Strait of Hormuz

A strategy of borrowing in low-interest-rate Japanese yen to fund positions in higher-yielding foreign assets.

so basically: Borrow cheap Japanese money, bet it elsewhere, pocket the difference. Until it unwinds.

The 4,600-upvote ELI5 thread of the month, thanks to the yen crashing.

Simultaneous purchase and sale of equivalent assets across markets to exploit price discrepancies.

so basically: Buy it where it's cheap, sell it where it's not. Free money, briefly.

A prolonged decline of 20% or more from recent market highs, accompanied by pervasive pessimism.

so basically: Everything's down and everyone's sad.

The effective annual return on a debt security, inversely related to its market price.

so basically: What lending your money actually pays. When it jumps, someone's scared.

Interest computed on both the initial principal and previously accumulated interest.

so basically: Your money makes money, then THAT money makes money.

Allocation of capital across uncorrelated assets to reduce exposure to idiosyncratic risk.

so basically: Don't put all your eggs in one basket, with math.

Exchange-Traded Fund: a pooled investment vehicle holding a basket of assets, traded intraday on exchanges.

so basically: A bundle of stocks you buy in one click.

A party legally obligated to act in the best interest of another, subordinating their own interests.

so basically: An advisor who is legally required to not screw you.