CNBC Explains: Markets

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Private equity is a way of doing business to make money for rather large investments of capital. So how does it work? CNBC explains.

There may be no better example of how fast things have become than by looking at high frequency trading in the markets. CNBC explains.

If a company or individual gets what's called a Wells notice from the Securities and Exchange Commission, they won't be very happy to say the least. But who might get one and what do the signify? CNBC explains.

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.

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.

A couple of devices that major exchanges use to stop manipulation or extreme volatility in the markets are called "limit up, limit down." CNBC explains what these are and how they work.

Witching hour may sound like a bar promotion on Halloween night, but it's really three important time periods for investors and the markets. So what are they and how do they impact investors? CNBC 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?

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.

If a company that's privately owned wants to go public and offer investors the chance to buy securities in the firm, one of the first things they do is something called a 'Roadshow.' CNBC Explains.

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, this is a central concept in finance theory, which takes into account factors such as interest rates and inflation.

Capitulation is a way to describe a surrender between armies, but it's also a form of 'giving up' on the stock market. So, what is capitulation when it's used on Wall Street? What does it signify? CNBC explains.

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.