Variance Swap
What is a Variance Swap? Variance swap refers to an over-the-counter financial derivative that allows the holder to speculate on the future volatility of a given underlying asset. Holders use variance swaps to hedge their exposure to the magnitude of possible price movements of underliers, such as exchange rates, interest rates, or an equity index....
Basic Materials Sector
What is the Basic Materials Sector? The basic materials sector is made up of companies involved in the discovery, extraction, and processing of raw materials. It includes mining, forestry, and chemical production. Understanding Basic Materials Companies All physical goods are made up of a combination of basic materials processed to create a finished good. Basic...
Vanilla Option
What is a Vanilla Option? The term “vanilla option” refers to a type of financial instrument that enables its holders to either buy or sell an underlier, which is an underlying asset, at a predetermined rate within a given time limit. The holder owns the right to sale or purchase of the underlying asset, without...
North American Industry Classification System (NAICS)
What is the North American Industry Classification System (NAICS)? The North American Industry Classification System (NAICS) is a system that organizes and divides businesses into sectors, sub-sectors, and specific industries via a descriptive label and a grouping code of up to 6 digits. NAICS classifies by the similarity of production activity that an establishment carries...
Asset-Backed Commercial Paper (ABCP)
What is an Asset-Backed Commercial Paper (ABCP)? An asset-backed commercial paper (ABCP) is a type of commercial paper that is collateralized by financial assets. Commercial paper is a short-term monetary-market debt instrument with a maturity of no more than 270 days. It is usually issued by a large corporation or financial institution to pay for...
