| |
 |
Pair Trading |
| |
The strategy of matching
a long position with a short position in two stocks
of the same sector. This creates a hedge against
the sector and the overall market that the two stocks
are in. The hedge created
is essentially a bet that you are placing on the
two stocks; the stock you are long in versus the
stock you are short in. It's the ultimate strategy
for stock pickers, because stock picking is all
that counts. What the actual market does won't matter
(much). If the market or the sector moves in one
direction or the other, the gain on the long stock
is offset by a loss on the short. |
 |
 |
|
Percent Long |
| |
The percentage of a fund
invested in long positions. |
|
|
|
|
|
|
|
|
|
|
Percent Short |
| |
The percentage of a fund that is
sold short. |
| |
|
|
|
|
Performance Fee |
| |
The fee payable to the fund adviser
on new profits earned by the fund for the period. |
| |
|
|
|
|
Portfolio Turnover |
| |
The number of times an average
portfolio security is replaced during an accounting period,
usually a year. |
| |
|
|
|
|
Premium |
| |
1) The total cost of an option.
The premium of an option is basically the sum of the option's
intrinsic and
time value. It is important to note that volatility also
affects the premium.
|
| |
|
|
|
|
|
| |
2) The difference between the higher
price paid for a fixed-income security and the security's
face amount at issue. If a fixed-income security (bond)
is purchased at a premium, existing interest rates are
lower than the coupon rate. Investors pay a premium for
an investment that will return an amount greater than
existing interest rates. |
| |
|
|
|
|
