Hard-to-Borrow List
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.,...
Equity Premium Puzzle (EPP)
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...
Falling Knife
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...
Fear and Greed Index
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...
Financial System
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....
