Leveraged exchange-traded funds (ETFs) are investment vehicles that aim to provide amplified returns for a given index or benchmark. Leveraged ETFs use financial derivatives and debt to enhance their returns, which can be either two or three times the return of the underlying index, on a daily basis. This means …

Market timing refers to the practice of attempting to predict future market movements in order to buy or sell securities at the most advantageous times. Proponents of market timing believe that it can be a highly effective strategy for generating better risk-adjusted returns, as it allows investors to take advantage …

Social media influencers have become an increasingly important presence in the financial markets in recent years. These individuals have amassed large followings on platforms such as Reddit, Twitter, Instagram, and YouTube, and they use their influence to provide investment advice and insights to their followers. Some social media influencers specialize …

VIX ETPs, such as VXX, are exchange-traded products designed to track the performance of the CBOE Volatility Index (VIX). The VIX is a measure of the expected volatility of the S&P 500 index over the next 30 days, and it is often referred to as the “fear index” because it …

A stop-loss order is a type of order used in trading to limit an investor’s losses or to take a profit. It is an instruction to sell a security when it reaches a certain price level, known as the stop price. When the stop price is reached, the stop-loss order …

Out-of-sample testing is a critical component of designing and evaluating trading systems. Trading systems are often developed and optimized using historical data, which can lead to overfitting – a situation where the system is excessively tuned to past data, resulting in poor performance on new, unseen data. Out-of-sample testing involves …

In the financial industry, data plays a critical role in enabling managers to make informed decisions and manage risk effectively. Financial data can come from a wide range of sources, including economic indicators, company financial statements, market data, customer transaction histories, and social media sentiment. By analyzing this data, financial …

Artificial Intelligence (AI) and Machine Learning (ML) are two rapidly growing fields that have revolutionized the way we process and analyze data. AI refers to the development of computer systems that can perform tasks that typically require human intelligence, such as visual perception, speech recognition, decision-making, and natural language processing. …

In option pricing theory, the risk-neutral measure is a measure that allows for the valuation of financial instruments such as options. The risk-neutral measure is obtained by assuming that investors are indifferent to the risk and that the expected rate of return on all assets is equal to the risk-free …

Technical indicators are mathematical calculations based on the price, volume, or open interest of a security or index. They are used to help traders and investors analyze the behavior of securities in order to make informed investment decisions. Technical indicators are commonly used in technical analysis, which is a method …