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algo n.— «Powerful algorithms—“algos,” in industry parlance—execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and...
synthetic short n.— «At a time when traders would normally have shorted the stock as part of the trade, they’re instead bypassing the rising cost of doing so by assembling what are called “synthetic shorts.” In case you’re not familiar...
zirp n.— «The United States is repeating a Japanese experiment with a zero in one of the most important variables in financial markets: the official overnight interest rate. The so-called zirp, an acronym for zero interest-rate policy, is...
back up the truck v. phr.— «The safety of these securities caused financial firms to load upon on them (“back up the truck,” in Wall Street parlance). They were considered so safe that financial firms used borrowed funds to buy more, and...
tail risk n.— «“Tail risk,” as it is known to quantitative traders, for where it falls in a bell-shaped probability curve. Tail risk, broadly speaking, is whatever financial cataclysm is believed by markets to have a 1 percent chance or...
toxic waste n.— «Basis Capital had assets worth $1 billion as recently as May, before reporting that its Aust-Rim Fund and Yield Fund lost 9 percent and 14 percent, respectively, in June. The funds ran into trouble by investing in the...