Writing an option is the process of selling to another investor the right, but not the obligation, to buy or sell a stock at a given price in the near future. It can also be referred to as shorting an option or selling an option.
The national or government debt is a combination of both internal and external debt. The external debt is referred to as Sovereign Debt. Sovereign Debt refers to bonds issued by a nation’s government in a foreign currency and sold to foreign investors.
A line of credit is an arrangement where a bank offers a maximum loan amount that the borrower can draw upon at any time. The borrower – which can be an individual, business or government entity – has the flexibility to take out as much as they want, up to the maximum amount.
Lines of credit have a couple of important advantages.
A zero-coupon bond or ‘no coupon’ bond is one that does not disburse regular interest payments. Instead, the investor buys the bond at a steep discount price; that is, at a price lower than its face value. When the bond matures, the investor receives the principal amount or face value.
Common zero-coupon instruments include U.S.
A butterfly spread is a neutral options strategy with both limited risk and limited profit potential. The strategy involves four options contracts with the same expiration month but with three different strike prices. Using either all calls or all puts, an investor sells two options at a middle strike price, while simultaneously buying one contract at a lower and one at a higher strike price.