Investment Terms

Investment Terms

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Investment Terms episodes

  • Investment Term For The Day -Vega
    Vega is the measurement of an option's price sensitivity to changes in the volatility of the underlying asset. Vega represents the amount that an option contract's price changes in reaction to a 1% change in the implied volatility of the underlying asset.
    Volatility measures the amount and speed at which price moves up and down, and can be based on recent changes in price, historical price changes, and expected price moves in a trading instrument. Future-dated options have positive Vega while options that are expiring immediately have negative Vega.
    Option holders tend to assign greater premiums for options expiring in the future than to those which expire immediately.

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    2 min
  • Investment Term For The Day - Personal Consumption Expenditures
    The term personal consumption expenditures refer to a measure of imputed household expenditures defined for a period of time.
    Personal income and the PCE Price Index reading are released monthly in the Bureau of Economic Analysis, Personal Income and Outlays report. Personal consumption expenditures support the reporting of the PCE Price Index, which measures price changes in consumer goods and services exchanged in the U.S. economy.
    The PCE Price Index became the primary inflation index in 2012 used by the U.S. Federal Reserve when making monetary policy decisions.1 It is comparable to the Consumer Price Index which also focuses on consumer prices.
    Other measures of inflation also tracked by economists can include the Producer Price Index and the Gross Domestic Product Price Index.

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    2 min
  • Investment Term For The Day - The Global Strategic Petroleum Reserves
    The global strategic petroleum reserves are stockpiles of crude oil maintained by nations and by private industries as a hedge against potential future energy crises.
    The U.S. government has tapped its own Strategic petroleum reserve after a number of disasters that threatened to disrupt the flow of oil to industry and consumers.
    Global strategic petroleum reserves are maintained as a defense against any event that severely decreases or disrupts future oil production.
    These can include any physical or economic actions that disrupt any part of the production process, from exploration and development to refining.

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    2 min
  • Investment Term For The Day - No Surprises Act
    In the U.S, the No Surprises Act provides patients with protection from surprise medical bills under certain circumstances.
    It also mandates transparency regarding healthcare costs and holds patients liable for in-network cost-sharing amounts only.
    The U.S legislation allows healthcare providers and insurers to negotiate reimbursement separately while insulating the patient from that process.
    It also includes a provision for an independent dispute resolution process if necessary. The Departments of Health and Human Services, Treasury, and Labor are tasked with issuing regulations and guidance to implement the No Surprises Act, most of which is set to go into effect on Jan. 1, 2022

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    2 min
  • Investment Term For The Day - Short Selling
    Short selling is an investment or trading strategy that speculates on the decline in a stock or other security's price. It is an advanced strategy that should only be undertaken by experienced traders and investors.
    Traders may use short selling as speculation, and investors or portfolio managers may use it as a hedge against the downside risk of a long position in the same security or a related one.
    Speculation carries the possibility of substantial risk and is an advanced trading method. Hedging is a more common transaction involving placing an offsetting position to reduce risk exposure.

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    2 min
  • Investment Term For The Day - Limit Up
    In the trading world, Limit up is the maximum amount a price is permitted to increase during one trading day. The term is often used in relation to the commodities futures markets, where regulators seek to prevent volatility from reaching extreme levels.
    Limit down, by contrast, refers to the maximum permitted decline in one trading day.
    Both limit up and limit down prices are examples of circuit breakers—interventions employed by exchanges to help maintain orderly trading conditions.

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    2 min
  • Investment Term Of The Day - Dividend Aristocrat
    A dividend aristocrat is a company in the S&P 500 index that not only consistently pays a dividend to shareholders but annually increases the size of its payout.
    A company will be considered a dividend aristocrat if it raises its dividends consistently for at least the past 25 years. Some aficionados of dividend aristocrats rank them according to additional factors such as company size and liquidity, for instance having a market capitalization in excess of $3 billion.

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    2 min
  • Investment Term For The Day - Blue Chip Stock
    A blue-chip stock is a huge company with an excellent reputation.
    These are typically large, well-established, and financially sound companies that have operated for many years and that have dependable earnings, often paying dividends to investors.
    A blue-chip stock typically has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector, and is more often than not a household name.
    For all of these reasons, blue-chip stocks are among the most popular to buy among investors.

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    2 min
  • Investment Term For The Day - FTX Exchange
    FTX Exchange is a leading centralized cryptocurrency exchange specializing in derivatives and leveraged products.
    It was founded in 2018 by MIT graduate and former Jane Street Capital international exchange-traded funds trader Sam Bankman-Fried.
    FTX offers a range of trading products, including derivatives, options, volatility products, and leveraged tokens. It also provides spot markets in over 100 cryptocurrency trading pairs such as BTC/USDT, ETH/USDT, XRP/USDT, and its native token FTT/USDT.
    There is the Bahamas-based FTX and its FTX US affiliate which have overlapping management teams but separate capital structures.
    U.S. residents can only trade through FTX US.

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    2 min
  • Investment Term For The Day - Software-as-a-Service (SaaS)
    Software-as-a-Service (SaaS) is a software licensing model in which access to the software is provided on a subscription basis, with the software being located on external servers rather than on servers located in-house.
    Software-as-a-Service is typically accessed through a web browser, with users logging into the system using a username and password.
    The user is able to access the program via the internet instead of each user having to install the software on their computer.

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    3 min

About Investment Terms

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An audio glossary of investment terms for young people and intending investors.

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