Trading News

Precious metals arbitrage involves exploiting price discrepancies in the market for precious metals like gold, silver, platinum, and palladium. Arbitrage strategies can be implemented across different markets, exchanges, or products to capture risk-free profits. These strategies leverage differences in prices that should not exist in efficient markets due to supply and demand equilibrium.   Key […]

Arbitrage exploits price discrepancies in identical assets in different markets to secure risk-free profits (given perfect conditions). The “arb” strategy hinges on the ability to execute transactions quickly to exploit these temporary mispricings. This makes it a low-risk, low-return approach. Relative value strategies focus on identifying price mismatches between related but not identical assets. It […]

Macro-to-micro analysis involves examining economic conditions and trends on a large scale (macro) and then translating those insights into more detailed, specific contexts (micro). This method is widely used in economic and financial analysis to understand how broad economic forces affect individual sectors, companies, and even specific assets. It often involves having a certain structure […]

European stock options, European index futures and European index options are now available at Interactive Brokers through Cboe Europe Derivatives (CEDX). Key Takeaways Clients of IBKR can trade more than 300 stock options on prominent European companies spanning 14 countries and indices. Futures and options for single and trans-European indices are available on key benchmarks, […]

Junk bond arbitrage is a strategy in the fixed income market that exploits price discrepancies between high-yield bonds (also known as junk bonds) and other financial instruments. This strategy involves buying undervalued junk bonds and simultaneously hedging the credit risk by shorting equivalent instruments or using derivatives. The goal is to profit from the price […]

Gamma trading is a options trading strategy that’s used primarily by market makers and professional traders.  It involves managing the gamma of an options portfolio, which is the rate of change of the option’s delta with respect to the underlying asset’s price.   Key Takeaways – Long Gamma Trading Profit from Volatility or Directional Moves […]

Multi-leg options strategies involve using two or more options contracts to create a combined position to achieve specific risk-return profiles. These strategies can be employed to hedge risk, speculate on price movements, or take advantage of market inefficiencies. The primary objective is to manage risk, customize exposures, and perhaps leverage by simultaneously holding various positions […]

In quantitative finance and especially with respect to options pricing, Greek letters are used to relate the sensitivity of the option price to changes in the underlying parameters, such as: price (delta) rate of change of price (gamma) time (theta) volatility (vega), and interest rate (rho) They are often simply referred to as ‘the Greeks’ […]

eToro has teamed up with X, formerly Twitter, to deliver education from its Academy to the social media platform’s 500 million strong monthly users. This comes after 1.4 billion posts on X in 2023 were related to trading and investing, representing a 54% growth on the previous year. Key Takeaways The program will bring together […]

Post-Earnings Announcement Drift (PEAD) is a well-documented market anomaly where stock prices continue to drift in the direction of an earnings surprise for some time following the announcement. This provides traders with an opportunity to exploit the delayed response of the market to new earnings information. Like all strategies, it isn’t foolproof, and is just […]