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Trading Terms

Haircut

This is a crucial concept to understand when dealing with securities, such as stocks, bonds, and derivatives. A higher haircut means a larger difference between the market value and loan amount, making it riskier for the lender. It is a way for lenders to protect themselves from potential losses and is often determined by the creditworthiness of the borrower.

Welcome to today's lesson on finance terminology. Today, we will be discussing the concept of a Haircut in the financial world. This term refers to the difference between an asset's market value and the loan amount. It is an important concept to grasp when dealing with securities like stocks, bonds, and derivatives. A higher haircut indicates a greater risk for the lender as there is a larger difference between the market value and loan amount. Lenders use haircuts as a way to safeguard themselves from potential losses, and the amount is typically influenced by the borrower's creditworthiness.

Electronic Communications Network

Brokerage firms often establish independent execution systems that match retail limit orders with existing compatible orders. This allows for more efficient and timely execu...

In the world of finance, there is a specialized service known as export factoring. This involves providing a cash advance to businesses that have accounts receivable from th...

Return on Assets

Return on assets is often used as a measure of profitability. Return on assets, or ROA, is a financial metric that evaluates a company's profitability by calculating its ne...

Triangular Moving Average

A valuable tool in finance, the weighted moving average assigns a gradually increasing weight to each day's data until it reaches a peak value. From there, the weight decrea...

Short (oversold) position

A term commonly used in finance is "short" which refers to the excess of sales over purchases or of foreign currency assets over liabilities. It is the opposite of "long" or...

Early morning trading involves buying a large quantity of stocks in a company at the beginning of the trading day. This is known as "opening the market" and can potentially ...

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Mutual Funds

All terms and concepts related to mutual funds, which are investment vehicles that pool funds from m

Bank Deposits

All terms and concepts related to the placement of money in a bank account, including savings accoun

Credit Cards

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

Property

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

Insurance

All terms and concepts related to insurance, which is a financial arrangement that provides protecti

Stocks

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

Loans

All terms and concepts related to borrowing money, including different types of loans, interest rate

Derivatives

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

Gold

All terms and concepts related to the precious metal gold, including its price, trading, investment,

Fixed Income Instruments

All terms related to investments like bonds or treasury bills that provide regular, fixed payments,

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