Trading Instruments Education

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  1. How does implied volatility impact the pricing of options?

    As implied volatility increases, call and put option prices go up. When implied volatility decreases, option prices go down.
  2. How does a stop order and a stop limit order differ?

    Traders use stop orders and stop limit orders as stop losses and regular investors should understand how each type works.
  3. What is the difference between a currency and interest rate swap?

    Interest rate swaps involve exchanging interest payments, while currency swaps involve exchanging an amount of cash in one ...
  4. What are the primary sources of market risk?

    There are four primary sources of risk that affect the overall market: interest rate risk, equity price risk, foreign exchange ...
  5. How is implied volatility used in the Black-Scholes formula?

    Implied volatility is a measure of the estimation of the future variability for the asset underlying the option contract.
  6. 20 Ways To Save On Medical Bills

    Handy tips to cut the cost of hospital bills, co-pays, prescription drugs and more.
  7. What Does Positive Theta Mean for Credit Spreads?

    Learn about the option Greek theta and credit spreads, why credit spreads have positive thetas and what positive thetas signify ...
  8. When Is a Call Option in the Money?

    Call options have intrinsic values, and a call option is in the money when the underlying stock price is above the strike ...
  9. A Forward Contract Differs From a Call Option

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets.
  10. How risky are futures?

    Futures as an investment asset are not inherently riskier than other investment assets, such as equities or currencies.
  11. What is the difference between a covered call and a regular call?

    A covered call is an options strategy that consists of selling a call option that is covered by a long position in the asset.
  12. Derivative

    A derivative is a security with a price that is dependent upon or derived from one or more underlying assets.
  13. What does a futures contract cost?

    Learn about values of futures contracts and the initial margin a trader must place in an account to open a futures position, ...
  14. What's the best way to play backwardation in the futures market?

    Backwardation is most likely to occur from short-term factors leading to fears of scarcity: extreme weather, wars and political ...
  15. Weighted Average

    Weighted average is an average in which each observation in the data set is assigned or multiplied by a weight before summing ...
  16. What is the difference between options and futures?

    An option gives a buyer the right, but not the obligation to buy or sell an asset, A futures contract obligates the buyer ...
  17. Penny Stocks to Watch for November 2018

    November's penny stock list features a broad mix of companies that are showing significant upside potential, both technically ...
  18. Penny Stocks to Buy Using Technical Analysis for November 2018

    Penny stock technical analysis plays that held up well through October's sell-off could generate healthy November profits.
  19. Nightmare on Wall Street: The Spooky Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  20. What is the difference between share purchase rights and options?

    An outsider buys the right to purchase a stock via options, whereas share purchase rights inherently offer that right for ...
  21. What do all of the letters in a stock option ticker symbol mean?

    The option ticker explains four main things: the underlying stock, whether it is a call or a put option, the expiration month ...
  22. VIX - CBOE Volatility Index

    The Volatility Index, or VIX, is an index created by the Chicago Board Options Exchange (CBOE), which shows the market's ...
  23. Futures Quotes Explained

    If there’s a security whose price fluctuates, there can theoretically be a futures marketplace for it. Here we explain futures ...
  24. Why is the initial value of a forward contract set to zero?

    Forward contracts do not require early payment or down payment since no money changes hands at the initial agreement, so ...
  25. Price Discovery

    Price discovery is the process of setting the spot price, but most commonly the proper price, for a security, commodity or ...
  26. The Biggest Risk to the Global Expansion

    We explain why elevated trade protectionism marks the greatest downside risk to the global expansion.
  27. An In-Depth Look at the Swap Market

    The swap market plays an important role in the global financial marketplace; find out what you need to know about it.
  28. A Guide to Trading Binary Options in the U.S.

    What binary options are, how they work and where you can legally trade them in the United States.
  29. Introduction to Level II Quotes

    Find out what's happening in a given stock with this service showing Nasdaq market makers' best bid and ask prices.
  30. Car Shopping: New Or Used?

    Don't get taken for a ride. Learn the pros and cons before the salesperson makes a pitch.
  31. 4 Ways To Survive and Prosper in a Bear Market

    Learn how to survive, and even prosper, in a bear market, by considering and putting into action the following four strategies.
  32. Top Brokers Offering Tools for Covered Calls

    Here are the brokers that offer the best tools for investors and traders to write covered calls.
  33. SEC Form 17-H

    SEC Form 17-H is a risk-assessment report that all broker-dealers must file with the Securities and Exchange Commission (SEC).
  34. Giants Of Finance: John Maynard Keynes

    Keynes' "General Theory" will forever be remembered for giving governments a central role in economics.
  35. Introducing The VIX Options

    Discover a new financial instrument that provides great opportunities for both hedging and speculation.
  36. Swap

    A swap is a derivative contract through which two parties exchange financial instruments, such as interest rates, commodities, ...
  37. Top 5 Pharmaceutical ETFs for 2018

    Details on the five top healthcare pharmaceutical ETFs for 2018.
  38. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  39. 6 Common Portfolio Protection Strategies

    Several strategies can help an investor protect against the worst.
  40. When and How to Take Profits on Options

    Here, we'll discuss the different criteria you'll need to consider to ensure maximum profit taking while trading options.
  41. Top 4 Apps for Option Traders

    Discover some of the most popular apps that options traders use so they can stay on top of market opportunities and manage ...
  42. Parents and Spinoffs: When to Buy and When to Sell

    Spinoffs can create great investment opportunities, but there's a time to stick around and then there's a time to jump ship. ...
  43. What It Takes To Become An Elite Trader

    You need a detailed plan and systematic approach to reach the top tier in trading performance.
  44. Get A Strong Hold On Profit With Strangles

    Forget straddles. These strangles are both liberating and legal in the investing world.
  45. The Most Important Technical Indicators For Binary Options

    Trading binary options is not for the novice, but if you're ready to delve in, get to know the best technical indicators.
  46. Writing Covered Calls On Dividend Stocks

    Writing covered calls on stocks that pay above-average dividends is a strategy that can be used to boost returns on a portfolio, ...
  47. Halloween Strategy

    Halloween strategy is a trading tactic, which posits that stocks perform better between October 31 and May 1 than they do ...
  48. Top 8 Apps for Financial News

    Learn about the top eight financial news apps that help to access real-time business news, stock alerts and financial analysis.
  49. Credit Default Swaps: An Introduction

    Credit default swaps are the most widely used type of credit derivative and a powerful force in the world markets.
  50. Strategic Ways to Distribute Your RMD

    Eventually, you'll need to take required minimum distributions. Here you'll get tips on preserving your nest egg in the face ...
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