A bear put spread is a restricted benefit, restricted danger choices exchanging system that can be utilized when the alternatives broker is reasonably bearish on the hidden security. It is a form of option strategy where an investor or trader expects the price of a security or asset to decrease m.....
A constant spread is an option-adjusted spread (OAS) that is applied to the prevailing interest rates to discount cash flows. It lets investors equate the cash flows of a fixed-income security to reference rates while also valuing embedded options against fluctuations in the general market. This .....
Option adjusted spread (OAS) is a flat spread that has to be applied to the treasury curve in order to make the potential interest rate derivative price equal to the market price by using dynamic pricing models that take embedded options into account. This definition can be extended to mortgage-b.....
An embedded option is a financial security provision (typically in bonds) that gives a certain right to an issuer or holder of a security, but not an obligation to take certain acts at some point in the future. It is an inseparable component of another defense, which as a stand-alone entity canno.....
A variable rate demand note (VRDN) is a drawn-out gliding rate instrument; it is an obligation instrument that addresses acquired subsidizes that are payable on interest and accumulate revenue dependent on a common currency market rate, for example, the excellent rate. The allocated interest rate.....
A registered representative (RR) is a person who works for a brokerage firm and acts as a representative for clients trading investment products such as stocks, bonds, and mutual funds. RR is often referred to as a general securities representative, stockbroker, or account manager. In the trading.....
The central limit theorem (CLT) in probability theory is a statistical principle that states that if the sample size is large enough, the sample means distribution of a random variable will assume a near-normal or normal distribution. The hypothesis is a critical idea in the likelihood hypothesis.....
Backward integration refers to the phase in which a corporation purchases or develops segments of the supply chain internally. Backward integration, in other words, is when a business buys another business that provides the goods or services needed for production. For example, a company might buy.....
A variable benefit plan is similar to a conventional DB plan (Defined Benefit Plan), except that the employers and not the sponsor of the plan on the investment risk and positive return. A variable benefit plan is, in reality, a type of pension plan in which the payment to which the beneficiary i.....
Cash earnings per share (cash EPS), more generally referred to as operating cash flow, is a profitability ratio that compares the cash flow of a company to the outstanding number of shares. It is exceptional from the more broadly utilized net benefit metric, earning per share (EPS), which just co.....
Share repurchase, also known as a share buyback or a stock buyback, is a process whereby a corporation buys back from the marketplace its own shares. It represents a more versatile way of returning capital to shareholders (relative to dividends). An alternative to cash dividends can be seen as a .....
When the buyers buy securities from the seller in return for cash and agree to reverse the deal on a given date, a repurchase agreement, also known as a repo, RP, or sale and repurchase agreement. It operates like a collateralized short-term loan, primarily for government securities. The seller o.....