Vomma
What is Vomma? Vomma is an option Greek that represents the sensitivity of vega to the change of the implied volatility of an option. It is the second derivative of the option value to the volatility. Thus, it is also known as a second-order Greek. Other second-order Greeks include gamma, vanna, veta, and so on. Vomma...
Martingale Strategy
What is the Martingale Strategy? The Martingale Strategy involves doubling the trade size every time a loss is faced. A classic scenario for the strategy is to try and trade an outcome with a 50% probability of it occurring. The scenarios are also called zero expectation scenarios. For a situation with an equal probability, such...
Negative Return
What is a Negative Return? A negative return represents an economic loss incurred by an investment in a project, a business, a stock, or other financial instruments. As a result of an investment failure, a negative return happens when the total amount of money received over the investment horizon is less than the capital invested,...
Bullish Engulfing Candlestick
What is a Bullish Engulfing Candlestick? A bullish engulfing candlestick shows a pattern of trading prices for a particular security, indicating a reversal in price trends. A candlestick is a type of chart that represents the four important prices for intraday trading: opening, closing, day’s high and day’s low, for any security. Understanding Bullish Engulfing...
Dollarization
What is Dollarization? Dollarization is the process by which a country decides to use two currencies – the local currency and generally a stronger, more established currency like the US dollar. A dollarization process can either be partially or completely done. Many times, it is performed because residents no longer believe in the domestic currency...
