Business is war.
Insurance companies make money by taking on risk for a price. They agree to pay if something bad happens, like a car crash, fire, or lawsuit. The insurer charges a premium and hopes the bad thing won’t occur. If it does, they pay the claim using the premiums collected from many customers. This process is…
Candlestick charts are a way to show how the price of something, like a stock or currency, changes over time. They got their name because the rectangles on the chart look a bit like candles. What are candlesticks? Each candlestick shows important price information for a certain time period. This could be one day, one…
A cancellation provision clause is something that’s in a lot of different insurance policies, like for your house or your car. It’s a part of the contract between you and the insurance company. What it does is it gives you the right to tell the insurance company “hey, I don’t want this insurance policy anymore”…
A cancellable swap is a special kind of swap deal. A swap is when two groups agree to trade something, like money, with each other. They decide ahead of time exactly how they will do the trade in the future. What makes a cancellable swap different is that the two groups can decide later to…
A callover price is the price of something decided during a ring trading session. Ring trading is when traders meet in person to buy and sell things. They shout out prices until everyone agrees on a final price. This final price is called the callover price. The callover price becomes the official price that gets…
A callable swap is a type of swap. Swaps are deals between two groups. They agree to exchange, or “swap”, one thing for another in the future. Often what they swap is cash flows. Cash flows are money that comes in or goes out. The two main types of cash flows in a swap are…
A callable bond is a special kind of bond. The company or government that issued the bond can “call” it. This means they have the right to pay back the money they borrowed early, before the bond is supposed to mature. Why would they want to do this? Let’s say the bond has a high…
A callable asset swap is a special type of financial product. It is made up of two main parts: The callable swap part lets the seller buy back the bond later if they want to. They can buy it back for a set price. This set price is called the strike credit spread. How does…
A call spread is something people do with stock options. It’s when you buy one kind of option called a “call” and sell another kind of call option at the same time. The two call options you get have the same expiration date. That means they both end on the same day. But here’s the…
Call risk is a thing that can happen with some bonds. A bond is when a company or the government borrows money from people and pays them back later with extra money called interest. Some bonds have a special thing called a “call”. This means the company that made the bond can decide to pay…
