Tag: hedge funds
Total Return Swaps are contracts between two parties in which a reference asset or group of assets is used to provide one party with regular interest payments, plus any capital gains (or losses) over the term of the contract. The other party benefits by receiving a set or variable rate of cash flow from the first party. Thus, a Total Return Swap enables one party to receive financial ...
There are two kinds of objectives in paying premiums for the flexibility to buy or to sell assets at fixed prices on pre-determined dates: one is to hedge on the average cost of a material used in a business over which a user company has no direct control, and the second is simply to gamble. Neither of these objectives is relevant for the average individual investor at the retail level in a ...
Program Trading – Program Trading is a practice by which computer programs are used to automate the purchase or sale of large blocks of stock when certain pre-set price points are reached. Popularly used by large hedge funds and arbitrage specialists, program trading has been blamed for causing the 1987 “Black Monday” stock market crash […]