The McGinley Dynamic Indicator is a moving average-based technical indicator that is designed to address the shortcomings of traditional moving averages. The indicator was developed by John R. McGinley in the early 1990s. Traditional moving averages are based on a simple concept: they take the average price of a security over a given period of … Read more
Money Market Funds: An Overview Do money market mutual funds pay interest or dividends? Money market mutual funds pay dividends, which are distributions of the fund’s earnings. The dividends are typically paid out on a quarterly basis, but some money market mutual funds pay dividends monthly or even daily. How do mutual funds work? A … Read more
The rounding error definition is the error that occurs when a value is rounded off to a certain number of decimal places. This can happen when calculating interest, tax, or any other value that is rounded off to a certain number of decimal places. The error occurs because the value is not exact, and the … Read more
Profit Definition: Gross, Operating, and Net Profit Explained What is the relationship between gross profit and operating profit? Operating profit is a company’s total revenue minus its operating expenses, which include things like cost of goods sold, wages, raw materials, and other associated costs. Gross profit, on the other hand, is a company’s total revenue … Read more
A desk trader is a Wall Street professional who buys and sells securities for their firm’s clients. Desk traders typically work for broker-dealers, investment banks, or large institutional investors. They execute trades based on their firm’s buy and sell orders, and they may also trade for their own account. Desk traders must be licensed by … Read more
A leg strategy is an options trading strategy that involves buying and selling options contracts in order to profit from a move in the underlying asset. The strategy gets its name from the fact that it involves buying and selling options in different expiration months (i.e., buying a March call and selling a April call). … Read more
The risk curve definition is a tool used by portfolio managers to help them understand and quantify the risk of their portfolios. The risk curve is a graphical representation of the risk of a portfolio, and can be used to help assess the risk/return trade-off of a portfolio. The risk curve is created by plotting … Read more
A sight draft is a type of draft that is payable as soon as it is presented to the drawee. This means that the drawee must pay the amount of the draft on the spot, or within a very short period of time. Sight drafts are often used in international trade, where one party may … Read more
A common size income statement is an income statement in which each line item is expressed as a percentage of revenue. This makes it easier to compare companies of different sizes, or to compare a company’s performance over time. For example, if Company A has revenue of $100,000 and net income of $10,000, its net … Read more
A Chartered Financial Analyst (CFA) is a professional designation given by the CFA Institute, an international organization of financial analysts. The CFA designation is considered the gold standard for financial analysts and is widely recognized by employers in the financial industry. To earn the CFA designation, candidates must pass three exams, each covering a different … Read more
