Ascending Channel
What is an ascending channel In technical analysis, an ascending channel is a bullish chart pattern that is created when the price of an asset moves higher between two parallel trendlines. The upper trendline marks the asset's highs, while the lower trendline indicates the lows. The ascending channel is considered to be a continuation pattern, which means that it typically...
Intertemporal Choice
What is Intertemporal Choice Intertemporal choice is the process of making decisions about events that will take place in the future. Individuals often face intertemporal choices when deciding whether to save or spend money, as well as when considering decisions with long-term consequences, such as whether to smoke cigarettes or eat healthy foods. The study of intertemporal choice investigates how...
Entity Theory
An Overview of Entity Theory Entity theory is a crucial legal and accounting concept for businesses. It emphasizes the separation of business and owner transactions and allows businesses to concentrate productive assets and maximize profit. This article provides an overview of entity theory and the advantages it can bring to your business. It also outlines the advantages and disadvantages of...
Turnkey Solution
What is a turnkey solution and why do businesses need it A turnkey solution is a product or service that is ready to use as soon as it is delivered. The term "turnkey" comes from the idea of a key being turned to start up a machine. In business, a turnkey solution is often used to describe a package that...
Reserve Fund
What is a reserve fund and why do you need one A reserve fund is an important part of any financial plan. It is a savings account that is used to cover unexpected expenses or major life events, such as a job loss or a medical emergency. Having a reserve fund can help you weather financial storms and avoid going...
Tracking Stocks
Investing in Tracking Stocks A tracking stock (or letter stock, targeted stock) is a type of issue based on the operations of a wholly-owned subsidiary of a diversified company. Investors receive dividends tied to the performance of the tracked business. They can be purchased and sold as common stock. This article will explore the key features of tracking stocks. Here...
Translation Exposure
What is Translation Exposure Translation exposure is the risk that a company's financial statements will be adversely affected by currency fluctuations. This type of exposure can arise when a company has operations in multiple countries and must translate its financial statements into a single currency. If the value of the home currency decreases relative to the foreign currencies, this can...
Time Decay in Options
Options Trading - How Time Decay Affects Options Prices The rate of time decay varies for different options. Specifically, the rate of time decay for ATM options is the highest and it gets smaller as the option moves in price. Time decay also increases with shorter-term options as their expiration date approaches. Here are some key points to remember when...
Inventory Financing
What is inventory financing and why would a business need it Inventory financing is a type of business loan that can be used to purchase inventory or Raw materials. The loan is by the inventory itself, which means that if the business is unable to repay the loan, the lender can seize and sell the inventory to recoup their losses....
Zero Cost Collar
What is Zero Cost Collar A zero-cost collar is a risk management strategy used in futures contracts to protect against loss while maintaining upside potential. The strategy involves buying a put option and selling a call option at the same time, with the strike prices of the two options set at different levels. The change in price of the underlying...