-
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.
-
A market maker is a firm or an individual that stands ready to buy and sell a particular security throughout the trading session to maintain liquidity and a fair and orderly market in that security. Sometimes, no one may be selling a stock that you're interested in buying, or no one may be bidding on a stock that you're trying to sell.
-
Learn more about this classic game theory scenario.
-
Learn about the differences between these two words and how each one is used in the stock market.
-
Learn about how this number provides a measure of how much systematic risk a firm's equity has compared to the market.
-
Learn more about the different ways you can calculate your portfolio's average return.