Duration is a complex measure of a bond’s price sensitivity to interest rate changes. Investors who simply intend to hold a bond until maturity will have little concern for its duration, but investors who may wish to resell the bond before maturity or whose decision-making is affected by their current portfolio value will be interested […]
A credit swap is the colloquial term for a credit default swap or CDS, which is a credit derivative where the buyer pays a premium to the seller in exchange for the seller’s promise to pay out a given amount to the buyer if the underlying credit instrument fails to meet one or more outlined […]
Muni bonds is the colloquial term for municipal bonds, which are credit instruments offered by cities, states, counties and other government entities smaller than the federal level for use in capital expenditure projects, such as the building of roads, schools and hospitals. Muni bonds stand out for their federal tax exemption, and their exemption from […]
CDO is the acronym used for a collateralized debt obligation, which is a synthetic investment product made up of a range of income-generating assets that is divided into tranches with different risk profiles and repayment priorities. Breaking Down CDO While CDOs may seem complex at first glance, they are actually reasonably simple to understand, even […]
ICE is the acronym used for the Intercontinental Exchange, which is an electronic exchange platform designed originally for the trading of energy related products, but which has expanded to offer trading in other commodities, foreign exchange and interest rate products and equity index futures. ICE is now the parent company of a wide range of […]
A risk/reward profile is the ratio of risk to reward in any given trade as determined by the target closing price and the set stop-loss order. Risk/Reward Profile Example Suppose that a day trader buys 1 share of Company A at $20. The day trader expects the price of the shares to rise to $30 […]
A hidden seller is a seller who is using the capacity to hide sell orders provided by their broker. Hidden sellers can employ 3 separate functions that can help to mask their trade and minimize its impact upon the market. The Purpose of Hidden Sellers Hidden sellers attempt to mask the size and/or origin of […]
Ethereum is one of the world’s most popular cryptocurrency platforms, with a special focus on creating a universal distributed digital system for transactions. Bitcoin Vs Ethereum Ethereum is often touted as an improvement upon the original cryptocurrency, Bitcoin. However, it is more accurate to say that Ethereum is a 2nd generation cryptocurrency with a special […]
An individual account is a type of trading account offered by brokers to day traders. Individual accounts are contrasted with a variety of alternative account types. Individual Account Features An individual account with a broker is one where only the named individual has access to the account, a right to trade using the account and […]
A thick market has a high number of buyers and sellers, which means that there is a high volume of trade and a low level of price volatility. Thick Market Features The high number of buyers and sellers in a thick market means that it has certain resulting features. A thick market tends to have […]
