What is Relative Price Strength (RPS)? Relative price strength (RPS), also known as relative strength, is the ratio between the price trend of a stock price compared to the price trend of the market. RPS is commonly used in technical analysis and is not to be confused with relative price index. Formula for Relative Price…
What is Implied Volatility (IV)? Implied volatility (IV) uses the price of an option to calculate what the market is saying about the future volatility of the option’s underlying stock. IV is one of six factors used in options pricing models; however, it can’t be calculated unless the remaining five factors are already known. Ultimately,…
What is a Margin Call? A margin call occurs when the value of a margin account falls below the account’s maintenance margin requirement. It is a demand by a brokerage firm to bring the margin account’s balance up to the minimum maintenance margin requirement. To satisfy a margin call, the investor of the margin account…
What is Spread Trading? Spread trading – also known as relative value trading – is a method of trading that involves an investor simultaneously buying one security and selling a related security. The securities being bought and sold, often referred to as “legs,” are typically executed with futures contracts or options, though there are other…
What is the LEN Function? The LEN Function is categorized under Excel TEXT functions. The function will return the length of a given text string. In financial analysis, the LEN function can be useful if we wish to get the length of a given text string as the number of characters. LEN will also count characters…
What is the YEAR Function? The YEAR Function is an Excel Date/Time function that is used for calculating the year number from a given date. The function will return an integer that is a four-digit year corresponding to a specified date. For example, if we use this function on a date such as 12/12/2017, it…
What is the SEARCH Function? The SEARCH Function is categorized under Excel TEXT functions. SEARCH will return the position of a specified character or sub-string within a supplied text string. In financial analysis, the SEARCH function can be useful if we wish to find the location of a text in a string. For example, we can…
How to Alternate Row Color in Excel? To alternate row color in excel, you can do so by applying conditional formatting, with a combination of functions. The ROW Function is an Excel TEXT function, that will return the first row within a given reference or the number of the current row. If you combine the ROW with…
What is the MAXA Function? The MAXA Function is categorized under Excel Statistical functions. MAXA will return the largest value in a given list of arguments. From a given set of numeric values, it will return the largest value. The function compares numbers, text, and logical values as TRUE or FALSE. In financial modeling, the…
What is the MAX Function? The MAX Function is categorized under Excel Statistical functions. MAX will return the largest value in a given list of arguments. From a given set of numeric values, it will return the highest value. Unlike MAXA function, the MAX function will count numbers but ignore empty cells, text, the logical…
