Trading News

What Is Reflexivity? Reflexivity is a trading concept popularized by George Soros. It posits that there is a two-way relationship between price and underlying fundamentals. This means that price movements can influence the underlying fundamentals, which in turn can influence prices. This theory is based on the idea that people base their decisions on their […]

What Is Monopolistic Competition? Monopolistic competition is a type of market structure characterized by many sellers offering slightly differentiated products. The key characteristics of monopolistic competition are: Many sellers There are many firms in the market, each with a small share of the total market. This gives buyers a wide range of choices. Slightly differentiated […]

What Is a Family Limited Partnership? A family limited partnership (FLP) is a legal entity created by family members to manage and invest family assets. The partnership is managed by one or more general partners, who have full control over the partnership’s activities. The limited partners are typically relatives of the general partners, and their […]

What Is a Lorenz Curve? A Lorenz curve is a graphical representation of the distribution of wealth or income. It is a plot of the cumulative percentages of the population against the cumulative percentages of wealth or income held. The name comes from American economist Max O. Lorenz, who developed the concept in 1905. The […]

A GmbH stands for “Gesellschaft mit beschränkter Haftung”, which means “company with limited liability”. An LLC, on the other hand, is a Limited Liability Company located in the United States, and is the equivalent of Ltd. (limited) as used in the UK. Understanding GmbH Under a GmbH, an investor cannot lose more than the amount […]

What Is Payment-in-Kind (PIK)? Payment-in-kind (PIK) is a type of financing in which a borrower pays interest with additional debt rather than cash. It can also refer to the payment of dividends with stock rather than cash. PIK loans are often used by companies that are struggling to generate enough cash flow to meet their […]

What Is a Bearer Bond? A bearer bond is a debt security issued by a government or corporation. The bond is issued with no named owner, and whoever holds the bond can claim the interest payments and principal. Bearer bonds are also known as “bearer securities” or “unregistered securities”. Bearer bonds were at one point […]

Odd Lot An odd lot is an order for a security that is less than the standard unit of trading for that particular security. An odd lot trade may be more expensive than a trade involving a standard lot, due to the higher transaction costs associated with odd lot trades. An odd lot order may […]

Paradigm shifts occur when markets over-extrapolate one set of conditions into the future despite those conditions being unsustainable. The last decade and even the last 40 years are what traders and other market participants think will probably hold. However, that could easily be wrong because we’re now in a totally different world. If you take […]

Selling volatility is among the highest-risk trading strategies. Also known as being “short gamma”, selling volatility typically means selling options naked or on an uncovered basis. When you sell an option you have a fixed amount of upside – i.e., the premium of the option – and potentially unlimited downside. If you are short a […]