Call Premium

Call Premium Definition – Debt & Securities vs Options Trading

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 […]

Plowback Ratio

Plowback Ratio Formula – Definition – Explanation – Examples

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 […]

Treynor Ratio

Treynor Ratio Formula – Explanation and Examples

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 […]

Idiosyncratic Risk

Idiosyncratic Risk Definition – Explanation – Examples

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 […]

Unsystematic Risk

Unsystematic Risk vs Systematic Risk – Definition – Meaning – Example

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 […]

Bull Trap

Bull Trap – What is a Bull Trap in the Stock Market?

What Is a Bull Trap? A bull trap is a false signal.  It refers to a declining trend in a stock, index, or other security.  The reversal occurs after a convincing rally that breaks a prior support level. This scenario traps traders or investors who act on the buy signal.  […]