An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market movements. An alligator spread is usually used in the options market to describe a collection of put and call options that may not be profitable. Pricing models and a more efficient market can help reduce the traditional spread on a security, but it is commissions that create the alligator spread, not market inefficiencies. The commissions are dependent on a transaction's brokers. Investors should check the commission schedules carefully to avoid having their profits devoured by the alligator spread.
The currency abbreviation or currency symbol for the Kenyan shilling (KES), the currency for Kenya. The Kenyan shilling is made up of 100 cents and is often presented with the symbol KSh. The Kenyan shilling is the strongest and most stable shilling in east Africa and is often used in unstable regions of Sudan and Somalia instead of local currencies. |||The Kenyan shilling was first seen replacing the East African shilling in 1966 in both coin and bill form. Many notes have since been replaced by coins, and larger denominations of bills have been put into circulation. A new set of bills was launched in 2003 to celebrate 40 years of Kenyan independence.
A calendar used by traders for the purpose of tracking the occurrence of market-moving events. Investors will research the date and time of a specific event and pay close attention to the announcement because of the high probability that it will affect the direction of the market. Traders in the foreign exchange market pay close attention to global events by using an economic calendar. By having the release schedule for each economic indicator, a trader can anticipate when major movements will happen. The most influential events include interest rate decisions, non-farm payroll numbers, and changes in gross domestic product (GDP), Consumer Price Index (CPI) and Purchasing Managers' Index (PMI). It’s important to note that there are several free resources available online that traders can use to help them determine the date/time of future market-moving events.
In real estate, when the cost of mortgage payments, property taxes, insurance and maintenance on a rental property is greater than the income it brings in. If this situation is not corrected, it will eat up all of the owner's profit, leaving him or her with negative cash flow. This occurs more often when a rental property is purchased near the peak of the real estate cycle. In this case, the investor buys the overvalued building and rents it out, but as interest rates rise and maintenance costs add up, the owner is forced to either sell the building or suffer a negative cash flow.One way to get around the negative cash flow situation is to buy property with a large down payment, thereby reducing the mortgage payment.
An individual or company, which purchases a corporation with the intention of dividing that corporation up into its parts and selling these parts for profit. An asset stripper will determine if the value of a company is worth more as a whole or as separate assets. Usually the asset stripper sells some assets off immediately then sells the functioning portion of the business later. This is a corporate purchaser who discovers companies, which will create more profit by liquidating the parts rather than through business operations. For example an asset stripper could purchase a battery company for $100 million, strip and sell the R&D division for $30 million, then sell the remaining company for $85 million, for a profit of $15 million. The asset stripper could also just sell a portion of the business to fulfill debt obtained from acquiring the company.
The risk that arises when operating in a foreign jurisdiction. In recent times, jurisdiction risk has focused on banks and financial institutions who are exposed to the risk that some of the countries where they operate may be high-risk areas for money laundering and terrorism financing. Jurisdiction risk can also refer to when laws unexpectedly change in a jurisdiction an investor has exposure to. |||Jurisdiction risk is generally believed to be higher in countries that have either been designated as non-cooperative by the Financial Action Task Force, or have been identified by the U.S. Treasury as requiring special measures due to concerns about money laundering or corruption. Because of the punitive fines and penalties that can be levied against a financial institution that is involved (even inadvertently) in money laundering or financing terrorism, most organizations have specific processes to assess and mitigate jurisdiction risk.
Any subsequent trading that affects an established position in a security or derivative. Follow-up actions are taken to change the amount of exposure an investor has in a position, or to limit a strategy's losses or profits. For example, an investor who is long in shares of Company XYZ may be nervous about future losses. He or she could take the follow-up action of purchasing a put option for the stock, which would minimize losses in the event of a downturn.
A market theory that states stock prices and aspirin production are inversely related. The Aspirin count theory is a lagging indicator and actually hasn't been formally tested, so it is more a humorous hypothesis than a theory. As stock prices fall, more and more people need pain relievers to get through the day. For example the Aspirin count theory would predict that as aspirin sales increase, the stock market's value decreases and vice versa.
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