Capital Gains Explained Leave a comment

what is the symbol of gain capital holdings, inc.

But a lot of macro factors come into play, and then you try to do what’s right – what right they can. And so in terms of our business being healthy, absolutely fine. In terms of trying to arrive at a fair outcome, in terms of a strategic alternative, you know what, there was a lot of clamorings to do a strategic review of what our options could be, and that’s what we did. And this one ticked a lot of boxes in a lot of positive ways.

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I mean, at some level, it’s never-ending because you always want to add new venues for your customers. We have dealt with the complexity of regulation in terms of being able to provide all of these different products in all of these different jurisdictions. And we are able to now offer integrated execution and clearing. In addition, certain types of capital losses are not deductible. If you sell your house or car at a loss, you will be unable to deduct the difference on your taxes.

How Are Capital Gains Taxed?

We have a very scalable platform now to all of these markets, and we are looking for ways to gather more flow across that network. And clearly, the Gain transaction helps us with that. Part of StoneX Group, Inc., GAIN Capital Australia Pty Ltd. is an Australian company that provides online foreign exchange trading services.

  1. I think myself and our team are really looking forward to leveraging all the capabilities and infrastructure that INTL FCStone has put into place over the years.
  2. And when you combine more flows and internalize them you get more natural offsets.
  3. And Sean, if I may just add to your point on the summary page there about opportunity, I think its key that people realize those are measured and post-close timing in months, not in years.
  4. We obviously increased our customer balances by $1 billion to $4 billion.

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You can reduce capital gains tax on your home by living in it for more than two years and keeping the receipts for any home improvements you make. The cost of these improvements can be added to the cost basis of your house and reduce the overall gain that will be taxed. Certain types of stock or collectibles may be taxed at a higher 28% capital gains rate, and real estate gains fxcm scam can go as high as 25%. Moreover, if the capital gains put your income over the threshold for the 15% capital gains rate, the excess will be taxed at the higher 20% rate. Capital gains are realized when you sell an asset by subtracting the original purchase price from the sale price. The Internal Revenue Service (IRS) taxes individuals on capital gains in certain circumstances.

So it is difficult to see sort of the direct correlation between the efforts you’re putting in and sort of where it shows up exactly. And I think that consistent with what Gain’s philosophy and activity has been. INTL has been out there, looking for opportunities to step in.

what is the symbol of gain capital holdings, inc.

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But this really comes back to the sort of three underlying thesises that we’ve laid out for you. I think this gives us the ability to do that. So with that all said, if you move to the right, you can see the adjusted net revenue of Gain in 2017, 2018 and 2019. You can see what we’ve projected, which is that green little diamond on the left so still way below 2018, still way below the three-year average. And that’s the year average are gaining 2019, but a modest return to better market conditions, and as Glenn has told you, that has already shown up in the January metrics that they have published. And then in year two, we’ve assumed a bit of a reversion to the mean being the three-year average, and that’s how we have come up with the revenue projections.

We also have a customer base in professional traders who are active traders in the market, either on the exchanges or in foreign exchange or in equities. In terms of our clients, and I’ll come on to little grouping and segment analysis. These would be businesses looking to hedge risks, so they want to access the financial markets to take risk out of their production process, make their business less volatile and more viable.

The second thing is, us adding some margin by doing things that Gain couldn’t do with their current flow, so internalizing clearing and such. And the third aspect of that is, if we can combine our transaction flows, cross spreads internally, get better pricing in terms of how we look at risk off to the market. So really, all of those things are laid out-year in more detail, and I think we’ve discussed them all.

I would like to add that I’m not saying it would ever happen. But one of the things we are getting in this deal is we are getting a lot of potential volatility on the upside. If we end up having a year like 2018, you would add another 5 percentage points onto the combined ROE.

Welcome to our call to discuss the acquisition of Gain Capital Holdings. Joining me on the call are – is Glenn Stevens, the CEO of Gain, and he will speak in just a second. We’ll discuss the details of this deal in a moment, but just want to tell you that we’re very excited about this merger. We think it works for us strategically on a number of levels. We had a new digital platform to increase transaction volume and expand product distribution of our global financial services network. StoneX Financial Pty Ltd. is a forex and Australian CFD trading company with 40 years of experience.

what is the symbol of gain capital holdings, inc.

And indeed, as I’ll show you later, we back tested that and it significantly reduces, in fact, our stand-alone volatility. And whether it’s equities or crypto or whatever it might be, you can have the platform and you can have your customer relationships of the product, the infrastructure and the underpinning is an important part of it. So to me, being able to tap into, and I use the word ecosystem because I think that’s exactly what Sean and his team have built. When we’re able to bring to our 130,000 customers, all these – this new capability, not to mention new customers that we can bring in, because we’ve developed a lot of expertise over time in onboarding.

While capital gains may be taxed at a different rate, they are still included in your adjusted gross income, or AGI, and thus can affect your tax bracket and your eligibility for some income-based investment opportunities. Capital gains (and losses) apply to the sale of any capital asset. That includes traditional investments made through a brokerage account such as stocks, bond and mutual funds, but it also includes real estate and cars.

Of course, there a number of factors that can impact your AGI other than capital gains. When you make money on an investment, it’s considered a capital gain, and you will need to pay a capital gains tax (with some exceptions—more on that later). Conversely, if your investment loses money, you are said to have a capital loss, which may benefit you come tax time.

The company operates in two segments, Retail and Futures. It specializes in over-the-counter (OTC) and exchange-traded markets. It provides services to retail customers through and, as well as through brokers and white label partners. The company offers execution and risk management services for exchange-traded futures and futures options on the United States and European futures and options exchanges; and online trading services. GAIN Capital Holdings, Inc. was founded in 1999 and is headquartered in Bedminster, New Jersey.

I just like to mention, I mean, the credit people don’t really think about it this way, but we have a pretty large holdco revolver and have significant flexible –well not flexibly, undrawn capacity under that at the moment. It’s not sufficient to consummate this transaction, but we certainly will have a lot of liquidity post this transaction and anticipate a very fast deleveraging, both through utilizing our own cash on hand. And also, as we’ve indicated, we believe we can extract some capital out of the business once we merge the entities. So as you said, if you offer them equities and you offer them futures, but you can’t do the routing and the clearing and the custody behind it, then your margins are thin that it makes it a bigger hurdle to get over. I mean, one of the reasons, I think that Gain didn’t go down the route in the U.S. of trying to set up an equity businesses.

So you consider – you can look at – as I mentioned earlier, look at Gain from the lens of the last three months of the last year, of the last three years and going forward. I think that when we looked at all different strategic opportunities. And then this transaction does represent a premium to the closing share and to the kind of weighted average in the last 30 days and such. It’s not like these considerations weren’t taken in.

To us, it’s very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Joseph Schenk. First of all, the market, whether or not was right or wrong, clearly didn’t recognize the value.

Individuals whose incomes are above these thresholds and are in a higher tax bracket are taxed 20% on long-term capital gains. High-net-worth investors may have to pay the additional net investment income tax, on top of the 20% they already pay for capital gains. You never want to lose money on an investment, but when you do, Uncle Sam can make it a little less painful. When you sell an investment for less than your cost basis, the negative difference between the purchase price and the sale price is known as a capital loss. Like capital gains, capital losses are classified as either long-term or short-term. Mutual funds that accumulate realized capital gains must distribute the gains to shareholders and often do so right before the end of the calendar year.

We are just slightly below that on a trailing 12-month basis. Prior to – for our year-end to September, we actually exceeded that target. And you can see our earnings per share, $3.36. Our client count at the moment is roughly 30,000 commercial, institutional-type accounts, and we have over 125,000 retail accounts in our system.

It allows more easy cross-selling and for clients to, in one place, access all we have to offer. And indeed, Gain provides for us a part of this digital platform that we need for a new customer base, which is really the retail side. We grow our client footprint, and we increase our client float, and we add a significant new retail client segment. This also brings to us technical and marketing expertise to accelerate the digitization and integration of our client platforms from electronic trading to analytical tools to market intelligence. It is priced at a small premium to against tangible book value. It is accretive to earnings and to return-on-equity, which is one of our primary performance metrics.

And I think what’s really indicative of the value that can be created, to your point, in a short payback period, you’ll notice a lot of those, say, 3 to 6, 0 to 3. And on the long tail of 12 to 18, that’s key because it shows you what can be converted very quickly. So this is a busy slide, detailed slides here. Let me do my best to try and make this understandable.

We believe if we do that, we’ll become a bigger company. And if we do this right, on the fully synergized year-two basis, this could get us to above 20%. And I don’t think there’s a financial business out there who is in the sort of clearing and execution side of the business that is able to achieve those kind of returns. So for example, Gain doesn’t clear their own futures business, we will clear all those current clients.

So instead of having to take that traffic and send it out externally, we’re going to take that traffic and send it internally. So I think we addressed that to some degree, just being able to have a much broader offering to our existing clients and to clients we don’t even serve yet. So I guess, I would just maybe simply answer that by just saying that’s the potential benefit and the beauty of all the capabilities that INTL’s already got in place.

We obviously increased our customer balances by $1 billion to $4 billion. We will also be taking out the $92 million of convertible notes due in 2022. And prior to closing, Gain will repay the $60 million convertible note outstanding, and they will do that from cash on hand prior to us closing the transaction. And as you said, there’s all kinds of ways that we’ll be able to work within your ecosystem and just be a stronger offering and a stronger choice for our customers. Ladies and gentlemen, thank you for standing by, and welcome to INTL-Gain update conference call.

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