What is Extrinsic Value in Options Trading? Extrinsic value in options trading is the difference between an option’s strike price and the underlying asset’s price. It is also referred to as the premium. It is the portion of the worth that has been assigned to an option by factors other […]
Investing
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Call Premium – What is it? There are two common definitions investors should be familiar with regarding the term Call Premium. For bonds and debt securities – The call premium is the dollar amount over the par value of callable debt security that is given to holders when the security […]
What is the Plowback Ratio? The plowback ratio is the percentage of earnings a company reinvests rather than paying out higher dividends. for example, buying fixed assets. This ratio is an indicator of how much profit is retained in a business instead of being paid out to the investors. It […]
What Is the Treynor Ratio? The Treynor ratio is also known as the reward-to-volatility ratio. It measures the excess returns on a portfolio against what could have been earned on an investment with no diversifiable risk. In other words, it is a performance metric for determining how much excess return […]
What Is Idiosyncratic Risk? Idiosyncratic risk is a type of investment risk that is specific to an individual asset like a particular company’s stock. It can also affect a group of related assets like a particular sector’s stocks. And, in some cases, a very specific asset class like collateralized mortgage […]
What Is Unsystematic Risk? Unsystematic risk is a risk or potential danger that is inherent to a specific company or industry. It can be greatly reduced through portfolio diversification across different industries and classes of assets. Unsystematic risk is unique to a specific company or industry. It is also referred […]