TRADING BOOK
Accounting book which records all of the financial instruments held by a bank or brokerage. These instruments are either purchased or sold to process trading for the institution’s clients, to generate profit from spreads between bid and ask prices, or hedge against several trading risks. Trading books differ in size based on the amount of instruments an institution holds. Most institutions, especially larger ones, use complex risk metrics in regulating and mitigating risks.
POPULAR TERMS
Mature Economy
An economic situation where the birth rate is stable or lower than mortality rate, as well as the pace of economic growth has slowed down. It is ch ...
Blackberry Addiction
Colloquial term for overreliance or overuse of Blackberry. The smartphone is manufactured by Research in Motion. It is a prevailing condition for s ...
Completed Contract Method - CCM
Accounting method allowing a taxpayer or business to defer reporting of income and expenses until the contract has been completed. Frequently, this ...
Choice Market
Market in which the spread between the bid and ask prices for a particular financial instrument is zero. Meaning the instrument can be purchased fo ...
Rational Pricing
A theory that states the prices that reflect a security’s fundamental value and the absence of arbitrage opportunities.
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Inflation and Investments
“How does inflation affect my investments?”
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