Anchoring effect

Recency bias

Recency bias overvalues recent events in decision-making

Bias ratio

Bias ratio detects valuation bias in asset pricing

Overconfidence effect

Overconfidence leads to overtrading and underperformance

Capital asset pricing model

Treynor-Black model combines active stock picking with a passive market portfolio

the disposition effect causes

Disposition effect: Investors sell winners prematurely and hold losers excessively

Straddle

Straddle strategy profits from large price movements in either direction