Blog Posts

Cross-market arbitrage is a trading strategy that tries to profit from price discrepancies of identical or similar financial instruments across different markets.  This practice is founded on the principle of the law of one price, which states that the same asset should trade at the same price across all markets, assuming no trade restrictions and […]

Financial engineering became popular in the late 1970s as quantitative-minded traders began using mathematical techniques to have an edge in the markets. Its popularity grew in response to the financial crisis of 2007-2008. Financial engineering refers to the application of quantitative methods, especially those from the fields of mathematics, statistics, and computer science, to solve […]

Listerine royalty contracts offer a unique trading and investing opportunity that has been around for over a century.  Originally created due to unclear legal wording, these contracts have consistently provided passive income to institutions and private investors.  With the internet making these contracts more accessible, what was once a little-known investment is now easier to […]

MBS are essentially bonds backed by pools of mortgages. When homeowners make their mortgage payments, those payments flow through to the MBS investors. This offers investors a way to participate in the real estate market without directly owning properties. For traders, they offer a different type of fixed-income product to trade.   Key Takeaways – […]

A volatility surface is a three-dimensional representation of option implied volatilities across different strike prices and expiration dates. It’s an important form of visual analysis in options pricing and risk management. It provides a view of how the market perceives volatility for a particular underlying asset.   Key Takeaways – Volatility Surface Shape reveals market […]

Volatility trading is an advanced approach to trading. These strategies are primarily used in options trading, but they can also be applied to other financial instruments.  Focusing on the magnitude, speed, or variation of price movements – rather than their direction – enables traders to potentially profit in both up and down markets. It’s gained […]

The Percent Risk Model is a risk management, betting strategy, and position sizing framework that helps traders protect their capital while maximizing potential returns.  This approach focuses on limiting the amount of risk taken on each trade to a specific percentage of the total trading account.   Key Takeaways – Percent Risk Model Capital preservation […]

The 1-3-2-6 system is a betting strategy in trading for binary outcome-type instruments like binary options. Traditionally, it’s been a popular betting strategy used in various forms of traditional betting, in games like blackjack and roulette.  This system is designed to help traders manage their risk while potentially maximizing their profits through a structured approach […]

The Labouchere System – also known as the Cancellation System or Split Martingale – is a betting strategy used in trading. Developed by Henry Labouchere, a British aristocrat and politician in the 19th century, this system was initially designed for roulette but has since been adapted for various forms of trading and other betting games. […]

Psychology is a big component of trading. The decisions we make are a product of the processing of the information that our brain takes in. This means that our psychological biases can have a big impact on our trading decisions. There are many different psychological biases that can affect traders, but some of the more […]