BusinessAugust 30, 2026
convexity
kon-VEK-si-tee
Definition
In finance, a measure of how the duration of a bond or portfolio changes as interest rates fluctuate, often used to describe instruments that profit from large market swings.
Etymology
Derived from the Latin 'convexus', meaning vaulted or arched. It entered English in the 16th century to describe curved shapes before being adopted by mathematics and finance to denote non-linear relationships.
In the news
The article uses the term to describe how traditional asset managers view specific hedging strategies as a form of insurance. It serves as a contrast to the subjective nature of trader psychology.
Debate continues over value of trading psychology, Kris Sidial notes
Read the full article ↗Traders Union