- Q -
pairs trading investment
A methodology that seeks to identify similar companies whose
securities are trading at a wide differential. The manager of
such a fund would assume a short position in the overvalued
security, while taking a long position in the undervalued one.
month to date (MTD)
Performance since the beginning of the month (i.e., the
relative performance for monthly P&L portfolios).
Performance of the portfolio since the creation date.
year to date (YTD)
Performance since the beginning of the year.
The term used in currency market to represent the smallest
incremental move an exchange rate can make. Depending on
context, normally one basis point (0.0001 in the case of EUR/USD,
GBD/USD, USD/CHF and .01 in the case of USD/JPY).
portfolio turnover rate
The rate of trading activity in a hedge fund or mutual fund,
expressed as a percentage of the portfolio's size, that is
bought or sold each year. Calculated by dividing the lesser of
purchases or sales by average assets during that year.
Transactions can open and close positions on a security.
The position relates to security transactions, it combines
purchases and sales of shares for a given security. The
combination is computed to follow a FIFO method, providing the
ability to measure the realized gain for the closed positions
and the unrealized gain for open positions that are marked to
market. The positions are liquidated at the redemption value
A broker who acts as settlement agent, provides custody for
assets, provides financing for leverage, and prepares daily
account statements for its clients, who are money managers,
hedge funds, market makers, arbitrageurs, specialists and
other professional investors.
Hedge funds establish prime brokerage relationships to
minimize operational and accounting-related issues and to curb
costs through consolidated financing, while maintaining the
benefits of executing with any number of brokers. When a fund
designates a prime broker, it instructs all its executing
brokers to settle its trades for cash with a single firm.
After the fund executes a trade, it reports the details to its
prime broker. The prime broker clears the trade, custodies the
securities, provides margin financing, lends stock to cover
short sales, and provides cash and position reports and