Market Risk
This option strat involves buying a call and a put with the same strike and expiration. Is used when expecting a big move but unsure of the direction
Straddle
This vanilla option can be exercised ONLY at expiration.
Euro option
I am long vibes and short fundamentals - this phrase is used during bubbles or when trading this type of stock
Meme stock
This energy company's 2001 bankruptcy involved fake companies, earnings and real orange jumpsuits.
Enron
What was the name of the real-life firm that pumped and dumped penny stocks in the Wolf of Wall Street film?
Stratton Oakmont
This 2nd-order option Greek measures the rate of change of Vega with respect to the underlying asset's price.
Vanna
This fixed income security makes payments that adjust based on the rate of inflation
Inflation-linked bond or TIPS
This phrase describes a trader who refuses to sell no matter what.
Diamond hands.
FTX
Tulips
This statistical assumption in many VaR models breaks down during crises, leading to underestimation of tail risks.
Normality or Gaussian distribution assumption
This option's payoff depend on the average price of the underlying over time, NOT the terminal price.
Asian options
What is selling too early out of fear - the opposite of the question above.
Paper hands.
This company invested in the subprime mortgage market in 2003 after the US government had begun to deregulate consumer protection and derivative trading, which ultimately lead to its downfall. From a stock price of $172/share, it was bought out for $2/share.
Bear Stearns
If you type this 4-letter word in Bloomberg, it will reveal absurd jokes and memes.
BOOM
This term refers to losses that result when asset price volatilities increase and the correlations converge across asset classes in a crises.
Contagion risk
In FX markets, this option gives the holder the right to choose between 2 different currencies at maturity
Chooser or quanto option.
What is an all-in, high-risk position often justified with zero research and maximum conviction. Often on lotto Fridays.
Yolo trade.
This person tricked investors out of $64.8 billion through the largest Ponzi scheme in history.
Bernie Madoff
Oil futures.
This Greek is used in path-dependent options and is the sensitivity of Gamma to changes in the underlying price.
Charm or DgammaDspot
This is the PV of expected exposure weighted by default probability and loss given default (LGD) - used to quantify counterparty risk.
CVA (Credit valuation adjustment).
What is the temporary stock rally that tricks you into doubling down before it dumps again.
Dead cat bounce.
This Canadian telecom company collapsed due to a mix of the 2008 financial crisis, allegations over excessive executive pay, and demand for products dropping.
Nortel
In 2019, Kangmei Pharmaceutical overstated its cash holdings by $4.3B using this old school technique.
Photoshop