Sentences with phrase «when volatility increases»

When volatility increases, even the most seasoned trader can make mistakes.

Having a comprehensive financial plan which leads to clearly identified investment objectives and risk tolerance can provide the comfort and clarity you need to avoid making critical mistakes when volatility increases (which it inevitably will).

Liquidity risk High yield bonds that may have been easy to buy or sell when market conditions were calm can suddenly become very difficult to sell when volatility increases.

When volatility increased in February, some investors viewed this as a buying opportunity.

Not exact matches

That puts three hikes barely in play, though continued bouts of volatility likely will put even more pressure on the Fed, which almost never surprises the market when it comes to rate increases.

In a guest post in The High Frequency Trading Review, Narang freely admits that «there has been an increasing incidence, in recent times, of days exhibiting unusually high volatility (measured as days when the close - to - close return, or alternatively, the high - low trading range are large in magnitude).»

As a result, it is now clear that the U.S. is in the latter stages of the multi-year credit cycle, a period when rising corporate leverage negatively affects returns to corporate debt as investors demand higher risk premiums to compensate for the greater volatility created by increased leverage.

When financial market volatility increases, investors tend to gravitate toward what they perceive to be the safest assets.

In times of increased volatility a trader must widen their stops thus increasing the levels of risk they must assume when taking a trade.

When markets decline, they often do so rather quickly leading to an increase in volatility, which in turn increases option premiums.

As liquidity diminishes, investors may be unable to increase exposure when financial markets dip, and that could lead to a rise in volatility.

There's a downside, though: When a big economic shock like Brexit occurs, some economic indicator has to move in order to reflect the increased volatility and uncertainty.

As Baupost Group's Jim Mooney warned last week: «Low volatility would not be a problem if not for strategies that increase leverage when volatility declines.»

When we apply the 10 month moving average system to the Emerging Markets version (EEM / SHY / TLT / GLD), we see the same impact, a decrease in returns and volatility and an increase in the portfolios sharpe ratio:

When we test the 10 month moving average system we see is that the moving average system decreased volatility and returns while increasing the sharpe ratio:

The appeal increases when you consider that dividend - growth companies tend to be of higher quality and lower volatility than the broader stock market.

«When you're looking to trade ETFs, especially in times of increased volatility, consider the market cap and bid - offer spread and approach any ETF that is new to the market with a fair dose of skepticism,» he says.

However, when equity market volatility increases to a point that makes us uncomfortable, it is often this stable part of our portfolio that quells the inclination to make rash decisions, allowing us to stick with our asset allocations when times get tough.

However, this dynamic has flipped when volatility was increasing.

The point is that, when including the G Fund, duration can be increased in the bond portfolio for a greater expected return yet with similar volatility.

Many of the fixed income investors I talk to feel that they are caught between a rock and a hard place — trying to hedge their bets amid volatility, but punished on the yield side and incurring increasing interest rate risk when they play it safe.

Hedging worked well in the mid-2000s and other periods when the Canadian dollar rose dramatically, but over the long term it causes a drag on equity returns and may even increase a portfolio's volatility.

Short ProShares should lose value when their market indexes rise; and they entail certain risks, including, in some or all cases, aggressive investment techniques, inverse correlation and market price variance risks, all of which can increase volatility and decrease performance.

When we apply the 10 month moving average system to the Emerging Markets version (EEM / SHY / TLT / GLD), we see the same impact, a decrease in returns and volatility and an increase in the portfolios sharpe ratio:

Tom Preston: Gamma increases when the option is at the money, the option is close to expiration or volatility is low

Much like our Asian equity ETF example above, the ETF didn't increase the volatility of the local market, it just showed you where that market was valued even when it was closed.

The appeal increases when you consider that dividend - growth companies tend to be of higher quality and lower volatility than the broader stock market.

Short ProShares and ProFunds should lose value when their market indexes rise, and they entail certain risks, including, in some or all cases, aggressive investment techniques, inverse correlation and market price variance risks, all of which can increase volatility and decrease performance.

Short ProShares and ProFunds should lose value when their market indexes rise, and they entail certain risks, including, in some or all cases: aggressive investment techniques, including the use of futures contracts, options, forward contracts, swap agreements and similar instruments; inverse correlation; and market price variance risks, all of which can increase volatility and decrease performance.

SmartRisk ™ is a tactical asset allocation approach that automatically de-risks portfolios when markets are threatening (high volatility) and increases risk when volatility is low.

What are we to do then, when increased volatility enters the market as it has lately?

A lot of this can go out the window though when increased fear and volatility enters the market which leaves many hesitant to actively invest.

I do think we're in for some volatility with this rate increase stuff, so I want to be ready to buy some bargains when they become available.

If you sell when implied volatility is high, you increase the premiums you make on the option.

Why give up the incremental annual return that irrational volatility can provide, particularly when even small increases in annual returns can have a big impact on compounding and long term returns?

Stock traders who have been using approaches that assume low - volatility conditions will persist indefinitely (e.g., shorting VIX futures, selling option premium, or simply increasing long position size) need to be prepared for a changing of the market guard — or risk getting crushed when volatility doesn't immediately retreat after its next upward spike.

I recommend waiting because it is better to avoid iron - condor risk when we do not know whether the current period of increased volatility is just beginning.

As a result, a strategy that reduces exposure in periods when volatility is high and increases exposure in periods when volatility is low would be more likely to outperform in risk - adjusted terms over the long run.

Short ProShares should lose value when their market indexes rise and they entail certain risks, including, in some or all cases, aggressive investment technique, inverse correlation, leverage, market price variance and short sale risks, all of which can increase volatility and decrease performance.

Short ProShares ETFs are non-diversified and should lose value when their market indexes or benchmarks rise — a result that is opposite from traditional ETFs — and they entail certain risks including risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance.

As such, when the stock market starts to fall, option volatility tends to increase — often rapidly.

The aim is to keep portfolio risk constant by reducing it when market volatility rises and to increase portfolio risk when volatility falls (hence their term of DCR, which stands for Dynamic Constant Risk).

Generally, an investment with high volatility is said to have higher risk since there is an increased chance that the price of the security will have fallen when an investor wants to sell.

International investing including emerging markets involves a greater degree of risk and increased volatility that is heightened when investing in emerging markets.

Proper asset allocation works by reducing portfolio volatility and / or increasing long term returns when non-correlated asset categories are combined.

NDD brokers make their money either by increasing the spreads when there is increased volatility, or by charging commissions.

Mr Cottee, a former Queensland Gas Company executive who also ran Queensland state generator CS Energy when it built three baseload power plants, said Liddell's closure would increase volatility and prices.

Mitsubishi Corporation group CEO Hiroshi Sakuma said his company believed energy storage will become a «key factor» in helping renewable energy resources contribute to a «low - carbon society», particularly in reducing the volatility of energy supply, which increases when intermittent sources like wind and solar are used.

Warsaw, 28.03.2018 — Increased volatility on financial markets is putting pressure on company management teams when setting...

When the markets decline and volatility increases, many risky strategies go south quickly.