Sharpe ratio
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A measure of how well a fund is rewarded for the risk it incurs.
The higher the ratio, the better the return per unit of risk taken. It
is calculated by subtracting the risk-free rate from the fund's annualized
average return, and dividing the result by the fund's annualized standard
deviation. A Sharpe ratio of 1:1 indicates that the rate of return is
proportional to the risk assumed in seeking that reward. Developed by
Prof. William R. Sharpe of Stanford University. Sharpe ratio
A measure of how well a fund is rewarded for the risk it incurs.
The higher the ratio, the better the return per unit of risk taken. It
is calculated by subtracting the risk-free rate from the fund's annualized
average return, and dividing the result by the fund's annualized standard
deviation. A Sharpe ratio of 1:1 indicates that the rate of return is
proportional to the risk assumed in seeking that reward. Developed by
Prof. William R. Sharpe of Stanford University.
Short-biased investment strategy
An approach that relies on short sales. Such funds tend to
hold larger short positions than long positions.
Soft dollars
Credits that can be used to pay for research and other services
that brokerage firms provide to hedge funds and other investor clients
in return for their business. Those credits are accumulated through soft-dollar
brokers, which channel trades to multiple securities brokers.
Sortino ratio
Also called the "upside potential ratio." Similar
to the Sharpe ratio, it was developed by the Pension Research Institute
to determine the amount of "good" volatility that a fund's investment
portfolio possesses -- that is, it seeks to define the amount by which
the investment pool's value may increase, based on expected pricing fluctuations.
Special situations investment strategy
An event-driven investment strategy in which the manager seeks
to take advantage of unique corporate situations that provides the potential
for investment gains.
Standard deviation
For an investment portfolio, it measures the variation of
returns around the portfolios mean-average return. In other words, it
expresses an investment's historical volatility. The further the variation
from the average return, the higher the standard deviation.
Statistical arbitrage investment strategy
A market-neutral investment strategy that seeks to simultaneously
profit and limit risk by exploiting pricing inefficiencies identified
by mathematical models. The strategy often involves short-term bets that
prices will trend toward their historical norms.
Top-down investment strategy
An approach that seeks to assess the influence of various
macro-and micro-economic factors before identifying individual investments.
Treynor ratio
A measure of the excess return per unit or
risk, where the excess return is defined as the difference between the
portfolio's return and the risk-free rate of return over the same
period.
U
Sorry, we currently do not have any words in our glossary beginning with the letter U.
Value investment strategy
An approach that involves purchases of stocks that the manager
deems to be priced below their intrinsic values, or are out of favor with
the market but are still fundamentally solid. Such funds typically employ
long-term holding periods and experience low volatility.
Venture capital
Money given to corporate start-ups and other new high-risk
enterprises by investors who seek above-average returns and are willing
to take illiquid positions.
Volatility
The likelihood that an instrument's value will change over
a given period of time, usually measured as beta.
Warrent Arbitrage
Developed as a result of the experience
gained whilst working and trading on the Japanese Warrants desk and
having fine-tuned the software for the Japanese market, other markets,
in particular the European markets, have been incorporated. The
application combines a blend of traditional option pricing calculators
together with practical fine tuning to identify warrant price anomalies
on a volatility basis, or where warrant prices have broken their
historic relationships with the underlying stock price.
At the heart of the system is empirical regression and volatility crossover analysis, providing real-time pricing and graphical capabilities to view particular issues, or the market by sector, maturity, SE or a combination (SE = stock price / exercise price). Other features include interactive Premium/SE and Implied Volatility/Historic Volatility graphics, what-if-scenarios and a variety of reports to track the warrant universe. Whilst the basis for creative warrant trading strategies, the system can dramatically enhance client comfort levels with graphical awareness of optimal warrant/stock purchases and by confirming fundamentals.
At the heart of the system is empirical regression and volatility crossover analysis, providing real-time pricing and graphical capabilities to view particular issues, or the market by sector, maturity, SE or a combination (SE = stock price / exercise price). Other features include interactive Premium/SE and Implied Volatility/Historic Volatility graphics, what-if-scenarios and a variety of reports to track the warrant universe. Whilst the basis for creative warrant trading strategies, the system can dramatically enhance client comfort levels with graphical awareness of optimal warrant/stock purchases and by confirming fundamentals.
Warrent Arbitrage
Developed as a result of the experience
gained whilst working and trading on the Japanese Warrants desk and
having fine-tuned the software for the Japanese market, other markets,
in particular the European markets, have been incorporated. The
application combines a blend of traditional option pricing calculators
together with practical fine tuning to identify warrant price anomalies
on a volatility basis, or where warrant prices have broken their
historic relationships with the underlying stock price.
At the heart of the system is empirical regression and volatility crossover analysis, providing real-time pricing and graphical capabilities to view particular issues, or the market by sector, maturity, SE or a combination (SE = stock price / exercise price). Other features include interactive Premium/SE and Implied Volatility/Historic Volatility graphics, what-if-scenarios and a variety of reports to track the warrant universe. Whilst the basis for creative warrant trading strategies, the system can dramatically enhance client comfort levels with graphical awareness of optimal warrant/stock purchases and by confirming fundamentals.
At the heart of the system is empirical regression and volatility crossover analysis, providing real-time pricing and graphical capabilities to view particular issues, or the market by sector, maturity, SE or a combination (SE = stock price / exercise price). Other features include interactive Premium/SE and Implied Volatility/Historic Volatility graphics, what-if-scenarios and a variety of reports to track the warrant universe. Whilst the basis for creative warrant trading strategies, the system can dramatically enhance client comfort levels with graphical awareness of optimal warrant/stock purchases and by confirming fundamentals.
X
Sorry, we currently do not have any words in our glossary beginning with the letter X. :)
Y
Sorry, we currently do not have any words in our glossary beginning with the letter Y.
Zero-Coupon Bond
A Zero coupon bond (also known as a discount bond) is a bond bought at a
price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic
interest payments, or so-called "coupons," hence the term zero-coupon bond. Investors earn interest via the
difference between the discounted price of the bond and its par (or redemption) value. Examples of zero-coupon
bonds include U.S. Treasury bills, U.S. savings bonds, and long-term zero-coupon bonds.In contrast, an investor
who has a regular bond receives income from coupon payments, which are usually made semi-annually.
The investor also receives the principal or face value of the investment when the bond matures.
Some zero coupon bonds are inflation indexed, so the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power rather than a set amount of money, but the majority of zero coupon bonds pay a set amount of money known as the face value of the bond. Zero coupon bonds may be long or short term investments. Long-term zero coupon maturity dates typically start at ten to fifteen years. The bonds can be held until maturity or sold on secondary bond markets. Short-term zero coupon bonds generally have maturities of less than one year and are called bills. The U.S. Treasury bill market is the most active and liquid debt market in the world.
Some zero coupon bonds are inflation indexed, so the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power rather than a set amount of money, but the majority of zero coupon bonds pay a set amount of money known as the face value of the bond. Zero coupon bonds may be long or short term investments. Long-term zero coupon maturity dates typically start at ten to fifteen years. The bonds can be held until maturity or sold on secondary bond markets. Short-term zero coupon bonds generally have maturities of less than one year and are called bills. The U.S. Treasury bill market is the most active and liquid debt market in the world.
Zero-Coupon Bond
A Zero coupon bond (also known as a discount bond) is a bond bought at a
price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic
interest payments, or so-called "coupons," hence the term zero-coupon bond. Investors earn interest via the
difference between the discounted price of the bond and its par (or redemption) value. Examples of zero-coupon
bonds include U.S. Treasury bills, U.S. savings bonds, and long-term zero-coupon bonds.In contrast, an investor
who has a regular bond receives income from coupon payments, which are usually made semi-annually.
The investor also receives the principal or face value of the investment when the bond matures.
Some zero coupon bonds are inflation indexed, so the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power rather than a set amount of money, but the majority of zero coupon bonds pay a set amount of money known as the face value of the bond. Zero coupon bonds may be long or short term investments. Long-term zero coupon maturity dates typically start at ten to fifteen years. The bonds can be held until maturity or sold on secondary bond markets. Short-term zero coupon bonds generally have maturities of less than one year and are called bills. The U.S. Treasury bill market is the most active and liquid debt market in the world.
Some zero coupon bonds are inflation indexed, so the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power rather than a set amount of money, but the majority of zero coupon bonds pay a set amount of money known as the face value of the bond. Zero coupon bonds may be long or short term investments. Long-term zero coupon maturity dates typically start at ten to fifteen years. The bonds can be held until maturity or sold on secondary bond markets. Short-term zero coupon bonds generally have maturities of less than one year and are called bills. The U.S. Treasury bill market is the most active and liquid debt market in the world.
