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Is the Bubble of Commodities Going Down?
It can be said that commodity bubble already went down. The prices of the most commodities have slumped significantly during several last months. But was there really a bubble? Yes, the prices have
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Derivatives
Derivative Financial Instruments Derivatives are so called because they are constructed from other traditional securities, and operate the rights to them. Apart from the fact that there are some basic derivative instrum
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Investment in Futures
Futures - derivative financial instruments, which can help to acquire some object in the future with pre-agreed price.In the case of futures, the seller undertakes to sell the object, while the buyer to purchase
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Investment in Forwards
Forwards – derivative financial instruments almost identical to the future contracts. This contract represents the parties committed to sell and buy the object at the predetermined time and price.Difference between
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Investment in Options
Options are very known derivatives and especially popular among investing speculators. Options has some attraction: every successful prediction can grow up invested amount a lot of times very quickly and potentia
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Investment in Swaps
Swaps - an investment tool used rarely at investing process. Typically, these contracts are used by financial institutions or other big companies in order to exchange cash flows in different currencies. In fact,
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Investment in Actively-Managed Funds
Active Mutual (Investment) Funds Actively managed investment funds usually are those mutual funds that choose not copy the index (benchmark), but is trying to beat it, so could give for investing person a higher return,
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Investment in Ultra Short ETF
Investment in Ultra Short ETFs combines characteristics of both: Ultra ETF’s and Short ETF’s. The value of Ultra Short ETF changes twice in opposite direction to the value of index which is followed b
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Investment Industry
An investment industry is a part of whole financial industry of the world. Finance sector includes not only investment industry but also other financial services: corporate finance, public finance, insurance
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Derivative Market
A derivative market is a totality of derivatives (futures, forwards, options, swaps and other) that have been created over the world. Some of the derivatives are standardized and are traded on Exchanges whil
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FOREX Market
FOREX market (foreign exchange market) is a global network of trading in different currencies. It is the most liquid financial market with huge turnovers continuously without breaks. Lot commercial banks, central
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Derivatives
Derivatives are securities (financial instruments) that are created by financial intermediaries synthetically, and are based on price or value of some primer assets or indicator. Usually such underlying assets ar
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Institutional Investment
Institutional investment is an investment that is made by an organization/institution. Usually, institutional investments are large scale and has important role in financial markets. Most institutional investment
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Institutional Investor
An institutional investor is an investor that is a corporation/institution. Institutional investors have high impact to investment markets and sometimes decisions of most known institutional investment manag
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hedge (hedging)
hedge (hedging) is protection of investment portfolio against fluctuations using financial instruments. hedge is very popular at investment theory, but not so popular at investment practice. In theory everything
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Investment Bank
An investment bank is a financial institution that has a license of bank and specializes exclusively on investment services. In the USA investment banking services was separated from other banking activity u
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Financial Intermediary
A financial intermediary is a financial institution that works in a financial market connecting money owners (savers) and credit seekers (borrowers). Of course, financial intermediaries are active not only i
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Financial Leverage
A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca
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Investment Management Fees
Investment management fees (fees that are paid straight to investment manager) basically are one of these types: Performance based fee. Performance based fee is calculated according to increase of inve
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Investment Risk Management
There are several main methods of investment risk management: Diversification. Diversification is the easiest and most of the times the cheapest way to reduce risk level of the investment portfol
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Quantitative Investment Management
Quantitative investment management says, “Don’t worry about investment management, and let to do the job for the computer”. It is a completely different approach compared to ‘value d
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hedge Funds
hedge funds are investment funds that use financial leverage and derivatives to achieve better investment results. The name of hedge fund came from hedging, which originally is a defensive investment strategy, bu
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Fund Manager
A fund manager is an employee of investment management company which is responsible for the management of the fund’s assets. Most of the times, more than one person is involved in fund’s management bu
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Stock Option
A stock option is derivative financial instrument that gives the holder of the option the right to buy some particular stock at the predetermined strike price till the end of the option (or at the end, depending
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Index Options
Index options are derivative financial instruments that provide for the buyer of the option the right (possibility) to make profits from index value changes. It may be a good investing instrument for the investor
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High Return Investments
High-return investments (or high-yield investments) are investments that can provide the higher return than average investments, and of course such investments are riskier. The reality is that people have differe
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Stock Trader
A stock trader is a speculator that is trying to make profits from quick changes in value of stocks or other securities that he trades. Stock trader have few differences from normal investor and the main differen
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Stocks and Commodities
You may ask how stocks and commodities related are. And the answer is simple: everything is related and especially in financial markets. Normally, if some of the main asset class (as stocks) looses or gains
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Leverage
Leverage definition In finance leverage means usage of debt capital in addition to the equity capital in order to increase the profit. Increase in leverage is understood as increase in riskiness and volatility.
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