Market Basics
What is a stock?
Ownership share in a company.
What is the Fed’s dual mandate?
Maximum employment and stable prices.
What is a call option?
Right to buy an asset at a set price.
What is a stop-loss order, and why do traders use it?
It’s an order that automatically sells a position if the price drops to a set level, limiting downside risk.
Which semester was HTC Founded?
Fall '23
What does market capitalization represent?
The total market value of a company’s outstanding shares (price × shares outstanding).
What is the safest type of security to buy?
US Treasuries
What does “theta” measure?
Rate of time decay in an option’s value.
What is arbitrage, and why is it rare in efficient markets?
Arbitrage is a risk-free profit from price discrepancies between identical or similar assets; it’s rare because competition and technology quickly eliminate mispricings.
What was last semester’s winning trade pitch?
$ONON
What does a negative beta imply?
Asset moves opposite to the market (e.g., gold or volatility instruments).
What does real GDP adjust for that nominal GDP does not?
Inflation — real GDP measures output using constant prices to show true economic growth.
What does "delta" measure?
Delta measures how much an option’s price changes in response to a $1 change in the price of the underlying asset.
What is momentum trading, and how does it differ from mean reversion?
Momentum: buying winners/selling losers expecting trends to continue. Mean reversion: betting prices will return to average levels after deviations.
What is the largest holding in our portfolio?
Gold
What is the equity risk premium?
The excess return investors expect for holding stocks over risk-free assets.
What is the 10-year yield at today?
3.975%
Why can deep-in-the-money call options have delta slightly below +1 even when intrinsic value ≈ stock price?
Because there’s still a small probability of expiring out-of-the-money; time value means delta approaches but doesn’t reach +1 until expiration.
Describe how a volatility-selling strategy (e.g., shorting VIX or options) generates returns — and what risk it carries.
It profits from collecting option premiums (implied > realized volatility) but carries tail risk — large losses when volatility spikes during market stress.
What are the names of the founders of HTC?
Matteo & Cristian
What is the difference between systematic and unsystematic risk?
Systematic risk affects the entire market (can’t be diversified away); unsystematic is firm-specific (can be diversified).
Explain how quantitative easing (QE) affects asset prices and the money supply transmission mechanism.
QE injects liquidity by buying long-term securities, lowering yields and risk premiums; this raises asset prices, compresses credit spreads, and stimulates spending via wealth and portfolio-rebalancing effects.
What is gamma risk?
The rate at which delta changes — exposure increases near-the-money.
Explain how a delta-neutral strategy works.
Balancing long/short positions so net delta ≈ 0; profit comes from volatility or secondary Greeks.
Who is the faculty advisor for HTC?
Dr. Dolinsky