Amortization is an accounting term that describes the method used for allocating the capital costs of intangible assets over time. It is also often used as a method for creating fixed payments on a loan or bond with a rate of interest so that the payments stay the same for the entire duration of the […]
Bitcoin Cash is a cryptocurrency that split from Bitcoin Classic in a ‘fork’ event, where holders of the original Bitcoin were allowed to exchange their units for new Bitcoin Cash units. The split from which Bitcoin Cash emerged was driven by a disagreement among Bitcoin stakeholders about altering the code of Bitcoin to allow it […]
An ad valorem tax is any tax that is based on the assessed value of an asset or set of assets. Ad valorem taxes are a method of periodically taxing assets and properties, as opposed to a transactional tax that only taxes a good or service once at the time of exchange. Ad valorem taxes […]
A basket trade is any trade that is performed for a set of 15 or more different shares or other securities, usually as a set proportion of those shares. Basket trades are most commonly used by institutional investors to maintain a proportionate portfolio of different shares or to purposefully alter the proportion of the shares […]
Contrarian traders base their trading strategies on the underlying principle that the market tends to overreact at both extreme highs and lows. Contrarian traders see these extremes as opportunities to profit from sharp reversals that can occur when the market corrects from a recent overreaction. However, contrarian trading strategies are more complex than simply betting […]
The wash sale rule is an IRS taxation regulation governing the use of investment losses in capital gains tax. The wash sale rule prohibits the investor from claiming any sale of a security as a loss if a similar security is purchased within 30 days of the sale. The wash sale rule also applies to […]
What is a Bull Trap? A bull trap is a trading term that describes a false signal to bulls that the price is going higher, but really is just a fake move before going lower. The increase has to be just enough to lure the bulls in, only for the stock to sink again, […]
Table of contents What is a Bear Trap Example of a Bear Trap How to Avoid a Bear Trap Updated 10/25/2023 What is a Bear Trap? Bear traps most often occur in strongly trending stocks. A bearish catalyst, usually supported by bearish short-term price action, suggests that a trend reversal is imminent, prompting bears to […]
A strangle is an options trading strategy that uses a put and call on the same underlying security with the same expiration date to bet on a substantial price move in either direction. Strangles are most often used in situations where the trader expects a substantial price move, but is unsure of the direction. Strangles […]
Mark to market refers to an investment measure or accounting tool used to record an asset’s value to reflect the market value of the security rather than its book value. The tool is commonly used on futures accounts and helps to ensure that all margin requirements have been completed. When it comes to mutual funds, […]
