Author: Max Holmes

Circuit breakers, also known as collars, are measures approved by the SEC designed to temporarily halt trading during a massive sell-off period in order to discourage investor panic. the halt gives investors time to cool off and evaluate their options On the NYSE, circuit breakers were first put into place after the Black Monday crash […]

Amortization has two primary meanings. In personal finance, amortization refers to a repayment arrangement in which regular payments are made over an extended period of time, such as in a car or home loan . Often in a fixed repayment schedule, earlier payments consist primarily of interest, and the proportion of the payment dedicated to […]

A hedge is an investment made to offset the risk of negative price movement in another asset. A hedge can be thought of as a kind of insurance policy that prevents a person from losing too much money when a particular asset plummets in price. For instance, a person investing in a luxury goods stock […]

An initial public offering (IPO) occurs when a private company makes stock available to the public for the first time. An IPO may be issued by a smaller, newer company looking for capital to expand, but can also be initiated by larger private companies that wish to become publicly traded. The company is referred to as […]

Inventory turnover can be a useful tool in evaluating retail-based businesses. It is expressed as an efficiency ratio that indicates how often a company’s inventory is sold and replaced over a given period of time. It can be calculated one of two ways: either by dividing market value of sales by ending inventory, or by […]

A sell-off refers to a rapid selling of any type of security, including stocks, bonds and commodities. As more investors sell, supply increases, causing a drop in the security’s value. A sell-off might be triggered by a specific event such as a poor earnings report or corporate scandal. A sell-off in the broader market often occurs […]

A pure play refers to a stock for a publicly traded company that focuses primarily on one specific industry. It is more or less the opposite of a diversified business. For example, Netflix (NFLX) might be considered a pure play since it focuses on almost exclusively on producing and streaming entertainment content. In contrast, Amazon (AMZN) would not […]

A stock is said to outperform when it generates better returns than a particular index or the overall market. A company may outperform in relation to a major stock index, other companies in the same industry, or other companies with a similar level of market capitalization. A company can outperform by growing revenue and earnings faster […]

In a previous article, we covered the basics of candlestick charts. Today we look at a particular feature of candlestick charts known as a doji. The term comes from the original 16th century Japanese rice trading system on which candlestick charts are based.   A doji candlestick forms when the opening and closing prices of a stock […]