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What Is the Nepalese Rupee (NPR)?
The Nepalese Rupee (NPR) stands as the official currency of Nepal, a nation rich in natural beauty and cultural heritage. Administered by the Nepal Rastra Bank, Nepal's central bank, the NPR is an integral part of the country's economic landscape. In this article, we will delve into the history, characteristics, and significance of the Nepalese Rupee, a currency symbolized by Rs and Rp. The journey of the Nepalese Rupee began in 1932 when it was introduced, effectively replacing the previously used Nepalese Mohar. Since then, it has played a pivotal role in the economic development of Nepal. Continue reading...
What's the Difference Yuan vs. Renminbi?
Chinese currency is a topic of significant interest in today's global economic landscape. It not only reflects the status of one of the world's largest economic powers but is also central to a contentious issue surrounding China – the perception of its mercantilist policies, particularly the alleged manipulation of its currency's value to gain an unfair advantage in international trade, especially against the U.S. dollar. In this article, we will delve into the intricacies of Chinese currency, explaining the distinctions between the Chinese Yuan (CNY) and the People's Renminbi (RMB) and shedding light on the associated issues. Continue reading...
What Are 529 College Savings Plans and How Can They Benefit You?
Navigating the world of education savings? Dive into the comprehensive guide on 529 College Savings Plans. Uncover the tax benefits, understand the two primary types, and learn how to choose the right plan for your needs. Whether you're planning for college, K–12 education, or even apprenticeship programs, a 529 plan offers flexibility and significant tax advantages. From investment risks to using funds abroad, get insights into every facet of these plans. Equip yourself with the knowledge to make informed decisions and secure a brighter educational future for your loved ones. Continue reading...
Essential Tips for Beginners - What is Day Trading and How Can Beginners Master It?
Dive into the dynamic world of day trading! Whether you're a novice or looking to refine your approach, this guide offers essential insights. Discover the importance of choosing the right broker, the nuances of trading strategies, and the significance of discipline in this high-risk, high-reward venture. From understanding market volatility to mastering risk management techniques, arm yourself with the knowledge to make informed decisions. As the financial markets constantly evolve, stay ahead with these expert tips and strategies. Remember, in the realm of day trading, knowledge truly is power. Continue reading...
What is a Loss Portfolio Transfer?
Dive into the world of Loss Portfolio Transfers (LPT) in insurance. 📈 Understand how insurers transfer risks & bolster balance sheets. Reinsurers? They see big investment opportunities. A financial dance, balancing risks & rewards, as the industry evolves. #LPT #InsuranceInsights🔍📊 Continue reading...
What Is Cardano (ADA)?
What is the relationship between crude oil and natural gas prices?
When commodity prices rise, there is an impact on how people travel, how goods are shipped, and how people formulate their budgets. In comparing the rise of natural gas vs. oil prices, both have an impact on the consumer. For instance, when home heating prices climb, people have to decide whether or not they can afford to turn up their thermostats. Furthermore, when various goods have become more expensive because their components also cost more, people have to make difficult choices on what to buy. The price of oil affects individual spending choices as well as the budgets of corporations and governments. Continue reading...
What Is Business Intelligence (BI)?
Unlock the power of data with Business Intelligence (BI)! Dive into its evolution, tools, and how BI turns raw data into strategic insights for informed decision-making in today's business landscape. Continue reading...
How Has Commerce Evolved, and How Does It Differ from Business and Trade?
From ancient bartering to today's e-commerce, commerce has been the backbone of economic evolution. Dive into the intricate world of buying, selling, and the digital revolution shaping modern commerce. Continue reading...
What are Financial Statements and Why are They Important?
Decoding the world of financial statements can seem daunting, but they are pivotal in understanding a company's fiscal health. These records, more than just numbers and charts, offer a transparent view into a business's activities and achievements. From the snapshot provided by the balance sheet to the profitability insights from the income statement, each document tells a part of the company's financial story. Investors, accountants, and various stakeholders rely on these tools to make informed decisions, be it for taxation, financing, or investment opportunities. This guide delves deep into the intricacies of these statements, shedding light on their types, components, and the power of their analysis. Whether you're an industry professional or a curious individual, understanding these statements is crucial in today's data-driven business landscape. Continue reading...
What Is Electronic Commerce (E-commerce)?
What is Business-to-Business (B2B)?
Explore the world of Business-to-Business (B2B) with this comprehensive guide. From traditional interactions to e-commerce evolution, uncover how B2B drives industries like automotive, property management, and more. Discover the contrasts between B2C and the future of inter-business transactions. A must-read for business professionals! Continue reading...
The U.S. Dollar's Stability: Could It Ever Collapse?
The U.S. dollar, often seen as a global benchmark of economic strength, has been the subject of speculation and debate for decades. With the shifting dynamics of the global economy, especially with the rise of China as an economic titan, questions about the potential collapse of the U.S. dollar have become more frequent. But how likely is such a scenario? Continue reading...
What are Key Performance Indicators (KPIs) and Why are They Important?
Unlock the secrets of business success with Key Performance Indicators (KPIs)! Delve deep into the world of measurable metrics that guide companies towards their goals. From financial insights to customer satisfaction, KPIs offer a panoramic view of an organization's performance. Discover their types, significance, and how giants like Tesla harness their power. Navigate the intricate landscape of business with data-backed decisions and set your organization on a path to unparalleled success. Continue reading...
What Is Marxism and Differentiates from Other Socio-Political Theories?
Journey into the world of Karl Marx, the visionary behind Marxism. From dissecting capitalism's flaws to envisioning a revolutionary alternative, Marx's ideologies have shaped centuries of socio-political discourse. Delve into the essence of class struggle, the critique of economic disparities, and the quest for a just world. As society grapples with modern challenges, Marx's legacy offers a lens to understand and inspire change. Continue reading...
What is the definition of a hedge fund?
Dive into the enigmatic world of hedge funds! 🌍💰 Unravel their core, decode diverse strategies, and explore their unique investment philosophy. Whether you're an investor or just curious, unlock insights into their allure, potential, and nuances. #HedgeFundsExplained 📈🔍 Continue reading...
What does "register" mean in language and communication?
Unlock the parallels between 'register' in finance & communication! 🌐 Dive deep into its multifaceted definitions, the formalities behind it, and its crucial role in clarity & effectiveness. Discover how finance can shed light on linguistic dynamics. 📜🗣 #LanguageMeetsFinance Continue reading...
What is Currency and How Does It Relate to Money?
Dive into the captivating journey of currency! 🌍💰 From ancient grain receipts to modern cryptocurrencies, explore how money has shaped trade, society, and our global economy. Unravel the difference between currency & money. What's next in this evolution? Discover now! #CurrencyEvolution 🪙🔗📜📈 Continue reading...
What is an Agent and How Do They Operate Across Different Domains?
In the intricate tapestry of business, sports, real estate, and more, agents stand as the linchpins, bridging gaps and navigating complexities. Rooted in legal foundations, agents are empowered individuals, representing and acting on behalf of another entity or person. From negotiating star-studded sports contracts to facilitating seamless property transactions, their roles are as diverse as they are crucial. But what truly defines an agent? Delve into the world of universal, general, and special agents, each with their unique mandates and domains. Beyond their roles, agents shoulder a spectrum of responsibilities, bound by fiduciary duties that prioritize their principal's interests. Whether it's the duty of transparency, care, or obedience, these responsibilities ensure that agents act with utmost integrity and diligence. Dive deeper to understand the dynamic between agents and principals, a relationship built on trust, clarity, and expertise, driving success across various landscapes. Continue reading...
What Does the All-Ordinaries Stock Index Mean?
Explore the All-Ordinaries Stock Index, Australia's key market benchmark, representing the top 500 corporations. Uncover its rich history, inclusion criteria, and calculation method. A vital tool for investors and economists, it's a barometer of economic health. Discover more now! Continue reading...
How can one invest in the Vanguard Total Stock Market ETF (VTI)?
Explore the Vanguard Total Stock Market ETF (VTI), a diversified fund with 3,900+ stocks, reflecting the entire U.S. equity market. Benefit from its low 0.03% expense ratio, market cap-weighted index, and top holdings like Apple & Microsoft. A go-to for cost-effective investment. #VTI #Investing Continue reading...
What are the benefits of using a Lowe's Credit Card?
Renovate with ease using the Lowe's Advantage Card! Enjoy 5% off Lowe's purchases, 20% off your first buy (up to $100), and customized financing options. With no annual fee and special perks for home improvement projects, this card is a standout choice for Lowe's shoppers. #LowesCard Continue reading...
What is an Administrative Order-on-Consent (AOC)?
Understanding Administrative Order-on-Consent (AOC)? Explore this essential legal tool used for environmental regulation. Learn about its structure, enforcement by bodies like the EPA, applications in damage control, and joint liability. A must-read for environmental compliance insight! 🌍✅ Continue reading...
What Is a Recession? The Economic Downturn Explained
Ever wondered what truly defines a recession and how it impacts our economy? From the tell-tale signs of an inverted yield curve to the dance of interest rates, journey with us as we demystify the complexities of economic downturns and their lasting effects. Equip yourself with knowledge to navigate uncertain financial times. Continue reading...
How Do Dividends Work? Unraveling the Shareholder's Reward
In the world of finance and investing, dividends play a crucial role in the decision-making process of many investors. But what exactly is a dividend, and why is it so significant? Continue reading...
What Are Index Funds? A Comprehensive Insight
Ever wondered why Warren Buffett champions index funds for the average investor? Unravel the allure of these passive investment giants and discover how they could be the key to long-term financial growth. Continue reading...
How Does Capital Gains Tax Work? A Comprehensive Deep Dive
Unlock the mysteries of capital gains tax: How does it impact your investments, and what's the difference between short-term and long-term rates? Dive in to make informed financial decisions and optimize your investment strategy Continue reading...
How Do You Decipher the Profit and Loss Statement? A Comprehensive Guide
Unlock the secrets of a company's financial health! Dive deep into the Profit and Loss Statement, its components, and its pivotal role in business analysis. A must-read for every budding financial enthusiast. Continue reading...
What is a Profit?
In its simplest form, a profit is the revenue or income gained from an entity after all expenses/overhead is accounted for. In business, a company deals with a number of expenses - operating expenses (the cost of doing business), fixed costs (overhead), salaries and benefits, legal fees, and so on. If a company’s revenues exceed all of these costs combined, the company is considered profitable. A profit is also known as a company’s bottom line, net earnings, or net profit. Continue reading...
What is a Loss?
A loss refers to reduction in the value of an investment, or in business terms, to having expenses outweigh revenues. In a company’s fiscal year, if their operating and total expenses outweigh their revenues, they are operating at a loss. If those companies are not supported by private capital and operate at a loss for too long, it can easily lead to bankruptcy or closure. Newer businesses often run at a net loss for the first few years, while they rush to build labor and capital infrastructure, with costs such as equipment, buildings, technology, employees, and rights. Continue reading...
What does Equity or Security Mean in the context of Capital Markets?
An equity or security generally refers to an individual position owned within a portfolio. An equity generally signifies some level of ownership in a corporation. When a person has ‘equity in a company,’ it generally means they own some portion of it and have a claim on the company’s value. An equity is another way of referring to a stock, which also represents a shareholder’s stake in a company. A security is a broader term, which refers to an instrument of ownership. Stocks are considered securities, but fixed income or debt holdings can also be labeled securities within a portfolio. Continue reading...
What does Ticker Mean?
A ticker symbol is an abbreviation used to uniquely identify publicly traded shares of a particular stock or security on whatever market it trades on. Stocks are usually represented by a combination of letters (typically 3-4), ETFs are generally identified with 3 letters, and mutual funds often have 5-letter combinations that end in the letter “X”, but they can also be alphanumeric. A ticker can consist of a combination of letters, numbers, and sometimes (but not often) both. Continue reading...
What Does Asset Mean?
Any item of economic value that a person or entity owns, benefits from, or has use of in generating income. Assets can generally be converted to cash, but economic circumstances often determine whether the asset can be sold at fair value. Some common examples of assets are cash, stocks, paid-for real estate, inventory, office equipment, jewelry, artwork, or other property of value that can be counted towards a person’s estate or a corporation’s balance sheet. Continue reading...
What does Arbitrage Mean?
Arbitrage is the practice of buying a security/product in one market and selling it in another, in an effort to capitalize on price difference. Arbitrage can take many forms in trading: buying a security in one market and selling it in another for a better price (market arbitrage); borrowing money in one currency at a lower interest rate in order to pay off debt in another currency with a higher interest rate (currency arbitrage); buying and selling the same security on different exchanges or between spot prices of a security and its future contract; and so on. Continue reading...
What does Ask Mean?
In the financial markets, “Ask” is the price that a seller is willing to accept for a security. It is also known as the offer price. Given the market is constantly changing, Ask prices are rarely set in stone for long. What’s more, the Ask price on a security may not necessarily be the best going price available for it. It merely represents what that particular seller is willing to accept for it. What is a “Spread”? What is a Market-Maker Spread? Continue reading...
What does Bid Mean?
When you make a ‘buy offer’ on a stock or other security in the financial markets, you are making a Bid. A Bid offer in terms of financial markets is the price offered by an investor or trader for a security. A market maker will try to reconcile Bid offers (the highest prices that buyers are willing to pay) with Ask offers (the lowest price that a seller is willing to accept). Match the Bid and the Ask offers, and you’ve got a trade. Continue reading...
What is the Bid-Ask Spread?
The Bid-Ask Spread is the difference between an offer made on a security and the price a seller is willing to accept. The Bid-Ask Spread is the amount by which the ask price exceeds the bid. For example, if the bid price is $50 and the ask price is $51 then the "bid-ask spread" is $1. The larger the bid-ask spread, the less liquid the market for that particular security - buyers and sellers are too far apart for trades to occur easily. When trading, investors have to pay attention to the bid-ask spread, because it is ultimately an additional cost to investing in or trading stocks. Continue reading...
What is Asset Turnover?
Asset Turnover is a metric that investors and companies can use to determine how efficiently a business uses its assets to create revenue. Asset Turnover is a ratio of the value of a company’s sales or revenues relative to the value of its assets. It can be calculated simply by dividing sales or revenue by total assets. The higher an asset turnover ratio for a company, the better that company is performing - since it implies that the company is generating a high level of sales and revenue per unit of assets. Continue reading...
What are Asset-Backed Securities?
An Asset-Backed Security, or ABS, are bonds or notes backed by financial assets. It is an example of “securitization.” The assets within the ABS generally tend to consist of different kinds of debt receivables, such as credit cards, auto loans, home equity loans, and so forth. Banks build portfolios of receivables in making loans and issuing credit, and then in many cases package these loans together and sell them to investors (known as “securitization”). Continue reading...
What is a Blue-Chip Stock?
A blue-chip stock generally refers to a publicly traded company that is very well-established and is in the top tier of market capitalization, usually in the tens of billions. There is no formal definition for what makes a company a blue-chip stock, but the general category includes some of the biggest and most household names available to trade. Companies like Johnson & Johnson, Walmart, Visa, Dow Chemical, and so on, that have been around for decades and have market capitalizations in the tens of billions. (click on the link for each company to see their current stock price) Continue reading...
What does “Buy-Side” Mean?
The “buy side” refers to businesses in the financial services industry such as pensions, mutual funds, and asset managers that manage money. Since firms on this “side” of Wall Street tend to be the ones buying and selling securities for their portfolios, when a person works for one of these funds or companies they are said to be on the “buy side.” Research analysts that provide analysis and data to fund managers solely for the purpose of making investment decisions within the portfolio are “buy side analysts.” That research is typically not published for public use. Continue reading...
What does Capital Gain Mean?
A Capital Gain refers to the profits or gains made from selling a security at a higher price than the original purchase price. In stock trading, if an investor sells a stock for more than they bought it for (or the price inherited), the profit realized is a capital gain. The same applies to gains made in real estate. To note, assets held within tax-deferred accounts, like IRAs and 401(k)s, do not trigger capital gains when sold for profits. It only applies to taxable assets, like stocks held in a brokerage account. The capital gains tax is the tax paid on net capital gains in a given year. Continue reading...
What Does Capital Loss Mean?
Capital Loss refers to a loss realized when a security is sold for less than it was purchased for. In stock trading, if an investor purchases stock ABC for $30 / share, and then sells the stock a few months later for $22 / share, they have realized an $8 / share capital loss. At the end of every year, as per U.S. tax policy, capital losses can be used to offset capital gains, so as to help an investor reduce their tax burden. A common year-end strategic approach is to “harvest” capital losses in an effort to offset any capital gains made from trading that year. Continue reading...
What Does Having a Long Position Mean?
A long position in a security means owning shares and having a positive investment balance in a stock, bond, commodity, etc. This is done by simply buying and owning the investment. An investor with a long position in a stock will benefit financially when the price of the stock rises. What is a Short Position? What is Short Selling? Continue reading...
What Does Market Capitalization Mean?
Market Capitalization refers to the total ‘market-size’ of a company, calculated by the number of shares outstanding multiplied by the stock price. Investors should take care not to consider a company’s market capitalization as an accurate reflection of the company’s actual size by assets. Companies with very large market capitalizations can still operate with net losses, Twitter being an example. Continue reading...
What is a Market Maker?
A market maker is a broker-dealer firm or a registered individual that will hold a certain number of shares of a security in order to facilitate trading. There could be as many as 50 market makers for one particular security, and they compete for customer order flows by displaying buy and sell quotations for a guaranteed number of shares. The market maker spread refers to the difference between the amount a market maker is willing to pay for a security and the amount that the other party is willing to sell it. Continue reading...
What is a Market Order?
A market order is an order to execute a trade (buy or sell) immediately at whatever the current market price. If an investor places a market order after hours, for instance, the order will be filled at the market’s open wherever the price of the security is. Placing a market order, also known as an “unrestricted order,” means the person trading the security is more concerned with timely execution of the trade than they are the actual price. If a market order is placed for a security that has very high volumes and is a common stock, the market order is likely to be filled right away. Continue reading...
What Does Market Risk Premium mean?
Market Risk Premium refers to the expected return on a risk asset, minus the risk-free rate. A good barometer for the risk-free rate is using a U.S. Treasury bond, which is largely considered a risk-less asset if held to maturity. To give an example, let’s say the annual expected return on Stock ABC is 11%, and a 1-year U.S. Treasury pays 2%. In this case, the market risk premium is the difference between the two, or 9%. Continue reading...
What is Market Value?
Market Value refers to the amount an asset can be sold for on the open market, at any given time. If you hold 100 shares of stock ABC that you can sell on the market for $50 apiece, your holdings have a market value of $5,000. Market value does not necessarily refer only to stocks. It can be any asset that can be bought or sold on the open market. Stocks tend to have greater levels of liquidity and broad-based market participation, so it is easier to disseminate a stocks market value at any point in time. Illiquid assets can be more difficult to value, such as real estate or works of art. Continue reading...
What are Marketable Securities?
Marketable securities is a term referring to assets / securities that can be converted to cash easily, at least within a year. Examples of marketable securities are stocks, bonds, or CDs you might buy at the bank. What makes an asset a marketable security is its ability to be redeemed for cash quickly at a known market price. What is a Broker-Dealer? What is an Illiquid Security? Continue reading...
What is the Prime Rate
The prime rate is the lowest interest rate that banks will charge on loans at a given time, based on the Federal Funds Rate. Individual banks set their own prime rate, which they may also call their "Reference Rate" or "Base Lending Rate." It is the least they will charge for a loan at a given time, based on the creditworthiness of the customer, and the only clients whose risk of default is low enough to approach the prime rate are very large commercial clients. Continue reading...
What is a Quote?
Quotes are current pricing information about individual securities on an exchange. A potential investor will refer to a current quote to see what price a security traded at most recently. A quote will also show the bid and ask prices, which indicates the price other buyers are attempting to buy the security for (bid), and the price sellers are trying to sell it for (ask). If you are selling, you're going to get the bid price, and if you're buying, you're going to pay the ask price. The difference between the two is called the spread, and will basically be pocketed by the broker or specialist that handles the transaction. A security with a spread of zero indicates high liquidity and is referred to as a frictionless asset or trade. Continue reading...
What is Securitization?
Securitization is to turn an asset which would otherwise not be a liquid, tradable security, into one. Simply put, securitization turns assets into securities. The most common example when discussing securitization is mortgage-backed securities, in which the cash flow of interest and principal payments on mortgage loans has been pooled, cut up, and distributed for sale in the form of marketable securities which can be held by an everyday investor. The bank or institution who sold the mortgage-backed securities receives cash which they can loan out to more home-buyers. Continue reading...
What is a Security?
A security is a marketable ownership contract which entitles the owner to the right to use the contract as a type of currency backed by a specific asset, which could be partial ownership in a company, a debt (bond), or a derivative interest. Securities are broadly categorized into debt securities (e.g., bonds), equity securities (e.g., stock), and derivatives (e.g., futures, options, etc.). They will generally be issued by a company or government entity and will entitle the owner of the contract the right to trade the ownership interest for value in the open market. Continue reading...
What is a Settlement Date?
The length of time after a trade is executed that the securities are due delivered and the payment is due paid varies for different types of transactions, but the date on which this occurs is the settlement date. Most exchange-traded corporate securities in the United States are required to be settled three days after the trade order is entered, which is called T+3. That date is the settlement date, and is the final date on which the transaction must be finalized by both parties involved. Continue reading...
What is the Short Interest Ratio?
The Short Interest Ratio (SIR) measures investor sentiment for a given company and is calculated using the number of shares being shorted divided by the average daily trading volume of the stock. Also called the short ratio or float short, the SIR is a ratio of the number of shares being shorted divided by the average daily trading volume for the stock over the last 30 days. The ratio can be interpreted as the number of days it takes short sellers to repurchase borrowed shares, or an approximation for the number of shares that have been sold short and not yet covered as a percentage of all trading volume. Continue reading...
What is Terminal Value?
The "end" value at a specified date in the future of an investment or cash flow. Terminal value is a term used in value calculations looking forward toward the future value of an asset or cash flow, and also in calculations which start with the Terminal Value and depreciate the asset over the intervening years until one arrives at the Present Value. Can be used in calculations regarding a business, an index, a cash flow, or an asset. Horizon Value is a synonym, and is perhaps better suited to describe the way the calculation chooses a time horizon of a specific number of years, but otherwise uses the same numbers in an equation that will estimate the value if the business or index went on growing at the same rate into perpetuity. Continue reading...
What is Tier 1 Capital?
Tier 1 Capital are the core asset holdings of a bank. They are disclosed, liquid, risk-averse assets, and are used by regulators to evaluate a bank's compliance with capital requirements. Banks lend out about as much money as they can in general. They must have capital on hand to absorb losses and remain solvent. The Basel Accord is an international agreement dealing with capital reserve requirements for banks, enacted after the meltdown of 2008. Continue reading...
What is Time Value of Money?
The Time Value of Money is a theme for discourse and calculations related to the effect of interest on money over time, and the interrelation between Present Value and Future Value. The Time in the equation of Rate of Return x Time x Present Value = Future Value has a value and an effect on the Future Value (or the Present Value depending on what you're solving for). The Time Value of Money is, at it's simplest, something which nearly everyone has seen but hasn't heard called by that name: turn this amount of money into that amount of money by letting it grow in the market for a length of time. Continue reading...
What is an Unrealized Gain?
Gains and losses are only "real" when shares are sold or withdrawals are made, but up until that point the gains were more of a notional amount, and are said to be "unrealized." A more salient way to understand unrealized gains is to look at the opposite: unrealized losses. If a person makes an investment of $1,000 and the value of the shares drops sharply the next week, has the person lost any money? The answer of course is no, not unless he sells the shares and takes the lower market price for them. Continue reading...
What is an Uptick?
An uptick is an incremental increase in the trading price of a security. Uptick is a slight increase in the trading price of a security. The word comes from the "ticker price" of a stock, which used to be printed out on ticker tape from a printer connected to telecommunication lines which reported updates in trading information throughout the day. Now tickers run electronically across the bottom of television screens and so on. Continue reading...
What is an Uptrend?
An uptrend is a continuous upward movement in a stock's price. An uptrend is an upward movement over a few increments of time (whatever time increment being used), where the successive numbers being compared continue to increase. The parameters being compared might be just peaks, just troughs, closing prices, or averages, but formally it is defined as increased in successive peaks and troughs both. Continue reading...
What is Volatility?
Volatility is a measure of the variance, deviation, or movement of a stock. Volatility is all the extra movement of a stock or other security over and above (and below) a line of averages. Put another way, it is a measure of how many changes in price, and by how much, a security experiences over an amount of time. Computations of Standard Deviation and Variance are measures of the degree of volatility which exists in the movement of a stock. Volatility will also be measured relative to a benchmark index, and the degree to which a security adheres or deviates from the benchmark is called Beta. People will also trade on derivatives of the VIX, which is the volatility index of the S&P 500. Continue reading...
What is Volume?
Volume is a count of trades in a security or market, or their derivative instruments and can be indicative of trends and sentiment. Volume is the number of trades in a security or market in a given time. Trade volume is important because it helps analysts pick apart the factors driving a trend or get an idea of the strength of a trend. Potential buyers and sellers can push the Bid and Ask prices around at will, hypothetically, but a trade only occurs when the buyer and seller transact business; also, even only a minimal number of trades can move prices around, but this is not indicative of a strong trend — a few trades more and the price is where it was before. Continue reading...