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Feedback Effect in the Foreign Exchange Market

Posted on March 10, 2022 By 
The Black–Scholes-Merton model is the most frequently used option pricing model in the financial industry. However, it made use of assumptions that are not always realistic. A crucial assumption of the Black-Scholes-Merton model is a frictionless and elastic market. In other words, it assumes that there are no barriers to …
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Is Correlation Modeled Correctly?

Posted on March 7, 2022 By 
Volatility is a concept that is relatively well understood and used widely in the financial market. Correlation, on the other hand, is less understood. Nevertheless, it is used frequently in trading and portfolio management. Correlation between 2 assets is a measure that shows the strength of the relationship between them. …
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Do Retail Traders Have an Edge?

Posted on March 4, 2022 By 
In order to win in trading, one should have an edge, i.e. have a slight advantage over others. This means having information or strategies that the majority of other traders don’t have. There are a few different ways to get an edge in the trading world. One is by having …
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Technical Trading in the Foreign Exchange Market

Posted on March 1, 2022 By 
Technical trading is a method of analyzing securities by studying past price movements and trends. Based on this analysis, traders then make decisions about what trades to make. Technical traders use indicators to develop algorithmic trading systems. These trading systems are popular in the equity and commodity futures markets. Reference …
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Do Stop-Loss Orders Add Value?

Posted on February 23, 2022 By 
A stop-loss order is an order to buy or sell a security when the price reaches a certain level. A stop-loss order is designed to limit an investor’s losses on a position in a security. There are two main types of stop-loss orders: stop market orders and stop-limit orders. A …
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Historical Volatility-Online Calculator

Posted on February 22, 2022 By 
Historical volatility is a prevalent statistic used by options traders and financial risk managers. Historical volatility measures the past fluctuations in the price of an underlying asset. When there is a rise in historical volatility, a security’s price will also move more than normal. At this time, there is an …
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American Options Pricing Model-Online Calculator

Posted on February 19, 2022 By 
The binomial options pricing model is an option pricing approach used to price American-style options. An American option is a financial contract that can be exercised at any time up to and including on the expiration date. This contrasts with a European option, which can only be exercised on the …
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Performance of Momentum Funds

Posted on February 17, 2022 By 
Across several time frames and equity markets, momentum trading strategies that involve buying past winners and selling past losers have produced considerable gains. In recent years, asset management firms have offered investment vehicles that provide investors with easy access to momentum strategies. The number of funds and the asset under …
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