The National Association of Securities Dealers, or NASD, was the regulatory agency charged with overseeing the operation of the NASDAQ stock exchange and various over-the-counter (OTC) markets. The National Association of Securities Dealers also oversaw the examination and licensing of various investing professionals, such as the series 7 exam. In 2007 the National Association of […]
A stockbroker is a licensed financial professional who executes securities trades, primarily equities, on behalf of clients for a fee or a commission. Stockbroker Education While there are no strict educational requirements for stockbrokers, most stockbrokers tend to have at least a bachelor’s degree in finance or business administration. Stockbrokers are expected to have knowledge […]
The term out of the money refers to a strike price on a vanilla equity option that is above the current market price for the underlying stock in the case of a call option and below in the case of a put option. Out of the money options have no intrinsic value, as they are […]
A fiduciary is a person or organization that owes a client or customer a duty of trust when dealing with their financials. A fiduciary’s duty to their client is a legal and ethical requirement to act in the best interest of their client when making decisions or offering advice on their behalf. While a fiduciary […]
Modern portfolio theory is a financial theory that describes how investors can construct a portfolio of assets that maximizes the expected return for any given level of risk or minimizes the level of risk for any given rate of expected return. Modern Portfolio Theory Basics Modern portfolio theory is based on a few foundational ideas […]
A red herring is a preliminary report associated with an upcoming initial public offering (IPO) that is filed with the SEC. The report contains important details about the business, but does not contain specific details about the IPO itself, such as proposed share price and number of shares for sale. Red Herrings and the IPO […]
The Sharpe Ratio is an asset’s average excess rate of return above the risk-free return rate per unit of volatility. The risk-free rate of return is the rate of return on an investment that is considered to be ‘risk-free’, for which the rate of return on U.S. Treasury bills is used. Therefore, any return on […]
A financial advisor is any professional who provides products or services to clients concerning investments, taxes, properties and estate planning. Most financial advisors focus on a specific area of advisory services, though some do offer comprehensive services or are members of a firm that provides comprehensive services collectively. Examples of Financial Advisors Some common examples […]
An underwriter is a financial intermediary that takes on some of the risk of another financial actor for a commission, fee, interest payment, spread or some other special privilege. Underwriters are prevalent in a wide variety of financial sectors, primarily insurance, equities, mortgages and credit securities. The Role of the Underwriter Underwriters are essentially the […]
Blockchain is the technology that underpins the operation of all cryptocurrencies, as well as a variety of other cryptographic processes. Blockchain works as a distributed ledger system that is generated independently by a number of uncoordinated participants, which means that no one individual or organization can tamper with the generation of the distributed ledger. Blockchain […]
