- Industry: Financial services
- Number of terms: 73910
- Number of blossaries: 1
- Company Profile:
World's leading financial information-service, news, and media company.
Uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk.
Industry:Financial services
Applies to derivative products. Group of stocks that is formed with the intention of either being bought or sold all at once, usually to perform index arbitrage or a hedging program.
Industry:Financial services
Packages that involve the exchange of more than two currencies against a base currency at expiration. The basket option buyer purchases the right, but not the obligation, to receive designated currencies in exchange for a base currency, either at the prevailing foreign exchange market rate or at a prearranged rate of exchange. Multinational corporations with multicurrency cash flows frequently use basket options because it is generally cheaper to buy an option on a basket of currencies than to buy individual options on each of the currencies that make up the basket.
Industry:Financial services
An investor who believes a stock or the overall market will decline. A bear market is a prolonged period of falling stock prices, usually by 20% or more. Related: bull.
Industry:Financial services
Often used in risk arbitrage. Hostile takeover attempt in which the acquirer offers an exceptionally large premium over the market value of the acquiree's share so as to as to squeeze (hug) the target into acceptance.
Industry:Financial services
Any market in which prices exhibit a declining trend. For a prolonged period, usually falling by 20% or more.
Industry:Financial services
In the context of general equities, attempt by investors to move the price of a stock opportunistically by selling large numbers of shares short. The investors pocket the difference between the initial price and the new, lower price after this maneuver. This technique is illegal under SEC rules, which stipulate that every short sale must be on an uptick.
Industry:Financial services
Applies to derivative products. Strategy in the options market designed to take advantage of a fall in the price of a security or commodity, usually executed by buying a combination of calls and puts on the same security at different strike prices in order to profit as the security's price falls.
Industry:Financial services
The predicament facing short sellers when a bear market reverses its trend and becomes bullish. The assets continue to sell in anticipation of further declines in price, and short sellers then are forced to cover at higher prices.
Industry:Financial services
