systematic risk
Risk which cannot be avoided however much one diversifies .
systematic risk
Risk which cannot be avoided however much one diversifies .
Definition
A trading strategy that seeks to create profits by holding positions for relatively short periods, often one day to one week. This is similar to day trading, but with a slightly longer time horizon.
Recession
A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP).
Recession is a normal (albeit unpleasant) part of the business cycle. A recession generally lasts from six to 18 months.
Interest rates usually fall in recessionary times to stimulate the economy by offering cheap rates at which to borrow money.
Range-Bound Trading
A trading strategy that identifies stocks trading in channels. By finding major support and resistance levels with technical analysis, a trend trader buys stocks at the lower level of support (bottom of the channel) and sells them near resistance (top of the channel).
The trader may repeat the process of buying at support and selling at resistance many times until the stock breaks out of the channel. The upper boundary of the channel is shown by a trendline that connects the points representing a stock’s highs over a given time period. The lower boundary of the channel is identified by connecting the points representing a stock’s lows. The downside of this strategy is that when a stock breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. If the breakout direction is not favorable for the trader’s position, he or she could lose badly.
rally
Definition
A substantial rise in the price of a security, commodity, or overall market, following a decline.
Quantitative Management
An approach to investment management that seeks to use statistical or numerical methods to create efficient portfolios, with the optimum risk/return trade-off. Quantitative managers generally attempt to add value by exploiting pricing anomalies, or by providing particular levels of risk control, rather than by subjective forecasting of market behaviour.
quick ratio
Syn: acid-test ratio: A ratio that gauges the liquidity of a company – it is equal to current assets minus inventory, over current liabilities
program trading
Sophisticated computerized trading strategy whereby a portfolio manager attempts to earn a satisfactory short-term return from the price spreads between a designated stock index and the price at which futures contracts on the index trade in financial futures markets are traded.
profit-taking
Action by short-term securities or commodities traders to cash in on gains earned on a sharp market rise. Profit taking pushes down prices, but only temporarily: the term implies an upward market trend.
portfolio
Combined holding of more than one stock, bond, commodity, cash equivalent, or other asset by an indidual or institutional investor.