Techniques

What this video covers

• Why diversification substantially reduces unsystematic risk but can never eliminate systematic risk, and why over-diversification can dilute returns
• Which sectors lead during economic expansions versus contractions, and why defensive sectors are not defense or military companies
• How dollar-cost averaging (DCA) produces a lower average cost than average market price when prices fluctuate, and why it guarantees no profit or loss protection
• The difference between a protective put, a covered call, and a collar: which sets a firm floor, which merely provides a premium cushion, and which caps both ends
• Why Regulation T requires 50% initial margin while FINRA requires 25% minimum maintenance margin, and how leverage magnifies both gains and losses
• The three steps of a short sale, why unhedged short sales carry theoretically unlimited loss potential, and why daily reset inverse funds drift away from long-period inverse returns
• What high-frequency trading (HFT) provides during normal markets versus why its liquidity disappears under stress, and why it is never a retail client strategy