What is a Hedging Transaction? In finance, a hedging transaction is a strategic action that investors use to reduce the risk of losing money while executing their investing strategy. There are many types of hedging transactions, but they generally involve derivatives, such as options or futures contracts. They are frequently used for businesses looking to lower…
What is the Keltner Channel? Keltner Channel refers to a technical analysis indicator composed of three separate lines. It includes a central moving average line along with channel lines located above and below the central one. History of the Keltner Channel The Keltner Channel is named after American grain trader Chester W. Keltner, who described…
What is the Kelly Criterion? The Kelly Criterion is a mathematical formula for bet sizing, which is frequently used by investors to decide how much money they should allocate to each investment or bet through a predetermined fraction of assets. It is popular because it typically leads to higher wealth in the long run compared…
What is Hawala? Hawala, originating from an Arabic term for transfer or trust, is an informal method of transferring money without any money physically moving from one place to another. It is based on a system of money lenders known as hawaladars, which is generally used in the Middle East, Africa, and on the Indian subcontinent…
What is a Hard Fork? In blockchain technology that underpins cryptocurrencies, a hard fork or (hardfork) refers to a radical change to the protocols of a blockchain network. In simple terms, a hard fork splits a single cryptocurrency into two and can results in the validation of blocks and transactions that were previously invalid, or…
What is a High Beta Index? A high beta index refers to a market index made up of stocks with higher-than-average volatility compared to the overall stock market. Examples include the S&P 500 High Beta Index, the TSX Composite High Beta Index, the Hang Seng High Beta Index, and the S&P Emerging Markets High Beta…
What is Share of Wallet (SOW)? Share of Wallet (SOW) is a sales metric used by companies that retail goods or services indicating how much (on average) a consumer spends on a company’s product or service as compared to how much they spend on competing products or services. In other words, it indicates what percentage…
What is a Drawdown? A drawdown is an investment term that refers to the decline in value of a single investment or an investment portfolio from a relative peak value to a relative trough. It is an important risk factor for investors to consider, becoming more important in asset management in recent years. A drawdown…
What is Distribution Management? Distribution management is part of the supply chain process that ultimately delivers goods to end-users or consumers. Managing distribution is essentially managing the movement of goods, whether it be from a wholesaler to a retailer or from a retailer to a consumer. Distribution management focuses on the timely delivery of goods…
What is the Endowment Effect? The endowment effect is a principle in behavioral psychology that describes the tendency of people to value an object that they own higher than they would value if they didn’t own it. Their valuation of an owned object will often be higher than its true fair market value. The endowment…
