#TradersLeaque

Which response do you prefer?

The term "alpha" can have different meanings depending on the context. Here are some common ones:

1. In Finance/Investing

Alpha refers to the excess return on an investment compared to a market benchmark (like the S&P 500).

A positive alpha means the investment outperformed the market.

A negative alpha means it underperformed.

🔹 Example: If a mutual fund has an alpha of 2, it means it's performing 2% better than the market benchmark.