Blog Posts

Dynamic hedging is a form of risk management related to derivatives risk. It is the process by which a trader hedges a position in light of shifts in underlying variables, such as delta and gamma.  This is done to avoid losses that could potentially occur if the hedge is not put on. For example, if […]

Can bitcoin and cryptocurrency replace bonds? Bitcoin and cryptocurrency have seen large price appreciation and considerations as an alternative store of value. On the other side of the spectrum, bonds are seeing price decreases with very low fixed yields associated with them. Bonds – especially nominal rate bonds – have a lot going against them. […]

In an environment where liquidity (money and credit) is abundant, it tends to bid up the prices of everything. Bitcoin and cryptocurrencies, which were once considered purely speculative fringe assets, are now increasingly seeing interest from institutional investors.  For most individuals, bitcoin and cryptocurrencies are a way to speculate. In a bull market, most people […]

How much of your portfolio should be in cryptocurrency? In previous articles, we discussed cryptocurrency as an alternative to stocks and gold. To some extent, it could be. The main issue with cryptocurrencies right now is their speculative nature. It means there’s a lot of volatility, often some 10x the level of stocks, depending on […]

Increasingly, decision-making in the markets is done through artificial intelligence (AI), machine learning, and algorithmic decision-making.  Back in the 1990s and even into the 2000s and today, much analysis on financial markets and securities was done on spreadsheet programs like Microsoft Excel. That’s now changing to more complex ways of analyzing the world. The human […]

Lumber and other wood products went up massively in the early 2020s for various reasons. Many were related to the unique supply and demand parts of the market. Others were related to the monetary environment. We’ll put together the factors driving its movement, and also look at how this can impact other commodity markets that […]

An ESG ETF is designed to focus on the environmental, social, and governance factors of each company in the fund. According to Morningstar data, funds that seek to incorporate information on an investment’s sustainability and overall societal impacts – and select from those that meet specific criteria – have largely outperformed their traditional counterparts over […]

The digital yuan is China’s latest development in establishing itself as a global power economically.  In the mid-1980s, about 90 percent of China’s population lived in poverty. A generation later they’re challenging the United States and the West for superiority in a variety of different ways: Trade (already the largest) Economy and capital (second-largest economy […]

The price of a financial asset is money and credit divided by the quantity. So, understanding the two and the difference between money and credit is important to get at why financial assets are doing what they’re doing and help anticipate risk/reward in a market.   What is money? What is credit? Money is what […]

The rise behind high-flying assets like SPACs (blank check companies), cryptocurrencies, and NFTs is related to the environment we’re in and the large-scale liquidity that has caused a rise in all asset classes.  Interest rates in an economy are a function of nominal growth rates.  In Western economies (the United States, developed Europe, and Japan), […]