retail panic takes shapes in concave down moves that become more negative in slope as more stops and liquidations and panic sells are triggered. convex down moves suggest the opposite where retail does not panic and instead reflexively buys more as prices dump more (aka. "averaging down", "DCA", "doubling down", etc.)
What is the difference between concave and convex lines?
A concave is any line or surface that curves inward. (This line is a concave.) A convex is any line or surface that curves outward. (This surface is a convex.) It is not as common to use concave or convex this way.
What is the difference between concave and convex mirror?
A convex mirror, for example, is curved outward a little, but just enough to affect the size and shape of the image. A concave shape is a direct opposite of convex or rounded. It is incurved (curved inward), sunken, and a bit hollow.
What is an example of a convex shape?
In addition to round shapes and objects, anything that’s slightly rounded is still convex. A convex mirror, for example, is curved outward a little, but just enough to affect the size and shape of the image. A concave shape is a direct opposite of convex or rounded.
What is the opposite of concave?
The opposite is convex meaning "curved or rounded outward." Both words have been around for centuries but are often mixed up. Advice in mirror may be closer than it appears.
What is stock convexity?
Convexity is a risk-management tool, used to measure and manage a portfolio's exposure to market risk. Convexity is a measure of the curvature in the relationship between bond prices and bond yields. Convexity demonstrates how the duration of a bond changes as the interest rate changes.
What is a convex trade?
So a convexity trade is where you for instance buy that asset which has an upward- curved value (IE: a bond) and sell something that moves in a straight line with that factor (like some IR derivative). If that factor you're thinking of (interest rates) really moves fast, you make money.
What is a convex strategy?
A convex strategy with “long volatility” exposure – is any strategy which tends to have U-shaped performance where both large positive and negative extreme events in markets result in positive performance.
What is a convex asset?
Definition. An investment strategy is convex if its payoff relative to its benchmark is curved upward.
Do stocks have convexity?
Equity convexity means that a stock outperforms in times of large upward or downward movements of the broad market: its elasticity to the market return is curved upward. Gamma is a measure of that convexity.
Do you want high or low convexity?
Convexity in bonds is a way to measure the bond price's sensitivity to changes in interest rates. Bonds with higher convexity are generally considered better investments in markets where interest rates are expected to rise, and lower convexity is better suited for when rates are likely to remain unchanged or fall.
How do you invest in convex?
How to buy Convex FinanceDownload Coinbase Wallet. ... Choose a Coinbase Wallet username. ... Securely store your recovery phrase. ... Understand and plan for Ethereum network fees. ... Buy and transfer ETH to Coinbase Wallet. ... Use your ETH to buy Convex Finance in the trade tab.
What is convex vs concave?
Concave means "hollowed out or rounded inward" and is easily remembered because these surfaces "cave" in. The opposite is convex meaning "curved or rounded outward." Both words have been around for centuries but are often mixed up.
What is convexity and concavity?
A convex function has an increasing first derivative, making it appear to bend upwards. Contrarily, a concave function has a decreasing first derivative making it bend downwards.
What does it mean to buy convexity?
In mathematical finance, convexity refers to non-linearities in a financial model. In other words, if the price of an underlying variable changes, the price of an output does not change linearly, but depends on the second derivative (or, loosely speaking, higher-order terms) of the modeling function.
Is negative convexity good?
Negative convexity exists when the price of a bond falls as well as interest rates, resulting in a concave yield curve. Assessing a bond's convexity is a great way to measure and manage a portfolio's exposure to market risk.
Why is convexity important in optimization?
So at least one reason convexity is so important in optimization is that the global minimum is also the unique critical point (place where the gradient is zero), which allows you to search for one by searching for the other.
What does "convex" mean?
Convex has the word vex in it (because it is vexing that this word is hard to remember), and means “curved or rounded outward.”. Neither word is particularly recent; concave has been in English since the 15th century, and convex since the 16th.
What does "concave" mean in mirrors?
What to Know. Concave means "hollowed out or rounded inward" and is easily remembered because these surfaces "cave" in. The opposite is convex meaning "curved or rounded outward.". Both words have been around for centuries but are often mixed up. Advice in mirror may be closer than it appears.
Why is it important to know the difference between concave and convex?
It's important to know the difference between concave vs. convex because the two words have opposite meanings. Getting these terms mixed up in your writing can result in significant misunderstanding. Master the basic differences so you can use the words concave and convex in your vocabulary with confidence.
What is a convex surface?
A convex is any line or surface that curves outward. (This surface is a convex.) It is not as common to use concave or convex this way. It is much more common to use these terms as adjectives.
What is the definition of concave?
When used as an adjective, these words describe the shape of an object, by specifying whether the object curves inward or outward. An object with a concave shape curves inward, such as a spoon or a bowl. The middle is thinner than the edges.
What is a concave line?
A concave is any line or surface that curves inward. (This line is a concave.) A convex is any line or surface that curves outward. (This surface is a convex.)
Why is it so hard to remember which shape is concave?
Remembering which shape (convex or concave) curves in can be challenging because the two terms sound so similar. In order to help make sure that you remember which word represents which shape, use this simple trick. If something caves-in, that means it falls inward. Concave has the word cave in it.
Where does the spine curve?
Where a person's spine curves inward, toward the front of the individual's body, that is a concave curve. Where a person's spine curves outward, away from his or her front side, that is a convex curve. Advertisement.
Do amusement parks have concave mirrors?
If you've ever stood in front of a mirror that made you appear a different size than what you really are, you have experienced either convex or concave mirrors in action, or maybe even both. Funhouses at amusement parks often have both kinds of mirrors to amaze visitors by how different their image can look from one mirror to another.
Why do portfolio managers use convexity?
Portfolio managers will use convexity as a risk-management tool, to measure and manage the portfolio's exposure to interest rate risk . In the example figure shown above, Bond A has a higher convexity than Bond B, which indicates that all else being equal, Bond A will always have a higher price than Bond B as interest rates rise or fall.
What is convexity in bond?
Convexity is a measure of the curvature in the relationship between bond prices and bond yields. Convexity demonstrates how the duration of a bond changes as the interest rate changes. If a bond's duration increases as yields increase, the bond is said to have negative convexity. If a bond's duration rises and yields fall, ...
What happens to bond prices when yields fall?
In other words, as yields fall, bond prices rise by a greater rate—or duration—than if yields rose. Positive convexity leads to greater increases in bond prices. If a bond has positive convexity, it would typically experience larger price increases as yields fall, compared to price decreases when yields increase.
What happens to a bond if its duration increases?
If a bond's duration increases as yields increase, the bond is said to have negative convexity. In other words, the bond price will decline by a greater rate with a rise in yields than if yields had fallen. Therefore, if a bond has negative convexity, its duration would increase—the price would fall.
Why is convexity important?
Therefore, convexity is a better measure for assessing the impact on bond prices when there are large fluctuations in interest rates. As convexity increases, the systemic risk to which the portfolio is exposed increases.
What happens when a bond has positive convexity?
If a bond has positive convexity, it would typically experience larger price increases as yields fall, compared to price decreases when yields increase. Under normal market conditions, the higher the coupon rate or yield, the lower a bond's degree of convexity.
What happens to a bond's duration when interest rates change?
Essentially, the higher a bond's duration, the larger the change in its price when interest rates change . In other words, the greater its interest rate risk. So, if an investor believes that interest rates are going to rise, they should consider bonds with a lower duration.
Quick summary
Concave means curving inward—like the shape of the inside of a bowl. Convex means curving outward—like the shape of the outside of a contact lens. To put it another way, a concave shape can be filled, while a convex shape creates a dome.
What does concave mean?
Concave means “curving inward” or “hollow and curved,” like the inside of a bowl, or, more technically, the inside of a partial sphere. A crater is roughly concave.
What does convex mean?
Convex means “having a surface that is curved or rounded outward,” like the outside of a contact lens (the part that a person touches when putting it on their eye). A mound is roughly convex.
Concave vs. convex lenses
Concave lenses—those that are thicker around the edges than they are in the center— disperse light rays, which can have the effect of making things look smaller or farther away. Convex lenses—those that dome outward and are thicker in the center than they are around the edges—make light rays converge.
Concave vs. convex mirrors
Convex mirrors have the effect of making things look farther away and allowing for a field of view that’s wider than the one you would normally be able to see. Most cars have convex passenger side mirrors that allow the driver to see objects that would normally be in the vehicle’s blind spot.
Concave vs. convex polygons
In geometry, concave has a more specific meaning that’s used to describe the shape of a polygon (multi-sided figure) that has at least one interior angle greater than 180 degrees (translation: it’s a shape with at least one inward angle).
How to use concave vs. convex
Here’s the best way to remember the difference: concave things curve or turn inward, like the inside of a cave. Convex things curve or turn outward—regular hexagons are excellent examples of convex polygons.
What You Need To Know
The concave lens is characterized by an irregularly shaped convex curve on the retina, while the convex lens is characterized by a smooth and rounded concave curve. Although convex lenses may look similar on the outside, there are major differences in internal anatomy, physiology, and refractive correction needs.
Using a Convex lens over Concave lens
The downside to using a convex lens is that the concave lens is easier to wear and use. This is because you can see more clearly. with the convex lens. You can also choose which area of your vision you wish to improve.
