Gapping strategy is taking advantage of a time difference. An example is borrowing short to lend long because that gives a better interest rate return for the lender (in a normal market where short-term rates are lower than those in the longer term).This strategy gives the lender an overall better interest rate as short rates are generally lower than long rates. Also in … [Read more...]
Stock And Warrant Off-Balance Sheet R&D – SWORD
The SWORD i.e Stock And Warrant Off-Balance Sheet R&D is a separate entity that is connected and linked to the outside investors and the biotech company through several legal obligations. These kind of Investors usually lies in the category of institutional investors or wealthy individuals looking to capitalize on the latest technology. The investors are hoping to benefit … [Read more...]
Active Investing
Active investinginvestinginvesting is a strategy of buying and selling products in rapid succession in order to take advantage of temporary market conditions. Though the process can be highly profitable, it can also be highly risky. While many investors take a long-term approach to buying, this is not the case with activeactiveactive investinginvestinginvesting.Active investors … [Read more...]
SABR Model : The Stochastic Volatility Models
The SABR model is widely used by practitioners in the financial industry, especially in the interest rates derivatives markets. A suitable characteristic of any local and stochastic volatility model is that the model can yield the same prices of the vanilla options that were applied as inputs to the calibration of the model. failure to do so will clearly cause the model not … [Read more...]
Risk Neutral Measure : Stochastic Volatility Models
In mathematical finance, a risk-neutral measure,is a probability measure that results when one assumes that the current value of all financial assets is equal to the expected value of the future payoff of the asset discounted at the risk-free rate. The concept is used in the pricing of derivatives. It is important to note that clearly the probabilities over asset outcomes in … [Read more...]