Options And Futures FAQs

  1. What is the CBOE Volatility Index? (VIX)

  2. What is the difference between options and futures?

  3. What do the S&P, Dow and Nasdaq futures contracts represent?

  4. How do I determine the breakeven point for a short put?

  5. What options strategies are best suited for investing in the retail sector?

  6. What is the difference between derivatives and options?

  7. What is the relationship between implied volatility and the volatility skew?

  8. What's the difference between basic shares and fully diluted shares?

  9. How do I set a strike price in an options spread?

  10. How do I set a strike price for a future?

  11. How can I calculate the delta adjusted notional value?

  12. How is the price of a derivative determined?

  13. What is the difference between derivatives and swaps?

  14. What kinds of derivatives are types of contingent claims?

  15. What does the underlying of a derivative refer to?

  16. What does it mean to take delivery of a derivative contract?

  17. How can derivatives be used for speculation?

  18. How can derivatives be used for risk management?

  19. How do I calculate a forward rate in Excel?

  20. What is the difference between an option-adjusted spread and a Z-spread in reference to mortgage-backed securities (MBS)?

  21. What is the difference between a currency and interest rate swap?

  22. When was the first swap agreement and why were swaps created?

  23. How do I change my strike price once the trade has been placed already?

  24. What is the difference between open interest and volume?

  25. How is the spot price related to a derivative's notional value?

  26. What types of options positions create unlimited liability?

  27. How accurate is the forward rate in predicting interest rates?

  28. How does the term 'in the money' describe the moneyness of an option?

  29. What is the difference between in the money and out of the money?

  30. What does negative vega mean for credit spreads?

  31. How do currency swaps work?

  32. What's the difference between a credit spread and a debt spread?

  33. When is a put option considered to be "in the money"?

  34. What technical skills must one possess to trade options?

  35. Why is the initial value of a forward contract set to zero?

  36. How do I set a strike price for an option?

  37. How risky is a straddle?

  38. Do options make more sense during bull or bear markets?

  39. Where can I find out about upcoming stock splits?

  40. Does the buyer or the seller control a call option?

  41. Why does delta only range from 1 to -1?

  42. What is the difference between a covered call and a regular call?

  43. What is the difference between "right" and "obligation" on a call option?

  44. Is it more advantageous to purchase a call or put option?

  45. Why are call and put options considered risky?

  46. Is there a secondary market for warrants?

  47. Where do I go to make an OTC (over-the-counter) transaction?

  48. What is the difference between a short position and a short sale?

  49. What role does intrinsic value play in put options?

  50. Where can I purchase options?

  51. After exercising a put option, can I still hold my option contract in order to sell it at a lower price?

  52. What are the differences between AMEX and Nasdaq?

  53. What is the difference between return on equity and return on capital?

  54. I own options on a stock, and it's just announced a split. What happens to my options?

  55. I own some stock warrants. How do I exercise them?

  56. What does "guns and butter" refer to?

  57. What is dilutive stock?

  58. Do I own a stock as of the trade date or the settlement date?

  59. How is a put option exercised?

  60. How can I find out which stocks also trade as options?

  61. How do you tell whether an option is American or European style?

  62. Does the seller (the writer) of an option determine the details of the option contract?

  63. What do all of the letters in a stock option ticker symbol mean?

  64. Can an option be exercised on the expiration date?

  65. Where does the name "Wall Street" come from?

  66. Can a stop-loss order be used to protect a short sale transaction?

  67. Why should I invest?

  68. What is a debt/equity swap?

  69. If everyone is selling in a bear market, does your broker have to buy your shares from you? If so, won't he be losing his shirt?

  70. Are we in a bull market or a bear market?

  71. Why are corporations so concerned about their stock price?

  72. How does the ISIN numbering system work?

  73. Why do options with the same underlying stock and strike prices trade for different amounts?

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