Investments & Financial Planning

Bullion coins are metal coins consisting of gold, silver, platinum, or palladium that are actively traded on exchanges. Some examples include the American eagle and the Canadian maple leaf. Their price is directly connected to the underlying price of their metal.

Butterfly spread strategy applies to derivative products. It is a complicated option strategy that involves selling 2 calls and buying 2 calls on the same or different markets, with several maturity dates. One of the options has a higher exercise price and the other has a lower exercise price than the other 2 options. The payoff diagram resembles the shape of a butterfly.

The COMEX is a division of the New York Mercantile Exchange (NYMEX). It was formerly known as the Commodity Exchange. The COMEX is the leading United States market for metals futures and options trading.

The Canadian Exchange Group is an association among the Montreal Exchange, the Toronto Stock Exchange, the Vancouver Stock Exchange, the Alberta Stock Exchange, and the Winnipeg Stock Exchange for the purpose of providing Canadian market data to customers outside Canada.

Leveraged buyout is a strategy used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as junk bonds or high yield bonds. Investors can participate in an leveraged buyout through either the purchase of the debt (purchase of the bonds or participation in the bank loan) or the purchase of equity through an Leveraged buyout fund that specializes in such investments.

Index is a statistical composite that measures changes in financial markets or in the economy, They are often expressed in percentage changes from a base year or from the previous month. Indexes measure the ups and downs of stock, bond, and some commodities markets, in terms of market prices and weighting of companies the index.

Financial pyramid risk structure is a structure that spreads investor's risks across low, medium, and high risk vehicles. The bulk of the assets are in safe, low risk investments that provide a predictable return which represent the base of the pyramid. At the top of the pyramid are a few high risk ventures that have a modest chance of success.

The Discount rate is the interest rate that the Federal Reserve charges a bank to borrow funds when a bank is temporarily short of funds. Collateral is necessary to borrow, and such borrowing is quite limited because the Federal reserve views it as a privilege to be used to meet short term liquidity needs, and not a device to increase earnings.