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Learn more about this derivative security.
Futures is short for Futures Contracts, which are contracts between a buyer and seller of an asset who agree to exchange goods and money at a future date, but at a price and quantity determined today.
A type of option where the payoff depends on both the price levels of the strike and the underlying asset, like standard options. If the binary option expires in the money, the trader will always receive a fixed $100 compensation per contract. If the option expires out of the money, the trader receives nothing.
An options premium is the amount of money that investors pay for a call or put option. The two components that affect options pricing are the intrinsic value and time value. Matthew is interested in Roadking Auto, a luxury car maker, and finds that he can buy a call option with a strike price of $40 a share.
Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality
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.
Learn about how this number provides a measure of how much systematic risk a firm's equity has compared to the market.
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