Derivatives are financial instruments whose value is derived from an underlying asset, such as stocks, bonds, commodities, currencies, or interest rates. Derivatives play a crucial role in financial markets by allowing participants to hedge risks, speculate on price movements, or gain access to markets with minimal capital outlay. Among the
Bonds are debt securities that represent a loan made by an investor to a borrower, typically a corporation, government, or other institution. In exchange for the loan, the borrower agrees to pay periodic interest payments (known as coupons) and repay the principal amount (or face value) when the bond matures.
Stocks, also known as equities, are one of the most fundamental and widely traded financial instruments in global markets. They represent ownership in a corporation, providing investors with claims to part of the company's assets and earnings. Stocks are a cornerstone of capital markets and play a critical
Financial markets can be broadly categorized into two main segments: primary markets and secondary markets. Both play a crucial role in the functioning of the overall financial system, but they serve distinct purposes in terms of capital formation, liquidity, and the trading of financial instruments. 1.2.1. Primary Markets
Financial markets are platforms where financial instruments such as equities, bonds, derivatives, and currencies are traded. These markets play a critical role in the global economy by facilitating the allocation of capital, allowing for risk management, and enabling price discovery. Below is a detailed overview of the key financial markets.
One of the fascinating topics gaining traction in Quantitative Finance is Optimal Execution with Almgren-Chriss Model. This model helps large institutional traders minimize the trading cost associated with executing large orders by balancing market impact and price uncertainty. Here's an overview, the mathematical formulation, and a Python code
One of the interesting and newer developments in Quantitative Finance is Stochastic Volatility Modeling. One of the prominent models is the Heston Model, which introduces a stochastic process for the volatility of an asset. Unlike the Black-Scholes model, where volatility is constant, the Heston model assumes volatility itself follows a
In Quantitative Finance, one of the interesting and newer areas of exploration is Stochastic Portfolio Theory (SPT), which provides a framework for analyzing the performance and behavior of portfolios in markets where assets follow stochastic processes. This approach emphasizes portfolio diversity, market structure, and stability, offering insights into the growth
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric used to assess a company's operating performance by focusing on profitability from core business activities, excluding the effects of capital structure (interest), tax expenses, and non-cash accounting items (depreciation and amortization). Here'
The main difference between quantitative and qualitative research is kinda... in the name itself, right? Quantitative, it’s all about numbers and stuff—like, stats, graphs, percentages. You know, measurable things. It's basically like, uh, if you can count it or measure it somehow, it's quantitative.
Oh yeah, so if you wanna be, like, a Quantitative Researcher, you’re gonna need a bunch of skills. Like, obviously, uh, math is a big one. I mean, you kinda have to love math, right? 'Cause you'll be, like, doing tons of it. Statistics, calculus, linear
Okay, so like... a Quantitative Researcher? Or just Quant. Uh, they're basically someone who, y'know, works with numbers. Lots of numbers. They’re, like, super into data and statistics and all that stuff. So, they take a bunch of data—could be financial data, market trends,