Load Fund
What is a Load Fund? A load fund is a mutual fund that carries a commission to purchase or sell its shares. The load is calculated as a percentage of the amount that an investor purchases or sells. The investor pays the load, which is used to compensate a broker or investment advisor for their...
Rally
What is a Rally? A rally refers to a period of continuous increase in the prices of stocks, indexes or bonds. The word, rally, is typically used as a buzzword by business media outlets such as Bloomberg to describe a period of increasing prices. Learn more about bond trading with CFI’s Fixed Income Fundamentals Course. A...
Trade Order
What is a Trade Order? Placing a trade order seems intuitive – a “buy” button to initiate a trade and a “sell” button to close a trade. Although executing trades is possible in such a way, it is very inefficient as it requires constant monitoring of the stock. Using just the buy and sell buttons...
Probability of Default
What is Probability of Default? The probability of default (PD) is the probability of a borrower or debtor defaulting on loan repayments. Within financial markets, an asset’s probability of default is the probability that the asset yields no return to its holder over its lifetime and the asset price goes to zero. Investors use the...
Hedging
What is Hedging? Hedging is a financial strategy that should be understood and used by investors because of the advantages it offers. As an investment, it protects an individual’s finances from being exposed to a risky situation that may lead to loss of value. However, hedging doesn’t necessarily mean the investments won’t lose value. Rather,...
