POSITION TRADING
A strategy that hold a long or short position for a week to several months. It is used in the short term but has a better chance than momentum trading.
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A strategy that hold a long or short position for a week to several months. It is used in the short term but has a better chance than momentum trading.
When an insurer can write a large amount of policies on one line or risk.
The potential a company will file for bankruptcy. It is used to calculate the default in default models.
The amount an insurer needs to cover their expenses. Along with premium loading it is used to calculate fair premium. Refer to expense loading.
When a company cannot share any news because it is registering a new issue.
The difference between average bids and offers over a period of time. Refer to effective and quoted spreads.
The second sale offering of securities under the existing issue. This helps raise benchmarks by grouping more liquidity in a smaller amount of issues.
An insurance policy with a premium that is based on the previous year
The purchase of goods or services by a bank or investment bank in exchange for lucrative feebased new issue or corporate finance mandates. Refer to tying.
A firms formal take on corporate goals, activities, and stakeholders expectations regarding risk activities. Refer to risk tolerance.
When a variable rate of interest is exchanged for a fixed rate of interest to accommodate flexibility between two terms experiencing different financial needs. Refer to variable principal swap.
The market where securities are purchased and sold between investors, not the issuing companies. The New York Stock Exchange and NASDAQ are examples of secondary markets. This scenario creates an unpredictable environment
Default more commonly seen in international transactions resulting in a loss when one party fails to deliver after the other party has fulfilled their part of a contract. AKA clean risk and
The percentage of shares sold short that a firm holds indicating an expected increase or decline in the market.
The prevention of the issuer of a bond by an indenture preventing the recovery of the bond until the attainment of a certain price or a distinct percent of the conversion price
A contract granting the issuer of a bond a fixed spread for a short time before the trade is complete. This guarantees the price will be a reference not a spread. Refer
An attempt to generate value by the way an assets dynamic movement in the market is described without considering the assets history. Refer to markov process.
The deviation of the focus of a hedge fund or investment company to generate alternate investment opportunities. This change in consistency may be risky because the new opportunity may not have been
A forward agreement to buy undrawn loans or credit agreements. The investor gets a commitment fee. AKA synthetic credit facility.
The smallest amount that can be traded in bonds and securities.