Stock Trading News

A 130/30 fund is an investment strategy that involves a hedge fund or mutual fund maintaining a long position in 130% of its portfolio, while also maintaining a short position in 30% of its portfolio. The long positions are invested in securities that the fund expects to appreciate in value, while the short positions are […]

China’s financial markets are of interest to many traders, both foreign and domestic. However, China carries with it its own set of challenges, which we lay out in this article.   1) Real estate bubble and resultant debt problems In China, real estate is 25% of economic activity and 70% of savings. So the effects […]

Liquid assets are those assets that can be easily converted into cash and are used to pay off short-term debts. Examples include cash, accounts receivable, marketable securities (e.g., bonds, stocks), etc. Conversely, private assets represent ownership of physical property or rights that cannot be readily converted into money without a certain process. These include equipment […]

Leading indicators are used to anticipate changes in the economy, labor markets, or financial markets and can be used to inform strategies for mitigating risks. They are often economic measures that change before the overall economy begins to shift. For example, a rise in housing starts is a leading indicator of increased economic activity, whereas […]

The endowment effect is a cognitive bias where one is inclined to value what they already own more than something they do not own. This bias was first identified in a study by Kahneman, Knetsch, and Thaler (1990) titled Experimental Tests of the Endowment Effect and the Coase Theorem. The study found that people placed […]

A bear trap in financial markets is when a security, or a market as a whole, experiences an extremely sharp decline but eventually reverses. Typically, these drops are sudden and steep, resulting in heavy losses for investors holding the affected assets. In some cases, bear traps can be caused by market speculation or news events […]

As interest rates rise, the value of call options increases and the value of put options decreases, holding all else equal. Below we explain why. Positive Rho for Calls; Negative Rho for Puts Call options have positive Rho, which means as interest rates increase, call options tend to increase slightly in price, all else held […]

What Is a Cash and Carry Trade Strategy? A cash and carry trade is a type of price arbitrage strategy in which an investor buys an asset and simultaneously sells a futures or derivatives contract for the same asset, or vice versa. The goal of this strategy is to profit from the difference between the […]

What Is A Martingale System in Financial Markets? A Martingale system is a type of investment or trading strategy that involves increasing the amount of money invested in an asset as the price of that asset goes down. The idea behind this strategy is that the increased investment will eventually pay off when the price […]

A hedge fund and venture capital firm are both investment vehicles that seek to grow investor capital. However, the strategies and objectives of each firm are distinct. In this article, we’ll explore these differences and the similarities that they sometimes have. Hedge Funds vs. Venture Capital Firms – Exploring the Differences Hedge funds are typically […]