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Trading Terms

Margin Trading

This practice involves borrowing funds from a broker to make trades.

Margin Trading is a common practice in the world of finance, where traders can leverage their investments by borrowing funds from a broker. This allows them to buy shares worth more than the available funds in their trading account. Essentially, it is a form of borrowing that allows traders to make larger trades and potentially earn higher returns. However, it also involves a level of risk, as any losses incurred must still be paid back to the broker. Therefore, it is important for traders to understand the concept of margin and its implications before engaging in margin trading.

Cover

When an individual or company repurchases a contract that was previously sold, it is known as a buyback. This can occur for a variety of reasons, such as to manage risk, imp...

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Short Position

On the other hand, a long position is when an investor buys an asset with the expectation of selling it at a higher price in the future. Short selling can be a high-risk stra...

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Overfitting

A model is an analytical tool designed to accurately predict future outcomes based on historical data. These models are often developed with specific rules and parameters in...

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Value at Risk (VaR)

In the world of finance, it is important to understand the concept of exposure within a portfolio. This refers to the level of risk associated with the securities included i...

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