A mutual fund or exchange-traded fund (ETF) that invests primarily in gold-producing companies or gold bullion. The price of shares within a gold fund should correlate very closely to the spot price of gold itself, assuming the fund holds the majority of its assets in bullion or in the stocks and bonds of gold miners and manufacturers. While many mutual funds focus on manufacturing and production stocks within precious metals, a few new ETF entries have focused primarily on ownership of gold bullion. Gold funds are a valuable tool for investors, including speculators (gold can be a very volatile commodity) and those wishing to hedge against geopolitical instability. Gold is also valuable as a bet against a falling currency. By investing in a gold fund, a retail or institutional investor can gain exposure to this asset without the hassle of taking delivery of physical gold assets, which is often required in the commodities market.
A currency that is free from legal and regulatory restrictions to be converted into another currency. A permitted currency is often a minor currency, and has a fairly active market for exchanges with major currencies. |||Transactions between a major currency, such as the U.S. dollar, and a permitted currency are smoother than ones between a major currency and a tightly-controlled one because the permitted currency is more liquid. In addition, some transactions require the settlement to be made in a major currency.
A type of option where the payoff is either zero or the amount by which the strike price exceeds the average price of the asset. The average price of these exotic options is derived with a timeframe that is determined at the creation of the option.
A type of mutual fund, closed-end fund or exchange-traded fund that can invest in companies located anywhere in the world, including the investor's own country. These funds provide more global opportunities for diversification and act as a hedge against inflation and currency risks. Many people confuse a global fund with an international, or foreign, fund. The difference is that a global fund includes the entire world, whereas an international/foreign fund includes the entire world except for companies in the investor's home country.
In currencies, this is the abbreviation for the Peruvian Nuevo Sol. |||The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
A type of options strategy used when a decline in the price of the underlying asset is expected. It is achieved by selling call options at a specific strike price while also buying the same number of calls, but at a higher strike price. The maximum profit to be gained using this strategy is equal to the difference between the price paid for the long option and the amount collected on the short option. For example, let's assume that a stock is trading at $30. An option investor has purchased one call option with a strike price of $35 for a premium of $0.50 and sold one call option with a strike price of $30 for a premium of $2.50. If the price of the underlying asset closes below $30 upon expiration, then the investor collects $200 (($2.50 - $0.50) * 100 shares/contract).
A mutual fund that invests in several different types of medium and long-term government securities in addition to top quality corporate debt. Gilts originated in Britain. Gilt funds differ from bond funds because bond funds invest in corporate bonds, government securities, and money market instruments. Gilt funds stick to high quality-low risk debt, mainly government securities.
The month during which there is the greatest trading activity in derivatives trading. These derivatives can be options, futures, or other type of derivative-based instruments. The occurrence of a blue month is typically of interest to hedge funds and large financial institutions because the volume of derivative trading can be used as a technical trading signal. Volumes of daily traded shares are much more accessible than the volume of daily derivative trading. However, options and futures trading activity is also publicly accessible to keen investors. The month when the volume of derivative trading is highest is referred to as the blue month.