Blog Posts

The endowment effect is a cognitive bias where one is inclined to value what they already own more than something they do not own. This bias was first identified in a study by Kahneman, Knetsch, and Thaler (1990) titled Experimental Tests of the Endowment Effect and the Coase Theorem. The study found that people placed […]

A bear trap in financial markets is when a security, or a market as a whole, experiences an extremely sharp decline but eventually reverses. Typically, these drops are sudden and steep, resulting in heavy losses for investors holding the affected assets. In some cases, bear traps can be caused by market speculation or news events […]

As interest rates rise, the value of call options increases and the value of put options decreases, holding all else equal. Below we explain why. Positive Rho for Calls; Negative Rho for Puts Call options have positive Rho, which means as interest rates increase, call options tend to increase slightly in price, all else held […]

What Is a Cash and Carry Trade Strategy? A cash and carry trade is a type of price arbitrage strategy in which an investor buys an asset and simultaneously sells a futures or derivatives contract for the same asset, or vice versa. The goal of this strategy is to profit from the difference between the […]

What Is A Martingale System in Financial Markets? A Martingale system is a type of investment or trading strategy that involves increasing the amount of money invested in an asset as the price of that asset goes down. The idea behind this strategy is that the increased investment will eventually pay off when the price […]

What Is An Oligopoly? An oligopoly is a market structure in which a small number of firms dominate the industry. In an oligopoly, each firm has a significant level of market power and can influence prices and other market conditions. Oligopolies often arise in industries where there are high barriers to entry, such as industries […]

What Is a Cash on Cash Return? A cash on cash return is a measure of the cash flow that an investment generates relative to the amount of cash invested. It is calculated by dividing the annual cash flow generated by the investment by the initial cash investment, and is expressed as a percentage. For […]

A hedge fund and venture capital firm are both investment vehicles that seek to grow investor capital. However, the strategies and objectives of each firm are distinct. In this article, we’ll explore these differences and the similarities that they sometimes have. Hedge Funds vs. Venture Capital Firms – Exploring the Differences Hedge funds are typically […]

A hedge fund and mutual fund are both types of investment vehicles that provide a way for individuals to invest their money. However, they each have different goals, strategies, and management structures which makes them appealing to different types of investors.   Hedge Fund vs. Mutual Fund – Key Takeaways Hedge funds are typically only […]

What Are Accredited Investors? Accredited investors are eligible to participate in certain securities offerings, including private placements, structured products, and private equity, venture capital, or hedge funds that may not be available to the general public. These investments can provide investors with access to higher returns and increased diversification of their portfolios that might not […]