Throughout the history of free markets, traders have made money through arbitrage, a tactic that takes advantage of price differences to make risk-free profits. Salman Khan of the Khan Academy describes how arbitrage works in a simple example.
One of the culprits blamed for the financial chaos of 2008-2009, were collateralized debt obligations. Like any derivative, the value of a CDO is based on an underlying asset. Khan of the Khan Academy explains.
Credit default swaps, also known as CDS, act as insurance against default, but these financial instruments are actually used in a number of complex ways. How are credit default swaps employed, and what is the rationale for these securities?
Fair value is a tool used by investors to understand the relationship between the value of futures contracts and the current price of a stock. The term is used in pre-market hours to help forecast the direction of the market.
Buying a home is usually the biggest individual investment people make in their lifetime and more often than not, a mortgage is involved. With such large sums of money involved in the mortgage market, financial firms profit by using a type financial instrument called mortgage-backed securities, or MBS.
The general rule in economics is that the value of money today will not be equal to the same amount of money in the future. Also known as the time value of money.
Today's a witching day. It may sound ominous, but it's really just the alignment of some important time periods for the markets. CNBC explains ....
Americans often check their receipts to make sure they've bought everything they need, and probably to see if what they paid this time is any different from the last trip. The government does the same with the Consumer Price Index. Here are the details.
The producer price index is a key economic measurement especially when it comes to inflation.
A stock correction may seem like something is getting 'fixed' on Wall Street, but usually it's a trigger for financial losses. So what is a correction? CNBC explains.
Trader Nation is not simply about finding that next trade -- it is a place where traders trade better together.
Inside the market's biggest sectors with a look at the trends, companies and trades netting profits for investors.
CNBC 'Explains' the complicated economics of our world—from stocks and balance sheets, to trade and public policy.