What's NBBO?

NBBO: What It Is and How It’s Calculated

NBBO stands for the National Best Bid and Offer, a regulation put in place by the Securities and Exchange Commission (SEC) that requires brokers who are working on behalf of clients to execute a trade at the best available ask price, and the best available bid price.

The NBBO is a quote available marketwide that represents the tightest spread, e.g. the highest bid price and the lowest ask price for a certain security trading on various exchanges.

Brokers must guarantee at least the NBBO to their clients at the time of a trade, per SEC rules.

How Does “Bid vs Ask” Work in the Stock Market

In order to understand NBBO, investors need to understand the bid-ask price of a security, e.g. a stock. This is also known as the spread (two of many terms investors and traders should know). If an investor is “bidding,” they’re looking to buy. If they’re “asking,” they’re looking to sell. It may be helpful to think of it in terms of an “asking price,” as seen in real estate.

The average investor or trader will typically see the bid or ask price when looking at prices for investment securities. Most of the bid-ask action takes place behind the scenes, and it’s happening fast, landing on an average price. These are the prices represented by stock quotes.

That price is the value at which brokers or traders are required to guarantee to their customers when executing orders. NBBO requires brokers to act in the best interest of their clients.

Recommended: How to Invest in Stocks: A Beginner’s Guide

What Is NBBO?

The National Best Bid and Offer (NBBO) is effectively a consolidated quote of the highest bid and the lowest ask price of a security from all exchanges. NBBO was created by the SEC to help ensure that brokerages offer customers the best publicly available bid and ask prices when trading securities.

NBBO Example

Let’s run through a quick example of how the NBBO might work in the real world.

Let’s suppose that a broker has a few clients that want to buy a stock:

•   Buyer 1 puts in an order to the broker to buy shares of Company X at $10

•   Buyer 2 puts in an order to the broker to buy shares of Company X at $10.50

•   Buyer 3 puts in an order to the broker to buy shares of Company X at $11

Remember, these are “bids” — the price at which each client is willing to purchase a share of Company X.

On the other side of the equation, we have another broker with two clients that want to sell their shares of Company X, but only if the price reaches a certain level:

•   Client 1 wants to sell their shares of Company X if the price hits $12

•   Client 2 wants to sell their shares of Company X if the price hits $14

In this example, the NBBO for Company X is $11/$12. Why? Because these are the best bid vs. ask prices that were available to the brokers at the time. This is, on a very basic level, how calculating the NBBO for a given security works.


💡 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 NBBO and “Bid vs Ask” Prices Are Calculated

To make those calculations on the fly requires a whole lot of infrastructure. Because the NBBO is updated constantly through the day with offers for stocks from a number of exchanges and market players, things need to move fast.

Most of the heavy lifting in NBBO calculations is done by Securities Information Processors (SIPs). SIPs connect the markets, processing bid and ask prices and trades into a single data feed. They were created by the SEC as a part of the Regulation National Market System (NMS).

There are two SIPS in the U.S.: The Consolidated Tape Association (CTA) , which works with the New York Stock Exchange, and the Unlisted Trading Privileges (UTP) , which works with stocks listed on the Nasdaq exchange.

The SIPS crunch all of the numbers and data to keep prices (NBBO) updated throughout the day. They’re incredibly important for traders, investors, brokers, and anyone else working in or adjacent to the markets.


💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.

Is NBBO Pricing Up to Date?

The NBBO system may not reflect the most up-to-date pricing data. Bid, ask, and transaction data is flying around every millisecond, and it takes time to ingest and process it all. For high-frequency traders that are making fast and furious moves on the market, these small price fluctuations can cost them.

To make up for this lag time, the SEC allows trading via intermarket sweep orders (ISO), letting an investor send orders to multiple exchanges in order to execute a trade, regardless of whether a price is the best nationwide.

The Takeaway

NBBO represents the crunching of the numbers between the bid-ask spread of a security, and it’s the price you’ll see listed on a financial news network or stock quote.

The NBBO adds some legal teeth for investors, effectively forcing brokers to execute trades at the best possible price for their clients.

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).


Invest with as little as $5 with a SoFi Active Investing account.


Photo credit: iStock/g-stockstudio

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.

SOIN0723076

Read more

What Is an HMO Plan?

A health maintenance organization, or HMO, is a type of health insurance plan that typically offers lower premiums and out-of-pocket costs in exchange for members using the plan’s network of providers.

That network is usually confined to a certain city or geographic area.

An HMO can be a good choice for healthy people who don’t anticipate needing a lot of specialized care in the coming year.

However, these plans tend to offer less flexibility in where you can go for care than other types of health plans, such as preferred provider organizations (PPOs).

Read on to learn if an HMO could be the right plan for you and your family.

How Do HMOs Work?

HMOs contract with a group of doctors, hospitals, and other healthcare providers within a certain area for a negotiated fee.

In return for accepting lower payments, HMOs offer providers a steady stream of patients. Insurers can then pass the savings onto patients in the form of lower premiums and out-of-pocket costs.

To take advantage of these lower costs, HMO members must, for the most part, receive care only from network providers.

This starts with your primary care physician (PCP). HMO members typically should choose a PCP from the plan’s network. Your PCP takes care of annual check-ups and other medical needs that require an office visit.

In an HMO, your PCP is typically also the gatekeeper for your other health needs. To see a specialist, such as a podiatrist or a dermatologist, you would likely need to first visit your PCP to get a referral to a specialist within the network.

There are often some exceptions to network-only care, however. Emergency care received out-of-network is usually covered. And, with some preventive care services, such as mammograms and gynecological visits, you may be able to see a network doctor without first getting a referral.

In cases where you may have a serious health condition requiring a specialist not included in the network, the HMO may cover that treatment as long as you request pre-approval.

In addition to low premiums, there are often low or no deductibles with an HMO. Instead, the plan will typically charge a copayment, or copay, for each clinical visit, test, or prescription.

How Do HMOs Compare With Other Types of Health Insurance?

Another commonly available health plan offered by employers and health insurance companies is a preferred provider organization, or PPO. These plans have many features in common with HMOs, but also a few key differences.

As with an HMO, members of a PPO plan have access to a network of providers. When they use providers within that network, they will typically pay less out-of-pocket costs, such as copays.

Unlike an HMO, however, care outside of the network is usually also covered, but at an additional cost.

How much the PPO will pay for an out-of-network doctor may be capped at what the PPO deems the “customary and usual” payments for providers in your area. Depending on where you live, that could mean a small or potentially large additional out-of-pocket cost.

Depending on where you live, that could mean a small or potentially large additional out-of-pocket cost.

Another key difference between these two types of plans: With a PPO, you typically do not need a referral to see a specialist, either within or outside of the network.

In addition, PPO plans usually have deductibles, while some HMOs do not. PPO plans also typically have more expensive premiums than HMOs.

However, not having to see your PCP (and pay a copay) to get a referral to a specialist can be a cost saver for members of PPOs.

💡 Quick Tip: Next time you review your budget, consider making room for additional insurance coverage. Think of it as an investment that can help protect you from a major financial loss.

The Pros and Cons of HMOs

It can be a good idea to weigh the advantages and disadvantages of HMOs before you choose a plan, just as you would with any other option.

Here are some of the most common pros and cons.

Advantages of HMOs

•   Lower costs. Premiums, deductibles, and copays are usually lower with an HMO compared to other types of health care plans. Some plans even have no deductible. Your out-of-pocket costs will also likely be lower for your prescriptions.
•   Less paperwork. Because your care is managed through your PCP and you are receiving care through the HMO network, billing tends to be less complicated for those with an HMO.
•   Care is often high quality. Because preventive services are generally fully covered and because your PCP can act as your advocate for early intervention medical care, many people find HMOs provide good quality of health care.

Disadvantages of HMOs

•   Provider Restrictions. With an HMO, you must choose a primary care physician from the plan’s network. This doctor will manage your care and refer you to specialists within the network. If your current doctor is not in the HMO network, you would likely need to switch.
•   Restricted emergency care. Emergency care is usually covered even if it is received from out-of-network providers. But HMOs often have strict rules on what constitutes an emergency and which emergency providers will be covered.
•   Geographic restrictions. Because HMO networks are usually located within one geographic area, your network of providers will only be available within that location. That means if you’re traveling and you need medical care, those bills may not be covered, unless it is an emergency. Also, dependent college children who attend school out of state are usually not covered.

The Takeaway

HMO plans can be a very efficient, low-cost way to manage your health care needs. These plans can foster a close relationship with your primary care physician, who can help you navigate both preventive and specialty care.

Some consumers feel the restrictions on receiving care from out-of-network providers and the hassles of getting a referral can be an obstacle to optimal care.

HMOs are often compared to PPOs, which generally allow members more freedom to see out-of-network providers (though going out of network may cost more). PPOs typically don’t require referrals to see specialists.

To determine which type of health plan is best for you, you’ll likely want to weigh the costs and plan offerings against your budget and health needs. Before choosing a plan, it might also be helpful to track your spending for a few months to see how much you are currently spending on medical care.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.



Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.


Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, Social Finance, LLC (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under Ladder Life™ policies. SoFi is compensated by Ladder for each issued term life policy.
SoFi Agency and its affiliates do not guarantee the services of any insurance company.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.


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.

SOPTO0823139

Read more
piggy bank with bandaids

What Is an Economic Stimulus Package?

AA stimulus package is a set of financial measures put together by central bankers or government lawmakers with the aim of improving, or “stimulating,” an economy that’s struggling.

Individuals in the U.S. during the past two decades have witnessed two major periods when government stimulus packages were used to boost the economy: first, after the 2008 financial crisis, and second, following the 2020 outbreak of the Covid-19 pandemic.

While viewed by some as key to reviving growth, economic stimulus packages are not without controversy. Here’s a closer look at how they work, the different types of stimulus packages, and their pros and cons.

Government Stimulus Packages, Explained

What is a stimulus package? The foundational theory behind these economic stimulus packages is one developed by a man named John Maynard Keynes in the 1930s.

Keynes was a British economist who created his theory in response to the global depression of the era. His conclusion was that, when a government lowers taxes and increases its spending, this would stimulate demand and help to get the economy out of its depressed state.

More specifically, when taxes are lowered, this helps to free up more income for people; because more is at their disposal, this is referred to as “disposable income.” People are more likely to spend some of this extra money, which helps to boost a sluggish economy.

When the government boosts its spending, this also puts more money into the economy. The hoped-for results are a decreased unemployment rate that will help to improve the overall economy.

Economic theory, of course, is much more complex than that, and so are government stimulus packages.

💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

SoFi has built a Recession Help Center
that provides resources to help guide you
through this uncertain time.


Different Types of Stimulus

Monetary Stimulus

To get a bit more nuanced, monetary stimulus is something that occurs when monetary policy is changed to boost the economy.

Monetary policy is how the supply of money is influenced and interest rates managed through actions taken by a central agency. In the U.S., that agency is the Federal Reserve Bank.

Ways in which the Federal Reserve can use monetary policy to stimulate the economy include cutting policy rates, which in turn allows banks to loan money to consumers at lower rates; reducing the reserve requirement ratio, and buying government securities.

When the reserve requirement ratio is lowered, banks don’t need to keep as much in reserve. That means they have more to lend, at lower interest rates, which makes it more appealing for people to borrow money and get it circulating in the economy.

Fiscal Stimulus

Fiscal stimulus strategies focus on lowering taxes and/or boosting government spending. When taxes are lowered, this increases the amount of money that people have left over from a paycheck, and that money could be spent or invested.

When money is spent on a greater amount of products, this increases demand for those products — which in turn helps to reduce unemployment because companies need more employees to make and sell them.

If this process continues, then employees themselves become more in demand, which makes it more likely that they can get higher wages — which gives them even more funds to spend or invest.

When the government spends more money, this can increase employment, giving workers more money to spend, which can increase demand — and so, it is hoped, the upward cycle continues.

In the U.S., a federal fiscal package needs to be passed by the Senate and the House of Representatives — and then the president can sign it into law.

Quantitative Easing

Quantitative easing (QE) is a strategy used by the Federal Reserve when there is a need for a rapid increase in the money supply in the United States and to boost the economy.

For example, on March 15, 2020, the Federal Reserve announced a $700+ billion program in response to COVID-19. In general, QE involves the Federal Reserve buying longer-term government bonds, among other assets.

💡 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.

Pros and Cons of Stimulus Packages

There are advantages and disadvantages to economic stimulus packages, including the following:

Benefits

The goal of a stimulus package, based on Keynesian theory, is to revive a lagging economy and to prevent or reverse a recession, where the economy is retracting rather than expanding. This is a more immediate form of relief as the government also uses monetary, fiscal, and QE strategies to boost the overall economy.

This might include the Fed cutting interest rates, which lowers the rate at which banks loan money to consumers. That can encourage individuals to borrow money, which gets it circulating in the economy.

Taxes may also be lowered, which means workers have more money from each paycheck to spend. That spending may, in turn, increase the supply and demand for products, which can help both employees and businesses.

Risks

However, there are also risks to implementing stimulus packages. An economic theory that runs counter to Keynesian theory is the crowding out critique. According to this thinking, when the government participates in a deficit form of spending, labor demands will rise, which leads to higher wages, which leads to lower bottom lines for businesses.

Plus, these deficits are initially funded by debt, which causes an incremental increase in interest rates. This means it would cost more for businesses to obtain financing.

Other criticisms of stimulus spending focus on the timing of when funds are allocated and that central governments can be less efficient at capital allocation, which ultimately leads to waste and a low return on spending.

Another risk is that the central bank or government over-stimulates the economy or prints too much fiat currency, leading to inflation, or rise in prices. While a degree of inflation is normal and healthy for a growing inflation, price increases that are rapid and out of control can be painful for consumers.

Previous Economic Stimulus Legislation

Perhaps the most sweeping stimulus bill ever created in the United States was signed into law by President Franklin Delano Roosevelt on April 8, 1935.

Called the Emergency Relief Appropriation Act and designed to help people struggling under the Great Depression, Roosevelt simply called it the “Big Bill”; it is now often referred to as the “New Deal.” Five billion dollars was provided to create jobs for Americans, who in turn built roads, bridges, parks, and more.

The Works Progress Administration (WPA) came out of the New Deal, ultimately employing 11 million workers to build San Francisco’s Golden Gate Bridge, LaGuardia Airport in New York, Chicago’s Lake Shore Drive, about 100,000 other bridges, 8,000 parks, and half a million miles of roads, including highways.

Another agency, the Tennessee Valley Authority, collaborated with other agencies to build more than 20 dams, which generated electricity for millions of families in the South and West.

More Recent Stimulus Packages

Additionally, there was the American Recovery and Reinvestment Act (ARRA) in 2009. This was passed into law in response to the Great Recession of 2008 and is sometimes called the “Obama stimulus” or the “stimulus package of 2009.” Its goal was to address job losses.

This Act included $787 billion in tax cuts and credits, as well as unemployment benefits for families. Dollars were also provided for infrastructure, health care, and education, and the total funding was later increased to $831 billion.

More recently, the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, was passed by the United States Senate on March 25, 2020. On March 27, 2020, the House of Representatives passed the legislation and the President signed it into law the same day.

And in March 2021, the American Rescue Plan was passed by the House and the Senate and signed into law by President Biden. This emergency relief plan included payments for individuals, tax credits, and grants to small businesses, among other things.

The Takeaway

Stimulus packages are used to prop up economies when they are struggling or on the brink of a major recession, or even depression. While in recent decades, such stimulus packages have been credited by some for helping the U.S. economy out of the 2008 financial crisis and 2020 Covid-19 pandemic, others worry that the increase in government deficit is unhealthy, and all that spending could lead to inflation.

For individuals, devising a strategy to help save and invest during times when the economy is struggling — and in general — can be important to achieving their financial goals. Chatting with a financial planner about those goals may be helpful for some when it comes to putting together a plan to save for the future.

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).


Invest with as little as $5 with a SoFi Active Investing account.

FAQ

Are there stimulus packages for small businesses?

Yes. For example, as part of the American Rescue Plan, small businesses that closed temporarily or had declining revenues due to COVID were extended a number of tax benefits to help with things like payroll taxes. There were also funds put toward grants for small businesses as part of this economic stimulus package.

How do stimulus packages fight recessions?

Economic stimulus packages are thought to help fight recessions by lowering taxes and increasing spending. The idea is that these measures would boost demand and improve the economy, and thus help avoid or fight recession.

What disqualifies you from getting a stimulus package?

Some reasons that could disqualify you from getting a stimulus package include having an income that’s deemed too high, not having a Social Security number, or not being a U.S. citizen or U.S. national.


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.

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.

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.

SOIN0723179

Read more
The Top Gifts for College Students

The Top Gifts for College Students

When someone heads off to college, they are often setting up a whole new household. They want and need items that help them get their new lifestyle up and running. If you are buying gifts for a student, you can help them achieve that by giving them items that are convenient, practical, and a little bit fun.

That’s where this list can come in handy. It identifies some of the most useful, in-demand gifts you could give a recent high-school grad or current college student. Plus there are clever ideas that may well elicit an “I love it!” from the recipient, such as a subscription to a favorite streaming service.

Read on for smart, inspiring ideas for presents for the students in your life.

Apparel and Accessory Gifts for College Students

College students need to be prepared for any situation on campus, whether that’s a winter storm, a job interview, or a trip to the school’s gym to workout. Clothing and accessories are college gifts that are likely to be appreciated. They’re practical, of course, and can help the recipient save money on clothes.

1. Backpack

A good-quality and versatile backpack is a college staple. Your college student may want a waterproof bag with plenty of compartments with room for books, a laptop, and other personal items. The backpack should also be comfortable to carry around throughout the day and durable enough to last for several semesters.

2. Messenger Bag or Tote Bag

An office-ready tote or messenger bag can be great for internships or interviews. Plus, it can be used beyond college.

3. Activewear

Whether they’re playing on a college team, a regular at the gym, or just like the style and comfort, activewear can be a useful gift for most college students. There are many different styles and brands at various price points.

4. Gym Bag

For college students who may use the school’s gym facilities or participate in a sport, a gym bag is essential. Make sure to get an appropriate size bag depending on how much they need to carry.

5. Outdoor Winter Gear

This may not be as important if they’re attending school in a warm location, but students need warm winter clothing when they’re walking back and forth between classes. Your college student may need warm winter boots for the snow, a heavy coat, thick socks, a hat, and gloves. And those can be pricey, so they make a great gift.

💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

6. Waterproof Gear

The last thing a college student wants is a wet bag while they’re carrying their textbooks and laptop. A waterproof backpack and an umbrella should help protect expensive gear and a raincoat and boots should keep your college student dry between classes.

7. College Hoodies/Sweatshirts

One popular gift for college students is a hoodie or sweatshirt with the school’s team logo. This can typically be found through the college’s website or they may sell them on campus as well.

This type of gear can be especially fun for students to wear when getting involved in on-campus activities and showing their school spirit.

8. Loungewear

The dorm will be home for the next couple of semesters so it’s important to be comfortable. Loungewear can be found online or in stores and come in a variety of styles and prices.

9. Professional Attire

A professional outfit is a must for the college student going on interviews or for any formal gathering. If you don’t feel comfortable picking out an office-ready outfit, there are subscription services available with styles based on the information filled out by the recipient, or a gift card to a specific store may work as well.

Another great idea for a present for a college student: a gift card to a specific store.

Recommended: What Is College Like?

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


Dorm Room Gifts for College Students

There are too many dorm room college essentials to list. The little things go a long way and can help make college life more comfortable and enjoyable.

10. Bedding/Blankets

Most colleges only supply a mattress, so students must bring their own sheets, blankets, and pillows. Colleges typically have dorm beds with a twin XL mattress, but it should be confirmed with the school before buying bedding. Make sure to buy an extra set of sheets so that they always have a clean set.

11. Basic Kitchenware

Whether your college student has a dorm room kitchen or will mostly be eating in the dining hall, basic kitchenware is a necessity for a quick meal or a late-night snack. Basic kitchenware includes utensils, knives, plates and bowls, cups, and food storage containers.

12. Laundry Basket

Dorms typically don’t provide a washer and dryer in the dorm room so students will need to bring their laundry to the communal laundry room.

13. Alarm Clock

Getting up on time for classes can sometimes be a struggle so your college student may need a little help. A digital alarm clock should do the trick even for the heaviest of sleepers.

14. Bathrobe

Aside from the comfort and luxury that bathrobes may bring, they’re a necessity for college. A bathrobe will give a little bit of extra security when your college student goes to take a shower.

15. Storage

Dorm rooms are usually small, so your student will want to maximize every inch they have. There are tons of great storage solutions from under-bed bags and bins, over-the-door storage racks, and hanging strips or hooks.

16. Desk Supplies

Desk supplies are a must-have and make great gifts for college students. Consider desktop organizers, pens and pencils, a lamp, and also a comfortable desk chair.

17. Lap Desk

A lap desk can make a convenient gift for college students to make studying around campus more comfortable. They’re portable and perfect for taking notes or setting a laptop.

18. Streaming Service

It’s easy to spend a lot of money on streaming services, and college students are typically on a tight budget. Get a gift card for one or a couple of streaming services to gift your college student.

19. Personal Safe

If your student has expensive or important items, it’s important they’re kept in a safe location. A small personal safe to protect valuables can give your college student some peace of mind when living with roommates. Plus, if they work a cash job and want to save the money for tuition, they will have a safe place to stash it.

20. Games

Board games or card games are perfect for a relaxing night with roommates and friends.

💡 Quick Tip: Bank fees eat away at your hard-earned money. To protect your cash, open a checking account with no account fees online — and earn up to 0.50% APY, too.

Food and Drink Gifts for College Students

College cuisine doesn’t have to be instant ramen or dining hall meals. You might help your student get set up to cook meals for themselves, which can be a way to 33 Ideas for Saving Money While Dorm Shopping

Tech Gifts for College Students

When picking out a tech gift, choose something that will make school life a little easier and maybe add some fun in between classes. The right gadgets will make workloads more seamless and save your student a lot of time and energy.

26. Laptop

A laptop is an essential school supply. While there’s always the library, laptops give students the freedom and flexibility to work on academic assignments anytime and anywhere. Laptop quality, functions, features, and prices vary widely, so make sure you know what your college student is looking for in a laptop.

Bonus: A laptop can be a way a student can earn money at home (or at their dorm room), whether selling things online or perhaps tele-tutoring in a subject they love.

27. Portable Charger

A portable charger ensures your college student can study, take notes, and work on assignments without worrying about their battery dying. Portable chargers come in a variety of forms with a range of features.

28. Noise-Canceling Headphones

Dorm rooms and other areas around campus sometimes don’t make the best environment for studying. Noise-canceling headphones give your college-bound student a distraction from the surrounding noise.

29. Power Strip

You can never have too many power outlets. Your college student’s dorm room may not have enough outlets for their needs.

30. USB Flash Drive

College students may need a reliable USB flash drive to use when going to the library to work on a project, when a printer isn’t working, or when moving large files. Flash drives come in a range of storage capacities and prices.

31. Portable Bluetooth Speaker

It may not be a must-have, but a portable bluetooth speaker is a fun gift for college students. There are even waterproof models for a little extra protection.

The Takeaway

Still, stumped when it comes to finding gifts for college students? Cash or gift cards go a long way and it allows your college student to purchase exactly what they want or need. A gift card can be used for their favorite restaurant or store or some cash can go towards college books, saving for college tuition, or anything else they may need.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

Photo credit: iStock/Prostock-Studio


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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.

SOBK0823001

Read more
What Is a Volatility Smile?

What Is a Volatility Smile?

A volatility smile is a common graphic visualization of the strike prices and the implied volatility of options with the same underlying asset and expiration date. Understanding an implied volatility smile can help traders make decisions about their portfolio or certain securities.

Volatility Smile Definition

Implied volatility smiles involve the plotting of strike prices and implied volatility of a bunch of different options on a graph with levels of implied volatility and different strike prices along its axes. Each of the options plotted share the same underlying asset and expiration date. On a graph, they appear in a U shape (or a smile).

The volatility smile is a graphical pattern that shows that implied volatility for the options in question increases as they move away from the current stock or asset price.

Recommended: A Guide to Options Trading

What Do Volatility Smiles Indicate?

When plotted out, volatility smiles illustrate different levels of implied volatility at different strike prices. So, at strike price X, the level of implied volatility would be Y, and so on. At an extremely basic level, the “smile” appearing on a chart could be an indication that the market is anticipating certain conditions in the future.

The appearance of a volatility smile could also indicate that demand is higher for options that are “in the money” or “out of the money” than it is for those that are “at the money.”


💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you set up an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.

Understanding Volatility Smiles, and How to Use Them

A volatility smile can have an effect on options prices. If a trader is considering buying or selling a new option, the chart can help the trader understand the likely pricing of that option, given its strike price and how the market values volatility at a given time. Some options (like those related to currency) have a higher likelihood of producing a volatility smile, and some options will never produce one.

Volatility Smiles and Skews and Smirks

It’s not all smiles when it comes to volatility. There are also volatility skews and volatility smirks in the mix, too.

Volatility Skew

A volatility skew, as seen on a graph, is the difference of measured implied volatility between different options at different strike prices. Basically, a skew appears when there’s a difference in implied volatility between options that are out-of-the-money, at-the-money, and in-the-money. In effect, different options would then trade at different prices.

That means a volatility smile is actually one form of a skew.

Volatility Smirk

Volatility smirks are another form of skew, except rather than having a symmetrical “U” shape, a smirk has a slope to one side.

Instead of a straight line on a graph that would indicate no difference in volatility between the in-the-money, out-of-the-money, and at-the-money options, a smirk shows three different measures of volatility depending on where in “the money” the option lands. This is different from a volatility smile in that a smile indicates that in-the-money and out-of-the-money options are at similar, if not equal, levels of implied volatility.

A smirk is commonly seen when plotting the volatility skew of equity options, where implied volatility is higher on options with lower strikes. One explanation for this phenomenon is that traders favor downside protection, and so purchase put options to compensate for risk.


💡 Quick Tip: Options can be a cost-efficient way to place certain trades, because you typically purchase options contracts, not the underlying security. That said, options trading can be risky, and best done by those who are not entirely new to investing.

Volatility Smile Limitations

An important thing for traders to remember about volatility smiles and skews is that they are theoretical, and reality may not necessarily line up with what’s being portrayed on a graph. In other words, it’s not a fool-proof way to get a read on current market conditions.

Also, not all types of options will showcase smirks or smiles, and for those that do, those smirks or smiles may not always be so clearly defined. A volatility smile may not look like a clear-cut semi-circle — depending on the factors at play, it can look like a much rougher grin than some traders expect.

Volatility Smiles and the Black-Scholes Model

The Black-Scholes Model is a formula that takes several assumptions and inputs — strike prices, expiration dates, price of the underlying asset, interest rates, and volatility — and helps traders calculate the chances of an option expiring in-the-money. It’s a tool to help measure risk, including tail risks.

While popular with many traders for years, it fails to predict volatility smiles — exposing a flaw in its underlying assumptions. Because of that, the Black-Scholes Model may not be as accurate or reliable as previously thought for calculating volatility and corresponding options values.

The Takeaway

Experienced options traders may use volatility smiles as one tool to evaluate the price and risk of a specific asset. They’re typically used by more experienced traders who have advanced tools to help plot securities and who are comfortable trading options and other derivatives.

However, you don’t need such advanced tools to start building a portfolio. It’s possible to begin investing for your future goals without using complicated models or processes.

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).


Invest with as little as $5 with a SoFi Active Investing account.


Photo credit: iStock/zakokor

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.

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.

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.

Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
SOIN0823019

Read more
TLS 1.2 Encrypted
Equal Housing Lender