noun
Meaning 1
A negative impact on the compound returns from a leveraged investment product caused by an underlying reference value being regularly reset so that to cover any loss in value the appreciation in proportion to it needs to be larger.
Definition source: English Wiktionary via Wiktextract
Usage: countable, informal, uncountable
Topics: business, finance
No example sentence was provided for this meaning.
Meaning relationships
Synonyms: variance drain, volatility tax, volatility decay
Antonyms: none provided