AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

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Glossary

AIMA's Glossary has been developed for all those with an interest in the alternative investment industry - from the beginner to the advanced practitioner.

You will find a considerable overlap of content with the traditional fund management industry - the instruments used, the service providers employed, etc.  However, the hedge fund industry is individual in the way in which it uses these resources.

For reasons of law and accuracy, this is not a wiki.  It is a work-in-progress, however, and we invite you to submit new items for inclusion below (including the proposed definition).

  • We express our sincere thanks to Stanley Marchon, Vincent Kuhn, Nicolas Watin-Augouard, Stephen Foster and Sunil Gopalan for the creation of this resource. 
  • Special thanks are also extended to Anne Taulbut and Jennifer Nye of Katten Muchin Rosenman Cornish for the extensive legal review.
 
CDS

See credit default swap.

Certificate of Deposit

Short- or medium-term, interest-bearing, US Federal Deposit Insurance Corporation (FDIC)-insured debt instrument offered by banks and savings and loans institution in the US. CDs offer higher rates of return than most comparable investments, in exchange for tying up invested money for the duration of the certificate's maturity. Money removed before maturity is subject to a penalty. CDs are low risk, low return investments, and are also known as "time deposits", because the account holder has agreed to keep the money in the account for a specified amount of time, anywhere from three months to six years.

CFD

See Contracts for Difference.

CFO

See collateralised fund obligation.

charting

The use of graphs and charts in the technical analysis of futures markets to plot trends of price movements, average movements of price, volume of trading, and open interest.

chartist

Technical trader who reacts to signals derived from graphs of price movements.

churning

Excessive trading of a discretionary client account by a person with control of the account for the purpose of generating commissions while disregarding the interests of the customer.

clearing

The process of reconciling details of a securities trade that are provided by various parties to the transaction, prior to settlement. Clearing can be a highly lucrative business for securities firms, partly because the function is often linked to margin-lending activities. Those offering clearing are brokers/prime brokers/futures commission merchants.

clearing corporation

See clearing house.

clearing firm

See clearing house.

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