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         Long
         Short
         Eurodollar
         Demand Deposits
         Time Deposit
         Term Structure Risk
         Base Point


Long

Means you own an asset/stock. Quite simple. You have bought it with a view to selling it in the future.

Short

It is to specifically short sell - borrow stock specifically to sell high straight away and buy back at a cheaper cost. You are in debt to the person you have borrowed stock from, in a negative or 'short' position. So even though you have sold something you are in debt so are still in the equasion - numbers still on your books. For example, an investor who borrows shares of stock from a broker and sells them on the open market is said to have a short position in the stock. The investor must eventually return the borrowed stock by buying it back from the open market. If the stock falls in price, the investor buys it for less than he or she sold it, thus making a profit.

Eurodollar

Misnomer - it is not specific to european banks as it originally was. Eurocurrency is the general term for any currency deposited in bank branches outside countries where it is the national currency. Eurodollar is therefore dollars deposited in any banks outside of the U.S. EuroStirling, EuroEuro, EuroBaht etc etc...

Demand Deposits

Deposit that can place with a bank for no specific maturity. The money can be withdrawn at any time without penalty.

Time Deposit

A time deposit has a fixed maturity, and there is a penalty for early withdrawal.

Term Structure Risk

(also called yield curve risk or repricing risk) - Arises when there is a difference between the maturity of the product and the term for a fixed rate used in the product. For example the maturity could be 10 years but a fixed rate term ends at 2 years meaning a new rate will have to be got - this will effect the yield curve.

Base Point

1 bp = 0.01%
10 bp move = 0.10%

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