What is a Hard-to-Borrow List? A hard-to-borrow list refers to a list – i.e., an inventory record – of securities that brokerage firms are reluctant or cannot allow their clients to borrow for the purpose of short selling. Its purpose is to make transparent their list of the stocks that are “hard to borrow,” i.e.,…
What is the Equity Premium Puzzle (EPP)? The Equity Premium Puzzle (EPP) refers to the fact that stocks have outperformed Treasury bonds by an extraordinarily high margin over the last century – a margin so high that it is very difficult to explain regardless of how thoroughly the situation is analyzed. EPP is one of…
What is a Falling Knife? A falling knife is a term used when a security, such as a stock, quickly drops in price. During such instances, investors are recommended to wait for the security to reach its lowest point before buying back in. Despite the events of a falling knife, many equities are capable of…
What is the Fear and Greed Index? The Fear and Greed Index, developed by CNNMoney, is used to gauge whether investors are too bullish or bearish on the stock market. The index ranges from 0 (extreme fear) to 100 (extreme greed). Understanding the Fear and Greed Index In theory, the Fear and Greed Index acts…
What is a Financial System? A financial system is a network of financial institutions – such as insurance companies, stock exchanges, and investment banks – that work together to exchange and transfer capital from one place to another. Through the financial system, investors receive capital to fund projects and receive a return on their investments….
What is an Elective-Deferral Contribution? An elective-deferral contribution is an employee-authorized contribution made from an employee’s salary account to an employer-sponsored retirement plan. The employee needs to provide consent to the employer to deduct contributions. The funds contributed to retirement plans, including 401(k) and 403(b). Elective deferral contributions are a popular way to save for…
What is a Japan ETF? A Japan ETF is an exchange-traded fund that baskets a number of equities that are exposed to Japan’s economic growth and profits. Equities include major corporations such as Honda Motor Co. and Sony Corp. Therefore, Japan ETFs offer investors the opportunity to be exposed to Japan-based businesses, along with many…
What is the Double Exponential Moving Average (DEMA)? Double exponential moving averages (DEMA) are an improvement over Exponential Moving Average (EMA) because they allocate more weight to recent data points. The reduced lag results in a more responsive moving average, which helps short-term traders spot trend reversals quickly. Let us look at Apple Inc.’s prices…
What is Estimated Ultimate Recovery (EUR)? Estimated Ultimate Recovery (EUR) is a term specifically used in the oil and gas industry. It is the estimate of the total quantity of oil and/or gas that can ultimately be recovered from an oil reserve or a field. Simply put, it is the estimated quantity of expected total production…
What is the Accumulation/Distribution Indicator (A/D)? The accumulation distribution indicator (AD) or accumulation distribution line is a volume-based indicator used to determine the trend of a stock, using the relation between the stock’s price and volume flow. The term “accumulation” denotes the level of buying (demand), and “distribution” denotes the level of selling (supply) of…
