A bubble is an economic phenomenon characterized by the rapid and unsustainable rise in the price of an asset. The asset can be anything from a stock or commodity to a piece of real estate. A bubble is usually followed by a sharp and sudden drop in prices, known as a “crash.” Bubbles are often … Read more
The Euromarket is a market for Eurobonds and other Eurodenominated securities. Eurobonds are debt securities issued in a currency other than that of the issuer’s domestic market. The Euromarket is the largest and most important market for Eurobonds. It is also the market in which most Eurodenominated commercial paper is issued. Why is it called … Read more
Direct market access (DMA) is a service offered by some brokerages that allows investors to trade directly with market makers or exchanges. DMA can offer a number of advantages, including lower transaction costs, greater transparency, and faster execution. However, it can also be riskier than other types of trading, as it gives investors direct exposure … Read more
Reconstitution occurs when a company’s board of directors makes changes to the composition of its index, either by adding or removing component stocks. This usually happens in response to changes in the underlying market, such as mergers, acquisitions, or bankruptcies. What happens during Russell rebalancing? The Russell rebalancing is an annual event that takes place … Read more
A hedging transaction is an investment that is made in order to offset or protect against potential losses in another investment. In other words, a hedger is looking to reduce their risk in an investment by making another investment that will offset any potential losses. For example, let’s say that you are invested in a … Read more
The buy-side generally refers to the group of investors that purchase securities, typically through a broker, in order to hold them in their investment portfolios. These investors can be individuals, banks, insurance companies, mutual fund managers, or pension funds. The buy-side also includes the research analysts that work for these firms and provide recommendations to … Read more
A fast market is a market in which trading activity is high and prices are changing rapidly. A fast market can be caused by a number of factors, including a large number of trades taking place, a sudden increase in the amount of trading activity, or a change in market conditions. How do you avoid … Read more
In order to win in the auction market, one must be willing to put up a competitive bid. This means that one must be willing to outbid the other participants in the market in order to secure the desired asset. The auction market is a market where buyers and sellers come together to bid on … Read more
Examples and History. What Is a Black Swan in the Stock Market? Is the black swan event? A black swan event is a highly improbable or unpredictable event that has catastrophic consequences. Black swan events are often characterized by their extreme rarity, their massive impact, and their seemingly inexplicable nature. Is the Black Swan real? … Read more
What is a Market Index? A market index is a tool used to measure the performance of a stock market, or a specific sector of the market. Indexes are calculated by taking the average of the prices of the stocks in the index. There are many different types of indexes, each designed to measure different … Read more
