CBS’s Showtime TV series ‘Billions’ is back, and it is a wild ride. A must-see for any trader, this show might become your guideline to the Forex slang and main events that might happen any day in the daily life of a Forex broker (some extreme situations excluded, it’s a work of fiction, after all).
‘Billions’ is a story of Bobby Axelrod, a hedge fund king, and his daily fight for success (including legal battles). Is it the most accurate representation of all Forex traders? Probably not. But does this show teach us important things we can use in our trading? Oh, yes, definitely.
If you are watching this show for the first time or you are relatively new to the world of Forex, some terms might be extremely confusing and hard to understand, so let’s take a quick review of the most basic terms you will hear throughout this show.
Billions from A to Z
Alpha: the excess return that a hedge fund gets. You use it to see how well a fund manager performs.
Blue-chip: the most stable companies with an impeccable reputation, known for their stability.
Cut bait: selling all the losing positions and making room for new, potentially much more successful investments in your portfolio.
Dead cat bounce: brief stable point in the price of a declining stock, followed by a downtrend.
Expense account: corporate account used to pay the company’s employees who used their own funds while conducting business.
Family office: a private company that manages the funds of a person, their family and, possibly, of their company’s employees.
Hedge funds: a pool of funds gathered from a high net worth investors used to create a portfolio managed by a tried-party company.
IPO: an initial public offering. When a company goes public for the first time, its shares are available to the public to raise capital.
Lock-up period: a timeframe within which investors cannot sell their shares. This period may last 3 months or longer.
Mosaic theory: an investment method that suggests gathering and analysis of information from different sources to create a strategy for investment.
Non-solicitation agreement: a contract and employee of a hedge fund signs that prevents them from soliciting clients or investors in case of contract’s termination.
Prime broker: an investment bank that offers services to the hedge fund.
Quant funds: an investment fund where statistics is preferred over human analysis.
Rally: an increase in the price of a security over a specific time period.
Spinoff: the new company created after a split of a previous one.
Takeover: buying a majority stake of a company to get full control of it.
Window dressing: selling losing stocks and purchasing strong stocks before the quarterly financial statements. Often used as a deceiving strategy.
‘Billions’ gives us a glimpse of what a life of biggest investors and fund managers is, but it also gives us a chance to learn new things in a fun and entertaining way, so, basically, it’s a win-win situation. Don’t miss the 5th season premiere on May 3, 2020.