Stock Trading News

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 […]

What Is False Diversification? False diversification is the state of having many positions in a portfolio but little actual diversification due to the high level of correlation between positions. Example of False Diversification Let’s say a trader is employing the following book: Long Brazilian Real vs US Dollar Long industrial commodities Long oil Short Treasuries […]

How to Tell if a Stock is Undervalued, Fully Valued, or Overvalued One of the most important things to know as a trader or investor is how to tell if a stock is undervalued, fully valued, or overvalued. The entire premise of a lot of investing is knowing value. Whether you’re buying a stock, a […]

Amazon’s Strengths, Weaknesses, Opportunities, and Threats Amazon is the undisputed leader of e-commerce, but that doesn’t mean it’s invulnerable. In order to maintain its position at the top, Amazon must carefully consider its strengths, weaknesses, opportunities, and threats (i.e., SWOT Analysis). Let’s take a closer look.   Amazon SWOT Analysis Strengths Diversified business model Outstanding […]

This article was published on November 3, 2022. Apple is one of the most popular and well-known technology companies in the world. Founded in 1976, Apple has since become a household name thanks to its innovative products and services. In recent years, however, Apple has come under increased pressure from competitors such as Samsung and […]