The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants

By Dr. David Edward Marcinko; MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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Quant & Statistical Concepts

• Alpha Decay — Strategy alpha erodes as it becomes crowded.
• Beta Drift — Asset beta changes over time, altering risk exposure.
• Heteroskedasticity — Volatility varies across time.
• Autocorrelation — Returns correlate with their own past values.
• Cointegration — Two series share a stable long‑run relationship.
• Stationarity — Statistical properties remain constant over time.
• Regime Shift — Market behavior transitions to a new structural state.
• Volatility Clustering — High‑volatility periods follow high‑volatility periods.
• Fat Tails — Extreme events occur more often than normal distributions predict.
• Kurtosis — Measures tail heaviness of a distribution.
• Skewness — Asymmetry in return distribution.
• Noise Trader Risk — Irrational flows distort prices.
• Overfitting — A model captures noise instead of signal.
• Look‑Ahead Bias — Using information that wasn’t available at the time.
• Survivorship Bias — Excluding failed entities from analysis.
• Data‑Snooping Bias — Repeated testing inflates false discoveries.
• Factor Crowding — Too many investors chase the same factor.
• Dispersion — Variation in individual stock returns relative to the index.
• Cross‑Sectional Momentum — Ranking assets by relative performance.
• Volatility Regime Shift — Markets switch between low‑ and high‑vol regimes.

Derivatives & Options

• Gamma Exposure — Dealer hedging flows that amplify moves.
• Vanna — Sensitivity of delta to volatility.
• Charm — Delta decay over time.
• Vomma — Sensitivity of vega to volatility.
• Vega Risk — Exposure to changes in implied volatility.
• Theta Decay — Time‑value erosion of options.
• Delta Hedging — Offsetting directional exposure.
• Cross‑Gamma — Hedging one option affects exposure to another.
• Volatility Surface — Implied vol across strikes and maturities.
• Skew Trading — Trading asymmetry in implied vol.
• Term Structure of Volatility — How implied vol varies by maturity.
• Local Volatility — Vol as a function of price and time.
• Stochastic Volatility — Volatility itself follows a random process.
• Volatility Risk Premium — Compensation for selling vol.
• Variance Swap — Pure exposure to realized volatility.
• Gamma Scalping — Harvesting volatility via dynamic hedging.
• Sticky Strike — Implied vol stays tied to strike.
• Sticky Delta — Implied vol stays tied to delta.
• Smile Dynamics — How vol smile shifts with spot moves.
• Jump Diffusion — Price evolves with both continuous moves and jumps.

Macro & Rates

• Term Premium — Extra yield for holding long‑dated bonds.
• Shadow Rate — Theoretical rate when policy hits zero.
• Duration Gap — Mismatch in interest‑rate sensitivity.
• Real Yield — Yield adjusted for inflation.
• Breakeven Inflation — Market‑implied inflation expectation.
• Carry Trade — Earning yield differentials.
• FX Basis — Deviation from covered interest parity.
• Macro Duration — Sensitivity to macroeconomic shifts.
• Liquidity Trap — Monetary policy loses effectiveness.
• Reflation Trade — Positioning for rising inflation and growth.
• Stagflation — High inflation + low growth.
• Yield Curve Control — Central bank caps long‑term yields.
• Term Structure Inversion — Short‑term rates exceed long‑term.
• Quantitative Tightening — Central bank balance‑sheet reduction.
• Dollar Smile — USD strengthens in extremes.

Risk & Portfolio Construction

• Risk Parity — Equalizing risk contributions.
• Vol Targeting — Adjusting exposure to maintain constant vol.
• Tail Risk — Exposure to extreme events.
• Drawdown — Peak‑to‑trough decline.
• Expected Shortfall — Average loss beyond VaR.
• Stress Beta — Beta during crisis periods.
• Liquidity Premium — Extra return for illiquid assets.
• Crowding Risk — Too many investors in the same trade.
• Fire‑Sale Externality — Forced selling depresses prices.
• Liquidity Spiral — Falling prices reduce liquidity, causing more declines.
• Systemic Risk — Risk that threatens the entire system.
• Correlation Breakdown — Relationships fail under stress.
• Idiosyncratic Volatility — Stock‑specific volatility.
• Tracking Error — Deviation from benchmark.
• Information Ratio — Alpha consistency.
• Portfolio Convexity — Sensitivity of duration to rate changes.
• Volatility Harvesting — Rebalancing to capture mean‑reverting vol.

Market Microstructure

• Market Microstructure Noise — Distortions from order flow and spreads.
• Order Imbalance — Excess buy or sell pressure.
• Latency Arbitrage — Exploiting speed advantages.
• Toxic Flow — Informed order flow that harms liquidity providers.
• Quote Stuffing — Flooding markets with orders to slow competitors.
• Dark Pools — Private trading venues.
• Slippage — Execution price deviates from expected.
• Market Impact — Price moves caused by your own trades.
• Tick Size Constraint — Minimum price increment distorts liquidity.
• Order Book Depth — Liquidity available at each price level.

Alternative Assets & Exotic Concepts

• Synthetic Leverage — Leverage via derivatives.
• Reflexivity — Prices influence beliefs, which influence prices.
• Shadow Banking — Credit creation outside banks.
• Basis Trade — Exploiting futures vs. spot mispricing.
• Roll Yield — Gains/losses from moving along futures curve.
• Contango — Futures above spot.
• Backwardation — Futures below spot.
• Storage Arbitrage — Profit from storing physical commodities.
• Convenience Yield — Non‑monetary benefit of holding physical goods.
• Real Asset Duration — Sensitivity of real assets to macro shifts.
• Volatility Carry — Earning the difference between implied and realized vol.
• Jump Risk — Exposure to sudden price gaps.
• Mean Reversion — Prices revert to long‑term averages.
• Momentum Crash — Trend strategies fail violently.
• Risk-On/Risk-Off — Broad shifts in risk appetite.

COMMENTS APPRECIATED

EDUCATION: Books

SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR- http://www.MarcinkoAssociates.com

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HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731

CLINICS: http://www.crcpress.com/product/isbn/9781439879900

ADVISORS: www.CertifiedMedicalPlanner.org

FINANCE:Financial Planning for Physicians and Advisors

INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors

Dictionary of Health Economics and Finance

Dictionary of Health Information Technology and Security

Dictionary of Health Insurance and Managed Care

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