1.7. How Much Finance Knowledge Do I Need?

A common question from students is "How much finance knowledge do I need for this course?" The short answer is: very little.

You definitely don't have to be an experienced professional or profitable trader already to take this course. Most finance-specific terms will be defined and put into context so you understand their meaning and importance as they come up.

A general understanding of financial terms and concepts will certainly not hurt you though. For example, knowing that a form 10-K is an annual report required by the SEC that discusses a company's financial statements. Or that an options contract is something that gives you the right, but not the obligation, to buy or sell an underlying security at a fixed price at a certain date in the future. Or that market orders take liquidity and limit orders provide liquidity, and that all the liquidity available in the market in the form of limit orders is aggregated into a data structure called the limit order book. Knowing these types of finance concepts at a high-level will make your learning more fluid, because this course will circle around using code to interact and analyze with these things. But again, every salient concept will be introduced and explained in sufficient detail as the necessity for it arises.

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