SuperDerivatives, an option pricing, trading and risk management company, has added a glossary of funky financial terms to its website.
Euromoney, as always, welcomes this addition to the educational tools available to the financial markets. SuperDerivatives’ glossary explains everything you ever needed to know about financial terms, from accumulator forward out one-side options to zero cost strategies.
But, in a lighter moment, our eagle-eyed hacks came across an alternative glossary that cuts through the defining maze and gets to the heart of what capital markets are all about. Here are a few definitions that might assist your understanding of the market and of a couple of our features this month:
Broker: Anyone who drinks more than you do.
Credit analyst: Someone who spent 2004 telling you why General Motors would hang on to its investment-grade rating, and will spend 2006 telling you why bankruptcy is inevitable for the company (see credit analyst poll: Analysts see the upside of a downturn).
Hybrid bonds: Debt securities that allow fixed-income money managers to earn a smidgen of additional yield by taking on equity-type risks with no prospect of equity-sized returns [see Why corporate hybrids are not all they’re dressed up to be, this issue].
Journalist: Second only to brokers in the drinking stakes. Someone who has never traded a security, can barely do long division, isn’t licensed by anyone, was rejected by every investment bank graduate trainee programme, yet still bitches about how much money you guys get paid.
Rating agencies: Self-appointed alphabet-soup chefs. Companies pay them to ladle out credit ratings, which give investors a snapshot of a borrower’s financial health at a particular moment in time, usually six to nine months ago [see EEMEA news section].
The definition of an investment banker was, we fear, inappropriate for a family financial magazine such as Euromoney.
