Blog Posts

The financial markets are complex systems driven by a wide range of variables. Understanding these factors is essential for investors, traders, and financial professionals to make informed decisions and navigate the reality that asset prices are always changing. In this article, we look at the various catalysts that can influence the price of financial assets, […]

As a long-term investor, one of the important aspects of managing your investment portfolio is maintaining the right balance between various assets and asset classes. The aim is to achieve an allocation that generates enough expected return while keeping risk at an acceptable level. To maintain this balance, you need to periodically rebalance your portfolio. […]

The Markowitz Model, the basis behind Modern Portfolio Theory, was developed by Harry Markowitz in 1952. This groundbreaking work introduced the concept of portfolio optimization and earned Markowitz the Nobel Prize in Economics in 1990. The Markowitz Model enables investors to create an optimal portfolio by maximizing returns for each unit of risk. This article […]

Dispersion trading is a trading and investment strategy that aims to capitalize on the differences in implied volatility between index options and options on individual stocks. This article will explain dispersion trading, discussing how traders can potentially profit from these differentials in implied volatility. We’ll also look at the various components of the strategy, such […]

Implied volatility (IV) is an important concept in options trading and risk management. It is a measure of the market’s expectation of future price volatility and is derived from option prices. By understanding implied volatility, traders can gain insights into market sentiment and make more informed decisions. In this article, we’ll look at the concept […]

Currency values play a vital role in international finance, trade, and the global economy. Naturally, the fluctuating nature of currency values is what allows currency traders to generate profits. To make informed decisions and succeed in foreign exchange trading, it’s important to understand the factors that give a currency its value and the mechanics behind […]

The petrodollar system has been a significant factor in shaping the global economy for nearly half a century. This system, which revolves around the trade of oil for US dollars, has sustained the value and reserve currency status of the US dollar and influenced global politics and economics since its inception in the 1970s. This […]

The Bretton Woods system, established in 1944, marked a significant milestone in the history of the global monetary system. It laid the foundation for the current system of international finance and trade, shaping economic policies for decades. This article will look at the formation and breakdown of the Bretton Woods system, its implications, and the […]

Zoltan Pozsar, a prominent economist and former managing director at Credit Suisse, has made significant contributions to the understanding of the financial system’s inner workings. His extensive research and analysis have looked at the intricacies of the global funding market, a multitrillion-dollar ecosystem where Wall Street (i.e., banks, brokers, asset managers, and related entities), corporations, […]

The shadow rate is a concept in financial models, primarily used to measure the economy when nominal interest rates approach the zero lower bound. It was introduced by Fischer Black (1938-1995) in his final paper, “Interest Rates as Options,” and has gained renewed interest following the Financial Crisis of 2007-2008 when nominal interest rates hit […]