What is Tracking Error? Tracking error is a measure of financial performance that determines the difference between the return fluctuations of an investment portfolio and the return fluctuations of a chosen benchmark. The return fluctuations are primarily measured by standard deviations. Generally, a benchmark is a diversified market index that represents part of the total…
What is Cross Border Listing? Cross border listing involves companies that trade on the stock exchange of their home country and also on a stock exchange in another country. A Cross Border Listing gives rise to the possibility of arbitrage opportunities, as identical assets are trading in two different markets. Cross border listed companies are…
What is a Japanese Candlestick? Japanese Candlesticks are a technical analysis tool that traders use to chart and analyze the price movement of securities. The concept of candlestick charting was developed by Munehisa Homma, a Japanese rice trader. During routine trading, Homma discovered that the rice market was influenced by the emotions of traders, while…
What is the Ichimoku Cloud? The Ichimoku Cloud is a technical analysis method that was created by Japanese journalist Goichi Hosoda in the late 1960s. The Ichimoku chart shows support and resistance levels, as well as other essential information such as trend direction and momentum. Compared to standard candlestick charts, the Ichimoku Cloud contains more…
What is an Investment Portfolio? An investment portfolio is a set of financial assets owned by an investor that may include bonds, stocks, currencies, cash and cash equivalents, and commodities. Further, it refers to a group of investments that an investor uses in order to earn a profit while making sure that capital or assets…
What is Chandelier Exit? Chandelier Exit (CE) is a volatility-based indicator that identifies stop loss exit points for long and short trading positions. Chuck Le Beau, a recognized expert in exit strategies, developed the CE indicator. However, Alexander Elder introduced the strategy to traders through his book “Come into My Trading Room,” which was published in 2002. Chandelier…
What is a Callable Bond? A callable bond (redeemable bond) is a type of bond that provides the issuer of the bond with the right, but not the obligation, to redeem the bond before its maturity date. The callable bond is a bond with an embedded call option. These bonds generally come with certain restrictions…
What is a Revenue Bond? A revenue bond is a type of municipal bond in which the repayment of the obligation is primarily guaranteed by the operating revenues of an entity. Revenue bonds are primarily utilized by government entities to subsidize infrastructure projects. The most common projects include the construction of airports, roads, bridges, and…
