Monthly Archives: January 2019

Parking (or stock parking) is the illicit practice of selling shares to another party with the mutual intention that the original owner will buy them back after a brief period of time. The goal of parking is to hide who really owns the stock while appearing to comply with regulations.  Often this is used to avoid having […]

The debt ceiling is a legislative limit to the amount the US government can borrow by issuing bonds. In other words, it is a congressionally-approved cap on how much national debt can be incurred by the US Treasury. The ceiling also applies to debt owed to federal government trust funds such as Social Security and […]

A Monte Carlo simulation (or probability simulation) is a technique for modeling the probability of different outcomes in processes where random variables make the outcome difficult to predict. Rather than replacing uncertain variables with a single average number, Monte Carlo simulations run many different possible variables. In finance, Monte Carlo simulations are used to estimate the probability […]

Painting the tape is a type of market manipulation in which investors collude to buy and sell a security among themselves, thereby creating the illusion of heavy trade activity. The uptick in activity can cause the security to attract attention from other investors, artificially driving up the price. The market manipulators then sell their shares […]

A backflip takeover is a rarely used type of takeover in which the acquiring company becomes a subsidiary of the acquired company after deal completion. This is the opposite of what occurs in a typical takeover, in which the target company becomes a subsidiary of the acquirer. Backflip takeovers usually occur when the acquiring company is […]