Financial Options: A Guide to Puts and Calls If you are interested in trading financial options, you need to understand the basics of puts and calls. These are the two types of derivative contracts that give you the right, but … Continue reading What are financial options?
A hedge fund is an investment vehicle that pools together money from a group of investors and uses a variety of investment strategies in an attempt to generate high return, which is very similar to what we have discussed under … Continue reading What are Hedge Funds?
In the intricate world of financial markets, efficiency and transparency are paramount and the SEC (US regulatory body) has adopted the rule to shorten the settlement cycle and yet another step to improve the financial markets. The new settlement cycle … Continue reading Moving to T+1 Settlement: Streamlining the Financial Markets
Futures and forwards are financial derivatives that are used to hedge against or speculate on the price movements of an underlying asset. The forwards gave birth to derivative markets and were initially used for various commodities only. With the development … Continue reading What are futures and forwards?
Liability-driven investing (LDI) is an investment strategy that aims to align the investments of a pension fund or other institutional investor with the liabilities or obligations it is expected to meet. In other words, LDI seeks to match the assets … Continue reading What is LDI?
All financial institutions are subject to various laws and regulations that are designed to protect consumers and ensure that they are treated fairly. If these laws or regulations are violated, an institution could potentially face fines or other penalties. This … Continue reading What is compliance?
We hear this term in the news a lot. The economic downturn supported by the de-globalization triggered by the Russia-Ukrainian war as well as the increase in energy costs caused this term to appear in the news on the daily … Continue reading What is Inflation?
Introduction to yield curve The definition of a yield curve states that it is a line that plots interest rates of bonds that have an equal credit quality across differing maturity dates. The slope of the yield curve gives an … Continue reading What is a yield curve?
The idea of putting all eggs in different baskets is inherently based on pure math and the way the risks are lowered non-linearly, while returns being the average return on the instruments. Continue reading Diversification and why having all eggs in one basket is riskier
When it comes to investing, majority of population directly think about returns and how much one can make by allocating their funds. However, the returns come hand in hand with another measure of investment performance – risk. While the returns are fairly easily observable, measuring risk can be more tricky and have multiple layers of how we can approach them. Continue reading Measuring Risk 101
In a world where investors are constantly looking for new ways to invest, structured products could be exactly what they are searching for. Whereas equities are usually tied to the performance of a company or index and bonds have specific rates at which they are paid out, structured products tend to have more flexibility in both their risk and return profiles. Continue reading What are Structured Products?
Generally, what comes to mind when we hear “financial funds” is money. While this is accurate, this term perfectly describes a “pool” of money. Usually, pooling money is a way to achieve a specific financial goal that is probably capital-intensive. … Continue reading What are Financial Funds?
Derivatives are often thought of as confusing and overly complicated. Simply put, it is a financial product that derives its price from the underlying assets, which can be stocks, bonds, commodities, exchange or interest rates, market indexes, and even other derivative instruments. Continue reading What are derivatives?
When considering investing, the return is as one of the most crucial factors the investors look at. It is not the most complex concept when we look at the value of a portfolio, however the calculations can become very intricate when we look at large, multi-asset class portfolios with transaction costs, cash flows, dividends and interest payments, and frequent rebalancing. Continue reading Measuring Returns 101
While equities are the most visible asset class, the bonds are the most diverse. Typical company has one, few firms have a couple of equities share classes. The most notable examples are tech firms such as Alphabet and Facebook having … Continue reading What are bonds?
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