condition where spot prices exceed forward prices
A strategy is tested on historical data and then the strategy is applied to new data to see if the results are consistent.
difference between spot (cash) prices and the futures contract price.
measure for the yield on any security; one basis point equals 0.01% of
the yield. For example, if an interest rate or yield moves from 6% to 6
.25% it is said to rise by 25 basis points.
transactions made up of a number of different stocks.
period of declining market prices.
most commodities and financial instruments, the term refers to selling
the nearby contract month, and buying the deferred contract, to profit
from a change in the price relationship.
signal that suggests the rising trend of an index or stock has reversed
but the signal proves to be false.
measure of the market/non diversifiable risk associated with any given
security in the market. The higher the beta the greater the expected
volatility of a given stock relative to a specific movement in the
market, and vice versa. If a stock increased in value by 12% while the
market increased by 10%, the stock's beta would be 1.2. Other things
being equal a portfolio with a high beta would be expected to out
perform the market on the upside and under perform on the downside.
difference between the expected value of an estimator and the actual
value to be estimated.
expression indicating a desire to buy a commodity at a given price,
opposite of offer.
type of option that features a discontinuous pay-off.
Option Pricing Model
model developed to estimate the market value of option contracts.
transactions of a particular stock sold as a unit.
steep and rapid increase in price followed by a steep and rapid drop in
price. A blow-off is interpreted as an exhaustion move.
recorded securities that include each creditor's name, address, Social
Security or tax identification number, and dollar amount loaned, (I.e.,
no certificates are issued to bond holders, instead the transfer agent
electronically credits interest payments to each creditor's bank account
on a designated date).
Describes a variable that may have one of only two possible values: true or false.
gap develops on a chart when the trading range for one period exceeds
that of the previous chart leaving a gap or blank space in the chart. A
breakaway gap occurs when the gap is associated with a breakout of some
kind. Typically, such gaps appear at the completion of important chart
price move that takes a security beyond a specific measurable benchmark.
Examples would be a moving average crossover, trendline violation or
price pattern completion.
Broadening Formations with Flat Bottom
formed after the price makes a series of successively higher peaks (the
broadening part). The reactions are turned back at approximately the
same level (the flat part). Downside breakouts below the horizontal
level of support are often followed by sharp declines.
Formations with Flat Top
formed when a price makes a series of successive new lows (the
broadening part) but each rally is held back at approximately the same
level (the flat part). Upside breakouts that are accompanied by heavy
volume are often associated with very powerful moves.
company or individual that executes futures and options orders on behalf
of financial and commercial institutions and/or the general public.
period of rising market prices.
In most commodities and financial instruments, the term refers to buying the nearby month, and selling the deferred month, to profit from the change in the price relationship.
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