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Clear filtersConsumer Confidence and Sentiment
Surveys asking households how they feel about conditions and prospects. What people say and what they do have diverged substantially for long periods.
Fiscal Policy and Deficits
Spending and taxation decisions made by government rather than by a central bank. They affect growth directly and reach the bond market through issuance.
Other Central Banks
Policy is set in several places at once, and the differences between them drive currencies, capital flows and the conditions faced by companies operating across borders.
Diversification and Correlation
Diversification only works to the extent holdings move differently. Counting positions is not the measure; correlation is.
Expectancy and Win Rate
Win rate on its own says nothing. Expectancy combines it with the sizes of wins and losses to give the average result per trade, which is the number that decides everything.
Liquidity and Slippage
The gap between the price on the screen and the price actually filled. In thin securities it is frequently larger than the edge the strategy was pursuing.
The Real Cost of Trading
Commission is usually the smallest cost and the only visible one. The spread, the slippage and the tax treatment are larger and mostly invisible.
Scaling In and Out
Building or reducing a position in pieces rather than at once. It changes the distribution of outcomes and it is frequently confused with averaging down.
Portfolio Heat
The total amount at risk across every open position at once. Individually sensible positions can add to an exposure nobody chose.
Confirmation Bias
Seeking and believing evidence that supports a position already held. In markets it is amplified by the sheer volume of evidence available on every side.
Overtrading
Taking more positions than a method supports. Costs scale linearly with frequency while edge does not, so activity beyond a point is a direct transfer of capital to costs.
Process and Outcome
In any domain with substantial randomness, a good decision can produce a bad result and vice versa. Judging decisions by their outcomes teaches the wrong lesson at exactly the wrong moment.
Margin Mechanics and Margin Calls
Two separate requirements govern a margined position: what is needed to open it and what is needed to keep it. A call arrives when equity falls below the second.
Order Routing and Payment for Order Flow
An order does not go to an exchange because you sent it there. It goes wherever your broker routes it, and the routing decision has a disclosed economics behind it.
How Corporate Actions Reach Your Account
Splits, spin-offs, mergers and dividends are processed by the broker on dates set by the company. What arrives, and when, follows rules that are not always obvious.
Securities Lending
Shares held in a margin account can be lent to short sellers. The holder usually keeps the economics and loses some rights while the loan is outstanding.
Corporate Bonds
A loan to a company, with terms set out in an indenture. The yield compensates for the time and for the possibility that the company does not pay.
Credit Ratings
An opinion on the likelihood of repayment, expressed on a letter scale, produced by firms paid by the issuers they rate.
Credit Spreads
The extra yield over a government bond of the same maturity. It compensates for default risk and for liquidity, and it is one of the better-watched indicators of financial conditions.
Municipal Bonds
Debt issued by states, cities and their agencies. The interest is generally exempt from federal tax, which changes how the yield should be compared to anything else.
Inflation-Linked Bonds
Bonds whose principal adjusts with a price index. They pay a real yield, and the difference against a nominal bond is the market's inflation expectation.
Ladders, Barbells and Bullets
Three ways of arranging maturities across a bond portfolio, each with a different response to a change in the shape of the yield curve.
Bond Funds and Individual Bonds
An individual bond matures; a fund does not. That single difference produces most of the distinction between them, and it is smaller than it is usually made to sound.
What an Option Price Is Made Of
A premium splits into intrinsic value, which is arithmetic, and extrinsic value, which is entirely a function of time and expected movement.
Implied Volatility and the Expected Move
Option prices translate into a market expectation of how far a security will move. It is useful information even to someone who never trades an option.
Covered Calls
Selling a call against shares already held. The premium is received in exchange for capping the position's upside, which is a trade rather than a free income stream.
Protective Puts
Buying a put against shares held, which caps the loss below the strike. The protection is real and it is paid for, repeatedly.
Assignment and Exercise
Exercise is the holder's action; assignment is what happens to a seller. Both convert an option into a position in the underlying, sometimes unexpectedly.
Futures Contracts
A standardised agreement to transact at a set price on a future date. Unlike an option, both parties are obliged, and the exposure is the full contract value.
Platforms and Counterparty Risk
A balance shown on a platform is a claim on that platform. The distinction between a claim and a holding is the subject of most of the sector's failures.
Spot Crypto ETFs
An exchange-traded wrapper holding the asset itself, traded through an ordinary brokerage account. The wrapper changes the custody and the protections, not the underlying volatility.
Stablecoins
Tokens designed to hold a constant value against a currency. What they hold behind them, and who has a claim on it, differs enormously between them.
The Regulatory Position
Which regulator covers a digital asset depends on whether it is a security, and that question has been contested in litigation for years.
Choosing a Benchmark
A return means nothing on its own. What it is compared against determines whether it was good, and the comparison is frequently chosen to flatter.
Tracking Error
How far a portfolio's returns deviate from its benchmark, measured as a standard deviation. It quantifies how different a portfolio is, not how good.
Sharpe, Sortino and Risk-Adjusted Return
Return per unit of risk, where risk means the variability of returns. The measures are useful, widely quoted, and rest on assumptions that returns do not satisfy.
Home Bias
Investors everywhere hold far more of their own country's market than its share of the world would suggest. The pattern is universal, well documented, and only partly rational.
Concentration and Diversification
Diversification lowers the variability of an outcome and lowers the extremes in both directions. Which is preferable is a question about objectives rather than about markets.
Cost Basis Methods
When part of a position is sold, which shares were sold is a choice. The default is usually first-in first-out, and it is rarely a deliberate one.
Wash Sales
A loss is disallowed if a substantially identical security is bought within a window around the sale. The loss is not lost; it moves into the basis of the replacement.
Tax-Loss Harvesting
Realising a loss to offset a gain is a deferral rather than a saving, and the value of the deferral depends on the rate difference and on what is bought instead.
Required Minimum Distributions
Tax deferred is not tax forgiven. Traditional retirement accounts must begin distributing at a specified age, and the amount is set by a table rather than by choice.
K-1s and Partnership Structures
Some listed securities are partnerships rather than corporations. They report on a K-1 instead of a 1099, arrive late, and carry consequences that surprise holders.
Foreign Withholding on Dividends
A dividend from a foreign company is often taxed at source before it arrives. Whether any of it can be recovered depends on treaties and on the account it is held in.
State Considerations
Federal rules are only part of the picture. States tax investment income differently, and some securities are treated differently depending on where the holder lives.
Pump and Dump Schemes
Promotion of a thinly traded security by holders who intend to sell into the demand they create. The structural features are visible before the promotion arrives.
Promotion and Disclosure Rules
Anyone paid to promote a security must disclose it. The rule is old, it applies on social platforms, and the disclosure is usually present and unread.
Complaints, Arbitration and Recourse
Most brokerage disputes go to arbitration rather than to court, because the account agreement said so. Knowing the process before it is needed changes what evidence exists.