What is Treasury stock? A company’s treasury stock is any shares that have been previously issued by the company that are now held by the company itself, usually through share buybacks on the open market or through a structured repurchase scheme. Treasury Stock Example Suppose that a new company creates and publicly issues 1,000 shares […]
Shareholders, also known as stakeholders, are any individual or institution that holds one or more shares in a company. Shareholders are the owners of the company for which they hold shares, and these shares confer certain rights and privileges to the shareholders, as well as a chance of return on equity. Example of Shareholders Suppose […]
A digital asset is any information that is stored digitally and has value. This can include, but is not limited to, videos, software, data and graphics. Issues surrounding the legality of the ownership and use of digital assets have grown exponentially alongside the importance of computing and the Internet. In the financial world, issues with […]
Diversification in finance describes the process where a portfolio of correlated assets is built in such a way that produces a better risk/return profile than would be achievable with only one asset or with a basket of unrelated assets. Diversification in Contemporary Finance The concept of diversification is based on modern portfolio theory, which is […]
Andrews’ Pitchfork is a technical indicator that is used to identify support and resistance levels during a medium to long term price trend that is either increasing or decreasing. Traders can use the trend-lines generated by the Andrews’ Pitchfork to make a variety of trades based on resistance and support from the upper and lower […]
Capitulation is a colloquial market term describing a pattern of strong selling, where powerful psychological and market forces have led to market participants liquidating their positions at any price. Capitulation is usually driven by a combination of fear-induced panic-selling and the forced selling of margin calls. Identifying Capitulation While there is no strict measure […]
Price rate of change, or ROC, is a technical indicator used to signal the momentum of a price’s current trajectory. Price rate of change comes from a class of technical indicators known as momentum oscillators, which are employed in a variety of ways in momentum or trend investing. The formula for calculating the price rate […]
Linear regression is a form of statistical analysis that attempts to identify a relationship between an independent variable and one or more dependent variables. Generally linear regression is aimed at causal relationships, where a change in the independent variable causes a predictable change in the dependent variable. Linear regression forms the basis of much of […]
Net income is a company’s earnings after all expenses are paid. Net income is more commonly known as ‘profit’, but ‘net income’ is the proper accounting term and the term that is used on a company’s financial statements. Net Income Example Suppose that a company has revenues of $100, production costs of $50, depreciation costs […]
Fixed income describes all the securities that are considered to be debt rather than equity. This means that fixed income securities provide no ownership of the issuing organization, but rather a right to a contracted payment structure for interest and principal payments, as well as collateral in the case of default and priority in the […]
