Category: P

A security that pays investors periodic dividends but does not allow them board vote. There are many forms of this stock.

An investment that comes from a private not corporate investor. The investor usually exits at the first public sale.

An insurer owned by a single company. They write insurance for that company only. While easy to manage it may be more risky. AKA single parent captive. Refer to agency captive, captive,

An option whose payment depends on the ending market price of an asset. There are many types of this option. Refer to path dependent option.

The risk that occurs when a large option trades near strike price at its maturity. Whether above or below the strike price it changes the hedge.

How a portfolio is managed. Risk and returns are measured to create diversification strategies.

Funding arranged before loss is incured. It is less expensive than post loss financing because the capital is there when its needed. Refer loss financing.

A debt not registered with the securities regulator. It is sold on a ceveat emptor basis to only experienced investors. It is illiquid and only transfers to a short list of buyers.

A swap transaction that allows an insurer to diversify their portfolio by exchanging uncorrelated catastrophic hazards. Refer to catastrophe reinsurance swap.

When a counterbid is placed to prevent hostile takeover.

An option whose payment depends on the price path of the asset at another time. There are many types of this option. Refer to path independant option.

The records used to report securities and penny stocks. Before the internet it was recorded on pink paper.

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.

An insurance policy that includes more than two different kinds of coverage; for example, personal and commercial.

The amount of time it takes to pay back investments. The investment repayment takes the form of cash flows over the life of the asset. A discount rate can be given. Refer

When stock with heavy options trades near strike price of its most active option.

When the price of cash is greater than the price of the futures. Refer to basis risk and negative basis.