Trading News

Speculation has long played a role in shaping the global economic landscape, influencing the rise and fall of assets, securities, and currencies. While speculation can spur innovation and economic growth in cases when resources flow in an efficient way, it can also cause market bubbles and eventual financial crashes when resources are misallocated. Below we […]

Scenario analysis (scenario planning) is an important tool for traders and portfolio managers. The ability to forecast multiple potential outcomes and weigh their probabilities is important for making informed decisions about asset allocation, risk management, and overall investment/trading strategy. This article will explore the concept of scenario analysis, its significance for financial professionals, and the […]

Risk management plays a critical role in ensuring the stability of financial institutions and mitigating potential losses. One essential tool for managing these risks is the risk measure. Risk measures are mathematical models used to quantify and manage the risks taken by banks, insurance companies, and other financial institutions. The aim is to determine the […]

In trading and investing, risk is always a factor. If you don’t take enough risk, you won’t make any money. If you take too much risk, it’ll be hard to keep any. But not all risks are equal. Understanding the concept of uncompensated risk is important for anyone looking to optimize their portfolio and maximize […]

Measuring performance is essential for assessing the effectiveness of a strategy and guiding future decisions. Two common methods used for this purpose are absolute return and relative return. Each approach provides distinct information about an investment or portfolio’s performance. Below we look into the differences between absolute return and relative return, discussing their respective definitions, […]

What Is the Time Value of Money? The time value of money (TVM) is the concept that money you have now is worth more than the same amount of money in the future. This is because the money that you have now can be invested and grow over time. The time value of money is […]

The Mutual Fund Separation Theorem (MFST) is a concept in portfolio theory that has impacted the way traders/investors approach portfolio construction and management. The theorem posits that under specific conditions, market participants can optimize their portfolios by investing in a select number of mutual funds and risk-free assets, rather than purchasing a larger number of […]

Market impact is a concept in financial markets, referring to the effect a market participant has when buying or selling an asset. It is an essential consideration for large investors, such as financial institutions, as it can significantly influence investment decisions and overall profitability. This article will explore the nuances of market impact, its relationship […]

Liquidity is a fundamental concept in economics and finance that plays a significant role in the smooth functioning of the global economy. It refers to the ease and speed with which assets can be converted into cash or the ability to meet financial obligations without incurring significant losses. A proper understanding of liquidity is essential […]

Derivatives have a long and complex history that traces back to ancient civilizations. These financial instruments have evolved significantly over time and have become an important tool for managing risk, hedging investments, and even speculating on market movements. We’ll take a look at the evolution of derivatives from ancient cultures to the modern era, highlighting […]