What Is the Bubble Theory?

The bubble theory is a theory that states that people’s perceptions of asset prices can become divorced from reality, leading to irrational exuberance and eventually a market crash. The theory is often used to explain why asset prices sometimes increase to unsustainable levels and then collapse. What happens after an economic bubble? An economic bubble … Read more

Currency Option.

A currency option is a type of option that gives the holder the right, but not the obligation, to buy or sell a specified currency at a specified exchange rate on or before a specified date. Currency options are used by currency traders to hedge against exchange rate risk, or to speculate on changes in … Read more