Neutral

AAA

DEFINITION of 'Neutral'

1) A term that describes an option on a security or market that is neither bullish nor bearish.

2) A term that describes a person who is non-biased in the case of a dispute, such as an arbitrator.

INVESTOPEDIA EXPLAINS 'Neutral'

If an investor has a neutral opinion, that is, he or she feels a security or index will neither increase nor decrease in value in the near future, the investor can undertake an option strategy that may profit despite the lack of movement in the underlying security.

RELATED TERMS
  1. Ombudsman

    An official who investigates complaints (usually lodged by private ...
  2. Bear

    An investor who believes that a particular security or market ...
  3. Gamma Neutral

    A method of managing risk in options trading by establishing ...
  4. Index

    A statistical measure of change in an economy or a securities ...
  5. Market Neutral

    A strategy undertaken by an investor or an investment manager ...
  6. Option

    A financial derivative that represents a contract sold by one ...
Related Articles
  1. Where's The Market Headed Now?
    Fundamental Analysis

    Where's The Market Headed Now?

  2. Market Strength Tutorial
    Trading Strategies

    Market Strength Tutorial

  3. Pick the Right Brokerage Account for ...
    Options & Futures

    Pick the Right Brokerage Account for ...

  4. The Top Technical Indicators For Options ...
    Options & Futures

    The Top Technical Indicators For Options ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center