My two investment rules: Rule one, never lose money. Rule number two, never forget rule one. – Warren Buffett Buffet, who started to earn money at a very young age by following his father’s footsteps, was born in 1930. The future of this rich man, whose father was also a stockbroker, was actually clear from […]

Market Order A market order represents the most basic type of a trade order and implies buying or selling a security at the current price. Securities are bought at the ASK price and sold at the BID price. If the trader needs to get into or out of a trade, a market order is the most reliable […]

After the Word War II as part of the framework of the Marshall Plan to rebuild the Western Europe the Organization for European Economic Co-operation (OEEC) was established in 1948. Headquartered in the Chateau de la Muette in Paris, it aimed to coordinate and supervise the aid mainly from the US. It was comprised of 18 members. […]

Morgan Stanley Capital International (MSCI) indexes are one of the most globally followed benchmarks of the stock markets. They include more than 80 countries from developed, emerging and frontier markets, covering 99% of investable opportunities. Indexes are weighted by market cap and created following the Global Industry Classification Standard (GICS). Created in 1968 it represents […]

Purchasing Managers Index (PMI) is the leading indicator of the economic growth and directions of the economic trends. It is derived from the survey of private businesses in specific sectors. The index is published monthly and observed by various market participants. The Institute for Supply Management (ISM) publishes the indexes for the US, interviewing 400 companies in […]

Risk reversal is an options trading strategy used to hedge risk. The strategy protects against adverse movements but at the same time limits potential profit. A trader buys one option and other write depending on a position in underlying. Income from the written option can outweigh the premium paid for buying one. Long risk reversal […]

The Relative Strength Index was developed by J. Welles Wilder Jr. and introduced in his book, New Concepts in Technical Trading Systems in 1978. He described and interpreted the indicator and later the work of Brown and Cardwell developed new interpretations and concepts using the RSI indicator. Even dating back to 1978 the indicator proved […]

In the aftermath of the Great 1929 stock market crash, the US government passed the Securities Act of 1933 and the Securities Exchange Act of 1934, which created the Security and Exchange Commission (SEC) with the aim to restore investor confidence in the capital markets. The SEC mission is to protect investors, to maintain fair […]

Contractionary monetary policy is the set of policies conducted by central banks aiming to curb inflation and slow overheated economic growth. Through its instruments the central bank tries to halt the overall rise of prices in the economy and decrease the supply of money. It restricts or tightens the access to money making it too […]

VIX index was created by Chicago Board Options Exchange (CBOE) in order to provide a measure of stock markets expected volatility in 30-day period. It is also known as fear index or fear gauge. It is calculated using implied volatility of SP500 options. Thus, the index is forward looking as it measures expected volatility in […]