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Trading Terms

Gamma Hedging

This technique involves the use of derivative instruments, such as options, to adjust the portfolio's exposure to changes in the underlying asset's volatility. It is a common practice among investors to manage risk and protect their investments.

Welcome, class. Today, we will be discussing an important concept in finance known as Gamma Hedging. This strategy is essential for managing risk and protecting investments in the ever-changing market.

Gamma Hedging is a technique that involves using derivative instruments, such as options, to adjust the portfolio's exposure to sudden and aggressive movements in the underlying security. This helps to eliminate the risk formed by these unpredictable fluctuations.

By utilizing Gamma Hedging, investors are able to control their exposure to changes in the underlying asset's volatility. This is crucial in maintaining a balanced and stable portfolio, especially in a volatile market.

It is important to note that Gamma Hedging is a common practice among investors, as it allows

Equilibrium Market

A price equilibrium refers to a specific price range in which the demand and supply of a particular product or service are in a state of balance. This means that at this pri...

When we talk about the market, we often refer to its overall trend, which can be depicted on a bar chart. This chart shows the performance of a particular market over a give...

In the world of finance, understanding the documentary credit process is crucial. As a knowledgeable professor, I will guide you through the steps. Typically, the buyer, als...

Foreign currency, also known as a foreign exchange or forex, refers to any currency that is used or traded outside the country of origin. This can include both physical curre...

Option sensitivity to changes in volatility is known as "vega." As volatility increases, the price of an option will also increase, making it more expensive to purchase. Thi...

The initial phase of a futures market, known as the opening period, is a crucial time when the price for each contract is determined through open outcry. This is a tradition...

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Stocks

All terms and concepts related to stocks, also known as equities, which represent ownership shares i

Retirement Planning

All terms and concepts related to the process of saving and investing to ensure financial security a

Trading Terms

Trading Terms encompass terminology and phrases commonly used in financial markets, including terms

Options and Futures

All terminologies and concepts related to financial derivatives, including options and futures contr

Property

The "Property" category in finance encompasses all aspects related to real estate and tangible asset

Credit Cards

All terms and concepts related to the use, features, and management of payment cards allowing users

Financial Terms

A comprehensive resource containing definitions and explanations of terms, concepts, and jargon used

Taxes

All terminology and concepts related to various tax types, tax laws, and taxation principles.

Corporate Actions

Terms related to decisions and events initiated by a company that can impact its stock, such as divi

Derivatives

All terms & concepts related to financial contracts whose value is based on an underlying asset,

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