Stock Trading News

In quantitative finance, professionals often categorize models and methodologies into two main buckets: Q World and P World. These classifications represent two distinct approaches to quant modeling. They each have their own unique set of assumptions, objectives, and applications.   Q World vs. P World (Quant Modeling) The “Q World,” or “Risk-Neutral World,” uses adjusted […]

Hamada’s Equation is a financial tool that separates a company’s total risk into two distinct categories: business risk and financial risk. By understanding and analyzing these risks separately, investors and managers can make better-informed decisions. This equation also integrates elements from the famous Modigliani-Miller Theorem, providing a more comprehensive view of a firm’s risk profile. […]

3-asset and 4-asset portfolios can be used to simplify your approach. We look at various combinations to help you get an idea on how to structure such a portfolio. We are primarily focusing on risk-adjusted returns. While many may just want a stocks-heavy portfolio to try to maximize their returns, we take more of an […]

Elections can have significant power over financial markets, both immediately and over time. This sway is due to the potential economic consequences of the policy proposals from different candidates/parties and other factors we’ll cover. And financial markets and economies also have sway on election outcomes (i.e., an underperforming economy may increase the likelihood of a […]

In trading, there are countless variables that can impact the outcome of any trade, so intuition can be a reliable tool in many circumstances. For experienced traders, it can provide an intuitive edge – guiding them beyond data and analytics. But what really is intuition, and how does one use it in trading?   Key […]

We all know stories about Enron, Worldcom, Wirecard, and other large companies that, suffice to say, didn’t pan out for traders and investors betting on their success. They weren’t the first and won’t be the last large companies to fall. What happens to the broader market and economy in such circumstances? A stock that constitutes […]

Building trading and investing algorithms involves a blend of financial theory, mathematics, programming, and data analysis. These algorithms are designed to make trading decisions based on certain criteria, which can include any number of factors based on the underlying cause-effect relationships governing the decisions. Building trading and investing algorithms is a complex, iterative process that […]

In a separate article, we covered the current status of the basic reserves today; namely, the USD, EUR, JPY, GBP, CNY, and gold, as the main few. In this article, we’ll cover reserve currency history as well as reserve currency status, the benefits it brings, and how it’s lost. We are currently in a precarious […]

The non-linear relationship between losses and the gains required to recover those losses is an important concept in portfolio management. For example: A 10% loss requires an 11% gain to recover. A 20% loss requires a 25% gain to recover. A 50% loss requires a 100% gain to recover. Mathematically, if “L” is the loss […]

Auto-callables are complex savings instruments that offer a bond-like fixed return, crafted by selling stock options.   Key Takeaways – Auto-Callables Auto-callables are savings instruments that offer fixed returns similar to bonds, created by selling stock options, primarily on broad stock market indices. They attract investors with their potential for higher yields and early redemption […]