Category: S

When a short position is used to protect the long position. Refer to long hedge.

When stop orders cause upward or downward market movement setting off additional stop orders, continuing until several cycles occur. Refer to gather in the stops.

Risk due to changes between two assets with a common link. This is a category of market risk.

The offset of foreign exchange market effects by increasing or decreasing the national money supply by a monetary authority such as a central bank. It is a manipulation of the value of

A contract with the closest maturity date on eurodollars or a loan or bond with a short maturity.

A loan created on an unfounded basis using credit derivatives. Refer to cash collateralized debt obligation.

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.

New securities offered after a company has made it’s inaugural primary offering with the capital raised usually going towards refinancing or capital growth. Refer to addon.

In the event a fraud is committed per a poorly written term of an insurance policy this clause protects the insurer from having to make a settlement payment. Legal fees and judgments

A position this is borrowed or sold that benefits from depreciation. When repurchased in the market profit is made. AKA short. Refer to long position, naked short, short sale, and short seller.

An attempt to circumvent economic recession identified by excess demand and increasing inflation made by a central bank or other monetary authority. Under certain circumstances such as when fiscal policy or monetary

An illusion of an earnings boost when a company

An attempt by an investor to increase their number of outstanding shares and reduce the par value of their common stock lowering the purchase price to attract investors. Refer to reverse stock