Statistical arbitrage is a trading strategy class that uses statistical and econometric techniques to exploit historically related financial instruments’ relative mispricings. Statistical arbitrage trading strategies still work as new instruments, exchanges, and financial markets create trading opportunities. What Is Statistical …
The stochastic oscillator is a technical analysis momentum indicator used by traders to determine momentum based on a particular asset’s price history. It shows the close relative to the high-low range across several periods. What Is the Stochastic Oscillator? An …
A stock catalyst is any news or event that leads to an increase or decrease in a stock’s price. Hard catalysts affect the company directly, while soft catalysts affect the company’s industry or global economy. What Is a Stock Catalyst? …
Moving averages are a technical analysis tool that smooths price data over a specific period. This smoothed price line helps limit the impact of random, short-term market movements that make it harder for traders to spot trends. We will cover …
A tick chart draws a new bar after a set number of trades. A time-based chart creates a new bar after every period, such as one hour. Tick charts offer many benefits over time-based charts for higher-frequency traders. This post …
Support and resistance lines are technical analysis tools predicting where an asset’s price will tend to stop and reverse. Without breaking through, multiple touches of the resistance area, often accompanied by high volume, denote these levels. The concept of support …
The relative strength index (RSI) is a technical analysis momentum oscillator that indicates potentially overbought and oversold conditions based on an asset’s recent closing price changes over a trading period. The RSI oscillates between zero and 100 and is considered …
Open interest is the number of unsettled outstanding derivative contracts. Each contract must have a buyer and a seller. It is considered open when a buyer or seller initiates a contract, but a counterparty does not close it by taking …
Trend following or trend trading is a systematic trading style that attempts to profit from trends in the market. Trend following buys when an asset’s price rises and goes short when an asset’s price falls. Trend following is ideal for …
A lease is a contract where a Lessor (owner) permits a Lesse (user) to utilize an asset for a particular period. Financing and operating leases are essentially a form of financing and need to be considered as such when valuing …