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Omega is a function of a threshold. The returns above this
threshold are considered as gains, while the returns below the
threshold are considered as losses. Omega is then the ratio of
the gains weighted by their probability of occurrence divided
by the losses weighted by their probability of occurrence. The
larger the omega, the better the performance.
The risk that investment losses will result
from factors other than market risk, credit risk, or liquidity
risk, etc., but due instead to such things as employee fraud or misconduct, errors in models, incorrect or incomplete documentation of trades
or man-made disasters.
A strategy that seeks to produce the greatest possible
returns by assuming long-term positions in the most-efficient
products at a given time. Such funds may hold a variety of
investments including stocks, bonds, options, warrants, and distressed
securities and which often pursue long/short investment
A contract that gives parties the right to buy, or sell, a
specific asset or security at a specified strike price by a
pre-set date. It falls under the derivatives category and
comes in the form of calls (options to buy) and puts (options
to sell). The cost of an option is generally a fraction of the
cost of its underlying security.
options arbitrage investment
An investment style that seeks to exploit pricing differentials
between similar option contracts or between the price of an
option contract and its associated securities.
options investment strategy
Any of a number of approaches in which the manager invests in