volatility drag

English

Noun

volatility drag (countable and uncountable, plural volatility drags)

  1. (informal, finance) A negative impact on the compound returns from a leveraged investment product caused by an underlying reference value being regularly reset so that to cover any loss in value the appreciation in proportion to it needs to be larger.
    Synonyms: variance drain, volatility tax, volatility decay

Descendants

  • → French: volatility drag
  • → German: Volatilitydrag, Volatility Drag, Volatilitätsdrag
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