Blog Posts

Rubber Band Trading is a popular mean reversion trading strategy that relies on the use of Bollinger Bands and other mean reversion indicators. This approach is based on the idea that financial markets are inherently cyclical, and that asset prices tend to revert to their mean values over time. By identifying periods when prices have […]

Selling options before expiration can be advantageous in certain circumstances. Traders may choose to sell an option early if they have achieved their profit target or if the market conditions have changed unfavorably. Additionally, selling an option before its expiration date may help reduce the risk of being assigned on short positions or positions that […]

The “buy the dips, sell the rips” strategy is largely based on the belief that short-term price fluctuations are often driven by market sentiment (“noise”) rather than fundamental changes in the value of the asset. The fundamental value of a stock (or piece of equity in a business, more generally) is the amount of cash […]

In markets, certain events can have a significant impact on trading volumes and market volatility. One such event is known as quadruple witching or, more accurately in today’s context, triple witching. This phenomenon, which occurs four times a year, refers to the simultaneous expiration of three major types of derivatives contracts: stock options index futures, […]

The financial industry is a multifaceted ecosystem where various players interact and collaborate to keep the market wheels turning. Among these players, two key groups that stand out are the buy side and the sell side. Despite their interdependence, they maintain distinctive roles and responsibilities that contribute to the overall functioning of the financial markets. […]

Mergers and acquisitions (M&A) are pivotal events that can transform the trajectory of the involved companies. M&A activities are prevalent as industries evolve. One key aspect of any M&A transaction is the Purchase Price Allocation (PPA), a critical accounting process that determines the fair value of acquired assets and liabilities. The PPA serves as a […]

In international finance and trade, commodity currencies play an important role in shaping the dynamics of global economies. These currencies, often also referred to as “resource-based currencies,” derive their value and stability from the exportation of key commodities such as crude oil, gold, copper, and agricultural products. Typically, nations with abundant natural resources and significant […]

Forex (foreign exchange) correlations refer to the interconnectedness between different currency pairs in the global foreign exchange market. By understanding these correlations, traders can make more informed decisions, manage risks more effectively, and diversify their portfolios. In this article, we’ll explore key aspects of forex correlations, including types, common pairs, factors affecting them, and their […]

The foreign exchange market, also known as the forex market, is the largest financial market in the world. It is a decentralized market where currencies are bought and sold, and the exchange rate between two currencies fluctuates based on a variety of factors.  One of the critical factors that affect exchange rates is the balance […]

During times of financial crises, central governments and central banks have a tendency to print money to buy assets and backstop financial markets.  This action comes at a cost to the balance sheets of these entities.  However, the impact of these actions creates a safer environment for households. Unlike the private sector, central governments and […]