The VIX is an index that measures the volatility of the S&P 500. It is often referred to as the “fear index” because it spikes when investors are worried about the stock market. The VIX is calculated by using options prices, which are a way to bet on future stock …

Machine learning is a subset of artificial intelligence that deals with the creation of algorithms that can learn from, and make predictions on, data. These algorithms are able to automatically improve given more data. Machine learning is a powerful tool that can be used for a variety of tasks, such …

The Fed, or Greenspan, put is a monetary policy tool used by the Federal Reserve to help stabilize the economy. The name comes from former Federal Reserve Chairman Alan Greenspan, who is credited with using the tool to help stave off a recession in the early 2000s. The Fed put …

The volatility term structure is the relationship between implied volatility and time to expiration. The term structure is important because it provides information about the market’s expectations for future volatility. For example, if the term structure is downward sloping, it means that the market is expecting implied volatility to decrease …

Pairs trading is a market-neutral trading strategy that involves buying and selling two stocks simultaneously. The idea behind pairs trading is to find two stocks that are in co-movement and to take advantage of the differential in their price movement. In order for pairs trading to be successful, you need …

An Exchange Traded Fund (ETF) is a fund that tracks an index, sector, or basket of assets just like a traditional mutual fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold. The ETF market has experienced massive …

VIX futures are a type of derivative that allow investors to bet on the future direction of the CBOE Volatility Index (VIX). The VIX is a measure of market uncertainty and is often referred to as the “fear index.” VIX futures allow investors to hedge against or speculate on future …

Beta is a measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM) to calculate the expected return of an investment. A stock with a beta greater than one is …

Cointegration is a statistical property of certain types of data that indicates a strong relationship between them. When two variables are cointegrated, it means that they move together over time and tend to return to the same level after periods of divergence. This makes them ideal candidates for pairs trading, …

A mutual fund is an investment vehicle that is made up of a pool of funds from many different investors. The money in the fund is then used to purchase a variety of different securities, such as stocks, bonds, and other assets. Mutual funds are a popular way for investors …