Glossary

Welcome to Fineco’s Glossary! It will help you better understand the financial terminology and master your financial skills.

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Keynesian Economics

Keynesian economics is a school of thought based on the ideas of Cambridge macroeconomist John Maynard Keynes. His thinking was formed during the Great Depression and was heavily influenced by that event. His approach is considered a “demand-side” theory, and he argued the flagging aggregate demand drives economic recessions.

Keynesian economics challenges the long-held belief that free markets will always self-regulate, and they make the case for stimulating economies in recessions by cutting taxes and increasing government spending to ramp up demand.

KNOCK-OUT OPTION

A knock-out option is an option with a built-in mechanism to expire worthless if a specified price level in the underlying asset is reached. A knock-out option sets a cap on the level an option can reach in the holder's favor. As knock-out options limit the profit potential for the option buyer, they can be purchased for a smaller premium than an equivalent option without a knock-out stipulation.

Korea Stock Exchange (KSC)

The Korea Stock Exchange is a division of the Korea Exchange, which is the sole market for trading securities in Korea. US investors can participate in the Korea Stock Exchange through exchange-traded funds, which are index-based portfolios of stocks that track South Korean market segments.

The KSC started as a separate entity in 1956 and merged with the Korea Exchange in 2005. In 2018, it had a combined market capitalisation of $1.9 trillion. It is headquartered in Busan, South Korea’s second-largest city.