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What is moral hazard? When a banker decides to lend money, he does not always know how the money will be used, but he will set an interest rate. The client is often the only one who knows how this money will be used, but having obtained a fixed rate with repayments fixed to start […]

What is an efficient market? The efficient-market hypothesis was developed by Eugene Fama between the 1950s and 1960s. This hypothesis assumes that when a market is sufficiently developed, and that the information in that market is known by all the players, who are all rational, it will react almost instantly and properly. Interpretation of the […]

What is a portfolio manager? Portfolio managers work for investors who entrust them with funds to invest on the financial markets. They make investment decisions concerning the allocation of funds within the portfolio. To do this they must analyse the macro-economic, fundamental and quantitative aspects of the assets so they can choose which ones to […]

What is a seller on the financial markets? Sellers on the financial markets, are intermediaries between traders and their clients. Sellers work together with market maker traders and are responsible for client relationships. Sellers on financial markets are the ones who really know the clients, their needs, their resources, etc. Specifically, when clients call to […]

What is Marxism? Exploitation exists because of capitalistic profit because it imposes profit. To explain the market Marx argued that each commodity had 2 final values. Firstly the use value that corresponds to the value of the product’s utility, that is to say the use that is made of this product. Secondly is the exchange […]

What does it mean to be a bear? Being a bear on the financial markets means selling shares that you don’t have and buying them back later at a lower price. This technique is also called short selling or shorting. This imagery is used because when bears attack the movement is from a high position […]

What is a quantitative analyst? Quants or quantitative analysts are math addicts who do "tough math" to develop new pricing models, risk measures and hedging systems. These models are then used by traders to assess the value of their financial assets more accurately, and more generally to mathematically manage their operations. Quantitative analysis is the […]