AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

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.
 
taker

See Buyer.

TAR
See Trading advisor report.
technical analysis

An approach to forecasting commodity prices that examines patterns of price change, rates of change, and changes in volume of trading and open interest, without regard to underlying fundamental market factors. Technical analysis can work consistently only if the theory that price movements are a Random Walk is incorrect.

ted spread

The difference between the price of the three-month US Treasury bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month.

tick

Refers to a minimum change in price up or down. An up-tick means that the last trade was at a higher price than the one preceding it. A down-tick means that the last price was lower than the one preceding it.

top-down investment process

An approach that seeks to assess the influence of various macro-and micro-economic factors before identifying individual investments.

total return

The total percentage return of an investment over a specified period, calculated by expressing the difference between the investment's initial price and final price as a percentage of the initial price.

track record

The actual performance of an investment since inception, usually represented by audited monthly returns, net of fees.

tracking error

Also known as Active risk.

trader

(1) A merchant involved in cash commodities; (2) a professional speculator who trades for his own account and who typically holds exchange trading privileges.

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