School Articles

Alpha is a definition of the efficiency of an investment portfolio concerning a benchmark - for example, a stock market index. In other words, it is the degree to which the trader has managed to "beat" the market for a certain time. Depending on its proximity to the market, the alpha index can be positive or negative.

When a trader redeems an asset, the price falls, and if the trader buys more, this is considered a down-average.

This is called an averaging down because the average price of an asset or a trading instrument has been lowered. As a result, the point at which trading becomes profitable has also been reduced.

In trade, the concept of base currency has two main meanings: the first currency listed in the forex pair or the accounting currency used by banks and other companies.

Automated trading – commonly defined as computational trade – is the use of algorithms to organize transactions.

Amortization is the method used to allocate loan repayments or the price of an intangible property over a defined period of time. It is generally a certain number of months or years, based on conditions set by banks or copyright agencies. Depreciation often relates to the payment of interest, which is set at the discretion of the creditor.

American Depositary Receipt (or ADR, for short). This is a way of allowing shares of foreign companies to be traded in the USA. In this case, the use of their local stock exchanges is not required.

For ADRs to be traded on U.S. exchanges, just like U.S. shares, a financial institution (usually a U.S. bank) buys in bulk a large number of shares of a particular company and then reissues them on the stock exchange.