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In business, a white knight refers to a particular strategy for preventing hostile takeovers. Specifically, the white knight is a company that acquires a corporation in danger of hostile takeover in order to prevent acquisition by an unfriendly bidder, or black knight. While the acquired corporation does not remain independent, the white knight is preferable; usually […]

In technical analysis, a moving average (MA) is an indicator used to monitor price action while filtering out “noise” from random price fluctuations. Since it is based on past prices, moving average is termed a lagging or trend-following indicator. There are two main ways to calculates moving average: simple and exponential. In a simple moving average […]

In technical analysis, triangle patterns are formed by trend lines that meet at an apex, or corner, as price ranges converge. The top of the triangle is a trend line connecting highs in price, while the bottom of the triangle connects the lows. The apex is formed by where the upper and lower trend lines […]

A poison pill, also known as a shareholder rights plan, is a strategy a company might use to prevent a hostile takeover. Poison pills are designed to make a company’s stock less attractive to a would-be buyer, often by making it more expensive. One common example of a poison pill using stock is a “flip-in” in which current […]

Support, or support level, refers to a price below which a particular stock is not likely to fall according to historical data. Buyers tend to enter a stock near the support level since the stock is not likely to get cheaper. Support can be thought of as a floor below which the stock will not […]

A rainbow option is an options contract based on the performance of more than one underlying asset. An investor can use a rainbow option to speculate on what asset will perform best or worst in a group, or how well the underlying assets perform as a whole. Each underlying asset can be considered a “color,” making […]

The discount window refers to the Federal Reserve practice of making short-term loans to banks. These loans are usually overnight and collateralized. When a bank experiences a short-term liquidity shortfall, it may turn to the Fed for a quick infusion of cash. Generally, banks prefer to borrow from other banks at the much lower federal funds […]

In investing, a watchlist is a list of securities an investor or trader makes in order to monitor potential opportunities. A watchlist may consist of just a few stocks or hundreds of trading instruments. No matter the size, the watchlist is designed to give the investor or trader relevant information for making important decisions and keeping […]

Quantitative easing, also known as large-scale asset purchases is an economic policy in which a central bank buys a predetermined amount of government securities and other financial assets from the market with the goal of lowering interest rates and increasing the money supply. The driving idea behind the policy is to flood private banks with money, which […]

Zombies are companies that make enough money to continue operation and pay interest on debt, but are unable to pay off their debt. While these companies stay afloat paying overhead costs, they do not have enough many left over for investment in new growth. These companies are often very dependent on banks and may be […]