn on (despite having tested it the day before). If you aim to be online and logged in early, you can troubleshoot as needed. Just keep your posture and demeanor professional while you are in any digital waiting rooms before the call starts.

6. Go Outside for a Breather

It’s hard to feel energetic and friendly if you’re cooped inside all day. A good way to minimize nerves is to get fresh air. Don’t just open up a window. Take a quick walk around the block to get a jolt of sunlight and catch a breeze. They can help reset the mind. It can also be a great idea to do these between video interviews, if you have more than one scheduled on a given day.

7. Remember to Be Yourself

After preparing for the logistics of video job interviews, it can be easy to forget one simple thing: Be yourself. While a strong WiFi signal and well-lit space won’t hurt your chances during a video interview, it’s helpful to recall that interviews are conversations between two or more people. You’re not being grilled on a TV news report. Sure, you want to be prepared, but also relax, and share who you are.

Ways to help communicate across the digital divide: Aim to make good eye contact, have your voice show energy, and try out a signal to show that you are done speaking and ready for the next question. A nod might work well in this case.

Getting to Work

How to prepare for a video interview and ace it is just one part of navigating life after college. Being ready for a video interview is just one new way to get noticed these days.

On top of looking for a full-time or better-paying job, some grads also want to find ways to reduce their outstanding debt balances. That can include long-term bills, like student loan repayments. Some borrowers decide to refinance their student loans with a private lender.

Refinancing student loans could reduce monthly bill payments, though it’s important to note that you may pay more interest over the life of the loan if you refinance with an extended term. In addition, if you refinance federal student loans, you will forfeit certain federal benefits and protections. If you are curious to learn more about refinancing student loans, it can be a good idea to research different offers.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FOREFEIT YOUR EILIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers.
Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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How Much Does a Crane Operator Make a Year

A crane operator is responsible for the safe and precise transportation of large loads at building sites. Crane operators play a crucial part in the dynamic world of heavy machinery and construction, and the need for people in this role is growing along with the demand for infrastructure projects.

For those interested in this profession, the income potential is a key consideration. According to the U.S. Bureau of Labor Statistics (BLS), the average salary for a crane and tower operator in May 2022 (the latest data available) was $65,220 per year, or $31.36 per hour. Depending on experience, industry, and location, some crane operators can make considerably more.

Read on to learn more about how much a crane operator can make, typical salary ranges, where to find the top-paying jobs, and the training and experience required to get a job as a crane operator.

Key Points

•   Crane operators are essential in construction, handling the safe transport of heavy loads.

•   The average annual salary for crane operators in the U.S. was $65,220 in 2022.

•   Entry-level crane operators typically start around $35,000 annually.

•   Salary potential increases with experience, certifications, and overtime work.

•   Top-paying cities for this profession include Vancouver, WA, New York, NY, and San Diego, CA.

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What Are Crane Operators?

Crane operators handle all aspects of operating a crane — a machine that is used to lift and move heavy loads, machines, materials, and goods for a variety of purposes. A trade job that is often in high demand, crane operators are vital to many industries, including manufacturing, transportation, and construction.

Individuals in this role are responsible for more than just operating controls. To guarantee the safe and effective transportation of objects, crane operators also need to have a thorough awareness of load capabilities, safety procedures, and other site-specific factors.

Crane operators may use a variety of different cranes, including tower cranes, mobile cranes, and boom trucks, to perform their jobs. Though crane operators work solo, it’s not necessarily a good job for people with social anxiety, as they must be able to effectively communicate with other members of the construction team on the ground.


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How Much Do Starting Crane Operators Make a Year?

The starting salary for crane operators varies depending on industry, region, prior training, and certifications, but pay for an entry-level position averages around $35,000 per year, according to Zippia.

The earning potential of crane operators tends to improve as they gain more certificates and experience. The first few years lay the groundwork for skill development, and operators who put in the time and effort can move up the pay scale. Working overtime and overnight shifts can also boost crane operators’ salaries.

Recommended: 11 Work-From-Home Jobs for Retirees

What is the Average Salary for a Crane Operator?

According to the BLS’s most recent data, the average salary for a crane and tower operator in 2022 was $65,220. The lowest-paid 10% earned less than $37,680 that year, while the highest-paid 10% percent earned more than $93,410.

How much a crane operator makes, however, will depend on the operator’s level of expertise, industry specialization, and geographic location.

Crane operators working for construction and mining companies typically earn more than those who work in warehousing, storage, and manufacturing.

The highest-paying cities for crane operators are Vancouver, WA; New York, NY; and San Diego, CA.

How Much Money Does a Crane Operator Make by State?

As mentioned above, how much money a crane operator makes can vary by location. What follows is a breakdown of how much a crane operator makes per year, on average, by state.

State Average Annual Salary
Alabama $52,270
Alaska $78,630
Arizona $65,820
Arkansas $44,900
California $62,730
Colorado $67,550
Connecticut $82,430
Delaware $62,960
Florida $63,310
Georgia $52,830
Hawaii $105,170
Idaho $72,860
Illinois $58,680
Indiana $56,640
Iowa $62,220
Kansas $59,050
Kentucky $53,500
Louisiana $61,710
Maine $55,440
Maryland $63,580
Massachusetts $72,600
Michigan $63,350
Minnesota $74,210
Mississippi $57,190
Missouri $73,020
Montana $67,090
Nebraska $59,440
Nevada $103,350
New Hampshire $67,270
New Jersey $97,930
New Mexico $71,660
New York $136,330
North Carolina $57,080
North Dakota $78,890
Ohio $66,020
Oklahoma $56,580
Oregon $89,190
Pennsylvania $58,920
Rhode Island N/A
South Carolina $55,360
South Dakota $72,060
Tennessee $54,490
Texas $61,500
Utah $60,230
Vermont $64,540
Virginia $64,470
Washington $82,640
West Virginia $51,210
Wisconsin $59,390
Wyoming $75,520

Source: U.S. Bureau of Labor Statistics

Crane Operator Job Considerations for Pay & Benefits

To become a crane operator, you first need a high school diploma or an equivalent. While not required, many crane operators attend trade school to learn practical construction skills and how to operate heavy machinery, including cranes. This is typically a one- or two-year course.

After graduating from a high school or trade school, many crane operators enroll in a general crane operator training program. These programs, which last between three weeks and three months, help prepare aspiring crane operators for the National Commission for the Certification of Crane Operators (NCCCO) examination.

It’s necessary for crane operators to hold the certification relevant to the types of cranes they operate. Some states and cities also require crane operators to hold a local license.

Once you have a job as a crane operator, you can not only earn competitive pay but also benefits. Many companies supplement the base pay with perks like paid time off, health insurance, and retirement programs.

When thinking about a career as a crane operator, it’s important to take into account the whole range of compensation and benefits that come with the job.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Pros and Cons of a Crane Operator Salary

As with any profession, working as a crane operator comes with both advantages and disadvantages. Understanding the pros and cons of this role will help you determine if you’re well-suited for this career path.

Pros of Becoming a Crane Operator

•   Competitive salary: While you may not earn a $100,000 a year salary as a crane operator, this is generally a well-paid position.

•   Opportunities for overtime: Since construction projects often take longer than originally anticipated, crane operators frequently have the opportunity to make extra money by working overtime.

•   Industry need: The need for construction projects is ongoing, which helps to maintain a solid job market for crane operators and a constant flow of employment prospects.

•   Opportunities for advancement: As crane operators gain knowledge and specialized skills, they may be able to negotiate higher wages.

Recommended: The Pros and Cons of Salary vs Hourly Pay

Cons of Becoming a Crane Operator

•   Physically demanding: Operating a crane can be physically taxing since it involves standing or sitting for extended periods of time.

•   Safety concerns: Working with heavy machinery at significant heights is a necessary part of the profession, which has inherent safety concerns. Strict adherence to safety procedures is essential to avoiding accidents.

•   Variable working conditions: Crane operators are often exposed to a range of weather conditions and terrain. Work conditions can be challenging.

•   Training and certification requirements: You can’t just get a job as a crane operator right out of high school. Training and certification is necessary, which means you may need to invest some time and money into the career before you can start making a good salary.

The Takeaway

Crane operator jobs are one of the most coveted positions in the construction business thanks to the competitive pay. On average, crane operators earn $65,220, but certain jobs in competitive areas can pay considerably. Crane operators often have the opportunity to work overtime and typically get benefits on top of their base pay.

Whatever type of job you pursue, you’ll want to make sure your earnings can cover your everyday living expenses. To ensure your monthly outflows don’t exceed your monthly inflows, you may want to set up a budget and check out financial tools that can help track your income and spending.

With SoFi, you can keep tabs on how your money comes and goes.

FAQ

Can you make $100k a year as a crane operator?

The average annual salary for a crane operator is $65,220. However, a highly skilled and experienced crane operator may be able to make a six-figure salary, especially those employed in high-demand industries or areas.

Do people like being a crane operator?

Many people find a job as a crane operator rewarding due to its competitive pay, diverse work environments, and opportunities for skill development and advancement. For some, however, the physical demands and safety risks lower overall job satisfaction.

Is it hard to get hired as a crane operator?

Working as a crane operator can provide ample job opportunities for people who are qualified to work with these machines safely. To get a good job as a crane operator, you typically need to take trade school courses, complete general operator training, and gain apprenticeship experience.


Photo credit: iStock/ewg3D

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Margin Calls: Defined and Explained

A margin call is when an investor is required to add cash or sell investments to maintain a certain level of equity in a margin account if the value of the account decreases too much.

Margin trading — when an investor borrows money from a brokerage firm to enhance trades — is a risky endeavor. Placing bets with borrowed funds can boost gains but can also supercharge losses. Brokers require traders to keep a minimum balance in their margin accounts for this reason.

If the margin account dips below a certain threshold, this is when the brokerage firm will issue a margin call. A margin call is one of several risks associated with margin trading.

Margin calls are designed to protect both the brokerage and the client from bigger losses. Here’s a closer look at how margin calls work, as well as how to avoid or cover a margin call

Key Points

•   A margin call occurs when an investor must contribute cash or sell investments to uphold a specific equity level in their margin account.

•   Margin trading involves borrowing money from a brokerage firm to enhance trades, but it comes with risks.

•   If the equity in a margin account falls below the maintenance margin, a margin call is issued by the brokerage firm.

•   Margin calls are designed to protect both the brokerage and the client from bigger losses.

•   To cover a margin call, investors can deposit cash or securities into the margin account or sell securities to meet the requirements.

What Is a Margin Call?

A margin call is when a brokerage firm demands that an investor add cash or equity into their margin account because it has dipped below the required amount. The margin call usually follows a loss in the value of investments bought with borrowed money from a brokerage, known as margin debt.

A house call, sometimes called a maintenance call, is a type of margin call. A brokerage firm will issue the house call when the market value of assets in a trader’s margin account falls below the required maintenance margin — the minimum amount of equity a trader must hold in their margin account.

If the investor fails to honor the margin call, meaning they do not add cash or equity into their account, the brokerage can sell the investor’s assets without notice to cover the shortfall in the account. This entails a high level of responsibility and potential risk, which is why margin trading is primarily for experienced investors, not for investing beginners.

💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

How Do Margin Calls Work?

When the equity in an investor’s margin account falls below the maintenance margin, a brokerage firm will issue a margin call. Maintenance margins requirements differ from broker to broker.

Additionally, regulatory bodies like the Federal Reserve and FINRA have rules for account minimums that all firms and investors must follow to limit risk and leverage.

Regulation T

The Federal Reserve Board’s Regulation T states that the initial margin level should be at least 50% of the market value of all securities in the margin account. The minimum equity amount must be valued at 50% or more of the margin account’s total value. For example, a $10,000 trade would require an investor to use $5,000 of their own cash for the transaction.

Recommended: Regulation T (Reg T): All You Need to Know

FINRA

The Financial Industry Regulatory Authority (FINRA) requires that investors have a maintenance margin level of at least 25% of the market value of all securities in the account after they purchase on margin. For example, in a $10,000 trade, the investor must maintain $2,500 in their margin account. If the investment value dips below $2,500, the investor would be subject to a margin call.

Example of Margin Call

Here is how a margin trade works. Suppose an investor wants to buy 200 shares of a stock at $50 each for an investment that totals $10,000. He or she puts up $5,000 while the brokerage firm lends the remaining $5,000.

FINRA rules and the broker require that the investor hold 25% of the total stock value in his or her account at all times — this is the maintenance requirement. So the investor would need to maintain $2,500 in his or her brokerage account. The investor currently achieves this since there’s $5,000 from the initial investment.

If the stock’s shares fall to $30 each, the value of the investment drops to $6,000. The broker would then take $4,000 from the investor’s account, leaving just $1,000. That would be below the $1,500 required, or 25% of the total $6,000 value in the account.

That would trigger a margin call of $500, or the difference between the $1,000 left in the account and the $1,500 required to maintain the margin account. Normally, a broker will allow two to five days for the investors to cover the margin call. In addition, the investor would also owe interest on the original loan amount of $5,000.

Increase your buying power with a margin loan from SoFi.

Borrow against your current investments at just 11%* and start margin trading.


*For full margin details, see terms.

Margin Call Formula

Here’s how to calculate a margin call:

Margin call amount = (Value of investments multiplied by the percentage margin requirement) minus (Amount of investor equity left in margin account)

Here’s the formula using the hypothetical investor example above:

$500 = ($6000 x 0.25%) – ($1,000)

Investors can also calculate the share price at which he or she would be required to post additional funds.

Margin call price = Initial purchase price times (1-borrowed percentage/1-margin requirement percentage)

Again, here’s the formula using the hypothetical case above:

$33.33 / share = $50 x (1-0.50/1-0.25)

💡 Quick Tip: When you trade using a margin account, you’re using leverage — i.e. borrowed funds that increase your purchasing power. Remember that whatever you borrow you must repay, with interest.

2 Steps to Cover a Margin Call

When investors receive a margin call, there are only two options:

1.    They can deposit cash into the margin account so that the level of funds is back above the maintenance margin requirement. Investors can also deposit securities that aren’t margined.

2.    Investors can also sell the securities that are margined in order to meet requirements.

In a worst case scenario, the broker can sell off securities to cover the debt.

How Long Do I Have to Cover a Margin Call?

Brokerage firms are not required to give investors a set amount of time. As mentioned in the example above, a brokerage firm normally gives customers two to five days to meet a margin call. However, the time given to provide additional funds can differ from broker to broker.

In addition, during volatile times in the market, which is also when margin calls are more likely to occur, a broker has the right to sell securities in a customer’s trading account shortly after issuing the margin call. Investors won’t have the right to weigh in on the price at which those securities are sold. This means investors may have to settle their accounts by the next trading day.

Tips on Avoiding Margin Calls

The best way to avoid a margin call is to avoid trading on margin or having a margin account. Trading on margin should be reserved for investors with the time and sophistication to monitor their portfolios properly and take on the risk of substantial losses. Investors who trade on margin can do a few things to avoid a margin call.

•   Understand margin trading: Investors can understand how margin trading works and know their broker’s maintenance margin requirements.

•   Track the market: Investors can monitor the volatility of the stock, bond, or whatever security they are investing in to ensure their margin account doesn’t dip below the maintenance margin.

•   Keep extra cash on hand: Investors can set aside money to fulfill the potential margin call and calculate the lowest security price at which their broker might issue a call.

•   Utilize limit orders: Investors can use order types that may help protect them from a margin call, such as a limit order.

The Takeaway

While margin trading allows investors to amplify their purchases in markets, margin calls could result in substantial losses, with the investor paying more than he or she initially invested. Margin calls occur when the level of cash in an investor’s trading account falls below a fixed level required by the brokerage firm.

Investors can then deposit cash or securities to bring the margin account back up to the required value, or they can sell securities in order to raise the cash they need.

If you’re an experienced trader and have the risk tolerance to try out trading on margin, consider enabling a SoFi margin account. With a SoFi margin account, experienced investors can take advantage of more investment opportunities, and potentially increase returns. That said, margin trading is a high-risk endeavor, and using margin loans can amplify losses as well as gains.

Get one of the most competitive margin loan rates with SoFi, 11%*

FAQ

How can you satisfy your margin call in margin trading?

A trader can satisfy a margin call by depositing cash or securities in their account or selling some securities in the margin account to pay down part of the margin loan.

How are fed and house calls different?

A fed call, or a federal call, occurs when an investor’s margin account does not have enough equity to meet the 50% equity retirement outlined in Regulation T. In contrast, a house call happens when an investor’s margin equity dips below the maintenance margin.

How much time do you have to satisfy a margin call?

It depends on the broker. In some circumstances, a broker will demand that a trader satisfy the margin call immediately. The broker will allow two to five days to meet the margin call at other times.


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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

*Borrow at 11%. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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What Is Liquidity In Stocks?

Liquidity in stocks generally refers to how quickly an investment can be bought or sold and converted into cash. The easier an investment is to sell, the more liquid it is. Plus, liquid investments generally do not charge large fees when you need to access your money.

For the average investor, liquidity is an important consideration when building a portfolio, as it’s an indicator of how easy it is to access their savings. That can be important to know and understand when sizing up your overall strategy.

Key Points

•   Liquidity in stocks refers to how quickly an investment can be bought or sold and converted into cash.

•   Market liquidity refers to how quickly a stock can be turned into cash, while accounting liquidity relates to meeting financial obligations.

•   Stocks are generally considered liquid assets, but some stocks may be less liquid, especially those traded on foreign exchanges.

•   Share turnover and bid-ask spread are metrics used to assess a stock’s liquidity.

•   Liquidity risk is the risk of not finding a buyer or seller for assets, which can affect prices.

Types of Liquidity

Liquidity comes in two forms: Market liquidity and accounting liquidity. Here’s how the two are different.

Market Liquidity

Market liquidity refers to how quickly a stock can be turned into cash. High market liquidity means there’s a high supply and demand for an asset. That, in turn, makes it easy for buyers to find sellers and vice versa. As a result, transactions can be completed quickly, even when stock values are dropping.

Accounting Liquidity

Accounting liquidity is related to an individual’s or company’s ability to meet their financial obligations, such as regular bills or debt payments.

For an individual, being liquid means they have enough cash or marketable assets (such as stocks) on hand to meet their obligations.

Companies measure liquidity slightly differently by comparing current assets and debt. In addition to cash and marketable assets, current assets also include inventories and accounts receivable, the money customers owe on credit for goods or services they’ve purchased.

Investors may pay attention to company liquidity if they are researching that company’s stock as a potential buy. Companies with higher liquidity may be in better shape than those in risk of defaulting on their debt.

💡 Quick Tip: Before opening any investment account, consider what level of risk you are comfortable with. If you’re not sure, start with more conservative investments, and then adjust your portfolio as you learn more.

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How Liquid Are Different Assets?

An investor’s financial portfolio may be made up of a number of different assets of varying liquidities, including cash, stocks, bonds, real estate, and savings vehicles like certificates of deposit (CDs). Cash is the most liquid asset; there is nothing an investor needs to do to convert it into spendable currency.

On the other hand, an investment property is an example of a relatively illiquid asset, as it might take a long time for an investor to sell it should they need access to their money.

CDs are also relatively illiquid assets because they require investors to tie up their money for a preset period of time in exchange for higher interest rates than those available in regular savings accounts. Individuals who need their money early may have to pay hefty fines to access it.

Stocks generally fall on the relatively liquid side of the liquidity spectrum. Stocks that are easy to buy and sell and said to be highly liquid. Stocks with low liquidity may be tougher to sell, and investors may take a bigger financial hit as they seek buyers.

What Is Liquidity Risk?

Liquidity risk is the risk that an individual won’t be able to find a buyer or seller for assets they wish to trade during a given period of time, which can lead to adverse effects on the price. Liquidity risk is higher for complex investments or investment vehicles like CDs that may charge penalties to liquidate or access funds early.

Are Stocks a Liquid Asset?

For the most part, stocks that are traded on a public exchange are considered liquid assets. Some stocks, like those traded on foreign exchanges, may be less liquid as it takes more time to execute a trade.

Generally speaking, when an individual wishes to execute a trade, they use a brokerage account to issue a buy or sell order. The broker then helps match the individual with other buyers and sellers hoping to take the opposite action.

This process can take a little bit of time. Most stock trades settle within a two-day period. A stock trade executed on a Wednesday would typically settle on Friday. Settlement is the official transfer of stocks from a seller’s account to the buyer’s account, and cash from the buyer to the seller.

Because it can take some time for trades to be executed, there can be a difference in price between when an individual places an order and when that order is fulfilled.

How to Calculate a Stock’s Liquidity

One way to figure out a stock’s liquidity is by looking at a metric known as share turnover. This financial ratio compares the volume of shares traded and the number of outstanding shares. A stock’s volume is the number of shares that have been bought or sold over a given period. Outstanding shares refer to all of the shares held by a company’s shareholders.

Higher share turnover indicates high liquidity; investors have an easier time buying and selling. Investors might want to pay close attention to low share turnover, as this can indicate they may have a difficult time selling shares if they need to.

Another measure of a stock’s liquidity is the bid-ask spread. Bid price is the price an individual is willing to pay at a given point in time. The ask price is the price at which a buyer is willing to sell. The bid-ask spread is the difference between the two.

For highly liquid assets, the bid-ask spread tends to be pretty small — as little as a penny. This indicates that buyers and sellers are generally in agreement over what the price of a stock should be. However, as bid-ask spread grows, it is an indication that a stock is increasingly illiquid.

A wide spread can also indicate that a trade may be much more expensive to execute. For example, there may not be enough trade volume to execute an entire order at one price. If prices are rising, an order can become increasingly pricey.

💡 Quick Tip: How to manage potential risk factors in a self directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.

Examples of Liquid Stocks

The most liquid stocks tend to be those that receive the most interest from investors. The large companies that are tracked by the S&P 500 Index.

Why Stock Liquidity Is Important for Investors

The relative liquidity provided by stocks can be a boon to investors. Stocks help provide the growth needed for investors to meet their savings goals. They are also relatively easy to buy and sell on the market, allowing investors to access their savings quickly when they need it.

The Takeaway

Liquidity is a measure of the ability to turn assets into cash without losing value. So it’s an important metric for investors to pay attention to as they construct their portfolios. But liquidity is just one of many factors to consider when investing.

Investors may want to know how liquid their holdings are so that they can choose the appropriate mix of investments that align with their risk tolerance. It may be comforting to some to know that they can sell investments with relative ease, rather than have their money tied up for the long-term.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What is good liquidity for a stock?

Good liquidity for a stock refers to an investor’s ability to sell the stock in exchange for cash. If a stock is liquid, then it should be relatively easy to sell. If a stock is illiquid, or has bad liquidity, it may be more difficult.

What is a “Liquidity Ratio?”

A liquidity ratio is a financial ratio that can help an investor determine a company’s ability to pay off its debt obligations, particularly in the short-term. There are several liquidity ratios that can be utilized.

Is a higher liquidity better?

Generally, yes, a higher liquidity is better for investors, as it can signal that a company is performing well, and that its stock is in demand. It can also be easier for an investor to sell that stock in exchange for cash.


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SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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What Is a Quiet Period?

When a company is in the process of going public — getting ready for an initial public offering, or IPO — it is required to enter a so-called “quiet period.” During the quiet period, company executives, board members, management, and employees cannot publicly promote the company or its stock. Investment bankers and underwriters also cannot put out buy or sell recommendations.

In effect, the company and its personnel are required to stay quiet for a period of time surrounding the IPO filing.

Key Points

•   A quiet period is a period of time when a company going public cannot publicly promote itself or its stock.

•   The purpose of a quiet period is to allow the SEC to review the company’s registration without bias or interruption.

•   During the quiet period, companies can discuss information already in the prospectus but should avoid generating public interest.

•   Quiet periods are not only limited to IPOs but also observed by companies around the end of a quarter.

•   Violating the quiet period can result in consequences such as delayed IPO, liability for violating the Securities Act, or disclosure of the violation in the prospectus.

What Is the Point of a Quiet Period?

While companies always have to comply with the federal securities laws — impending IPO or not — the time around an initial public offering is a special time for any company and comes with special rules and restrictions.

It starts when the company files the registration statement (called an S-1) with the Securities and Exchange Commission (SEC), including a recommended offering price for the security, and lasts for 30 days. The S-1 contains:

•   a description of the company’s properties and business

•   a description of the security being offered

•   information about company management

•   financial statements certified by independent accountants

During this time, the SEC looks over all the documentation and approves the registration. The quiet period allows the SEC to complete the review process without bias or interruption, and ensures that the company doesn’t attempt to hype, manipulate, or pre-sell their stock.

Companies are allowed to discuss information already in the prospectus during the quiet period, and oftentimes they will go on a “road show” to present this information to big, institutional investors and get a sense for the potential market. Activities generally avoided during the quiet period are advertising campaigns, conferences, and press interviews — basically, anything that might generate public interest in a company or its securities.

Quiet Periods Not Connected to an IPO

While the IPO quiet period by far gets the most attention, it is not the only time that the SEC reins in the communications of companies and their executives. Typically around the end of a quarter, when a company knows the results it will likely release in its quarterly earnings report to investors, the company observes a quiet period to avoid tipping anyone off or trying to get ahead of them in any way.

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*Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

How Do Companies Violate the Quiet Period?

While the general investing public is supposed to rely on the information contained in S-1s and other official company communications when deciding whether or not to buy the stock, the irony is that public attention to the company is typically very high right before an IPO. All this attention comes at a time when the company itself is supposed to be in its quiet period.

In the past, some companies have run into issues with their senior executives talking to the media during the quiet period. In some cases, the interviews were conducted earlier but published during that time — but either way, it can appear to be a violation of the terms.

What Happens When Quiet Periods Are Violated?

There are no set penalties for violating a quiet period, which is also called “gun-jumping.” If the SEC deems a statement made by a company is in violation of the quiet period, consequences can include:

•   A delayed IPO

•   Liability for violating the Securities Act

•   Requirement to disclose the violation in the company’s prospectus

Delaying the IPO process allows all potential investors to get back on the same page with equal access to information disclosed by the company.

The SEC is also empowered to exact more severe punishments, like civil or even criminal penalties, but typically only pursue these in extreme cases.

What Investors Can Do During a Quiet Period

Quiet periods can be a good time to assess whether you’re interested in investing in a company’s IPO. IPOs have the potential to be lucrative investments, but can also turn out to be extremely volatile and may lose value. There is no guarantee.

Seasoned investors may try to profit at the end of the quiet period, called the quiet period expiration. At this time the stock price and trading volume may see drastic movement up or down, as a flood of information gets released from analysts.

Unbiased prospectus information about recent filings can be viewed on the SEC website. Reading the prospectus can help an investor judge for themself whether a company’s mission, team, and financials look like a sound investment to them.

The Takeaway

The quiet period before an IPO is a time for founders, executives, and employees of a company to stay off the radar, as their official registration forms and other existing info about the company speaks for itself. This allows potential investors to make decisions based on the same information, with no pre-IPO investing hype or manipulation.

Companies may violate quiet periods intentionally or unintentionally, but there are no set penalties for doing so. The SEC may ask that certain measures are taken, however.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.


SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. IPOs offered through SoFi Securities are not a recommendation and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation.

New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For SoFi’s allocation procedures please refer to IPO Allocation Procedures.


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