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Debenture |
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A loan raised by a company,
paying a fixed rate of interest and secured on the
assets of the company. |
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Defensive Stock |
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A stock that tends to remain
stable under difficult economic conditions . Defensive
stocks include food, tobacco, oil, and utilities.
These stocks hold up in hard times because demand
does not decrease as dramatically as it may in other
sectors. Defensive stocks tend to lag behind the
rest of the market during economic expansion because
demand does not increase as dramatically in an upswing. |
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Delta |
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The rate at which the price of
an option changes in response to a move in the price of
the underlying security. If an option’s delta is
0.5 (out of a maximum of 1), a $2 move in the price of
the underlying will produce a $1 move in the option. |
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Delta Hedge |
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A hedging position that causes
a portfolio to be delta neutral. |
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Derivatives |
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Financial contracts whose value
is tied to an underlying asset. Derivatives include futures
and options. |
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Discount |
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When
a security is selling below its normal market price, opposite
of premium. |
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Distressed Securities |
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A distressed security is a security
of a company which is currently in default, bankruptcy,
financial distress or a turnaround situation. |
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Diversification |
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An investment strategy that involves
buying a variety of investment instruments that are not
highly correlated to each other in order to reduce the
risk of an overall portfolio. |
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