Employee stock options (ESOs) are a compensation tool offered by companies to their employees, granting them the right to purchase shares of the company’s stock at a predetermined price. ESOs serve as incentives for employees, aligning their interests with the company’s success and long-term growth. Typically, these options have a …

Volatility forecasting plays an important role in finance. Its importance lies in the fact that it enables us to effectively price options and plan trading and hedging activities. By providing insights into future market volatility, this forecasting becomes an essential tool for investors, enabling them to make informed decisions that …

The U.S. market is a vast and intricate financial landscape that can be dissected into several sectors, each representing a specific segment of the economy. These sectors are typically classified based on the type of goods or services they produce. Common sectors include Information Technology, Health Care, Financials, Consumer Discretionary, …

A startup is a fledgling company or entrepreneurial venture in its early stages of development, typically characterized by innovation, a focus on disruptive technology or business models, and the pursuit of rapid growth. Startups often face high levels of uncertainty and risk, seeking to fill a gap in the market …

Passive investing, particularly through Exchange-Traded Funds (ETFs), has transformed the world of finance. With ETFs, investors can gain exposure to various asset classes, including stocks, bonds, commodities, and more, while maintaining a passive and diversified approach to their portfolios. Unlike actively managed funds, which aim to outperform the market, passive …

In the journey of life and business, we often hear about the power of focus and concentration. But what if we told you that there is one number that stands as the most perilous, the one that can quietly sabotage your efforts, be it in your career or your entrepreneurial …

The covered call strategy is a popular and conservative options trading approach. It involves an investor holding a long position in an underlying asset, typically a stock, and then selling call options on that asset. These call options provide the buyer with the right to purchase the underlying asset at …

Credit indices are financial instruments used to gauge the overall creditworthiness and risk of a particular market or sector. These indices provide investors with a snapshot of credit risk within a specific market, allowing them to assess the health and stability of that market. There are two prevalent categories of …

Mean reversion in the financial market is a concept that suggests that asset prices tend to fluctuate around their long-term average or mean over time. When prices deviate significantly from this mean, they are expected to revert back to it. This phenomenon is often driven by market forces such as …

Dividends are a fundamental component of many investment strategies and a crucial aspect of equity ownership. They represent a portion of a company’s profits that is distributed to its shareholders, typically on a regular basis, such as quarterly or annually. Dividends are an input in the pricing model for equity …