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Home Categories Trading Strategies External arbitrage is a type of arbitrage involving multinational US banks to take advantage of interest rate differentials between the US and other countries. Over-hedging occurs when an offsetting position is established that is larger than the original position. Interest on the overnight swap rate is accrued and paid on the reset dates, with the fixed portion included in the cost of the swap for each party. A pattern day trader (PDT) is a trader who completes four or more day trades within five business days using the same account. Portfolio turnover is a measure of how quickly a fund’s securities are bought or sold by the fund’s managers over a given period of time. Pure play refers to investing in a company focused on one specific industry or niche. A Qualified Eligible Participant is an individual who meets the requirements for trading in various investment funds such as futures and hedge funds. Scalping is a trading strategy in which traders profit from small changes in the price of a stock. Swap rate refers to the fixed rate that a party to a swap contract asks for in exchange for a commitment to pay a short-term rate, such as the labor or federal fund rate. Swing trading involves trades that last from several days to several months in order to profit from the expected price movement.