Similar financial termsPositive convexity
A property of option-free bonds whereby the price appreciation for a large upward change in interest rates will be greater (in absolute terms) than the price depreciation for the same downward change in interest rates.
A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points.
Active portfolio strategy
A strategy that uses available information and forecasting techniques to seek a better performance than a portfolio that is simply diversified broadly. Related: passive portfolio strategy.
Structured portfolio strategy
A strategy in which a portfolio is designed to achieve the performance of some predetermined liabilities that must be paid out in the future.
Stock replacement strategy
A strategy for enhancing a portfolio's return, employed when the futures contract is expensive based on its theoretical price, involving a swap between the futures, treasury bills portfolio and a stock portfolio.
Spreading is a strategy that involves a position in one or more options so that the cost of buying an option is funded entirely or in part by selling another option in the same underlying.
A strategy of introducing into the decision-making process a random element that is designed to reduce the information content of the decision-maker's observed choices.
Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is held in a portfolio.
Passive portfolio strategy
A strategy that involves minimal expectational input, and instead relies on diversification to match the performance of some market index. A passive strategy assumes that the marketplace will reflect all available information in the price paid for securities, and therefore, does not attempt to find mispriced securities.
Takeover defense strategy in which the prospective acquiree retaliates against the acquirer's tender offer by launching its own tender offer for the other firm.
A strategy of using futures for asset allocation by pension sponsors to avoid disrupting the activities of money managers.
A bond portfolio strategy in which the portfolio is constructed to have approximately equal amounts invested in every maturity within a given range.
A strategy in which the maturities of the securities included in the portfolio are concentrated at two extremes.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly concentrated at one point on the yield curve.
A passive investment strategy with no active buying and selling of stocks from the time the portfolio is created until the end of the investment horizon.
A strategy in which a put and with the same strike price and expiration are either both bought or both sold.
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor owns in his or her portfolio. See covered or hedge option strategies.