Category: Education
Created by: Timmwilson
Number of Blossarys: 22
English (EN) 
A call option is an investment strategy, where the buyer of the option is betting that the underlying value of the asset (stock, bond, commodity) is going to rise. In this investment, the call option ...
A put option is an investment strategy where the investor bets the underlying asset's (stock, bond, commodity) market value will fall. The put option gives the investor THE OPTION to sell a specified ...
In terms of purchasing derivatives, it is the cost to purchase the option, furutre/forward contracts. This premium is a one time front-load fee paid to the broker who sold you the derivative. To ...
The writer of an option, whether it be a call or put, receives the premium when the option is sold. However this option writer has the OBLIGATION to deliver, or take the delivery of, the underlying ...
An option holder pays the premium (cost of the option) to the broker, and has THE RIGHT, but is not obligated to, exercise the option. The option holder's risky position is finite, as the most they ...
Arbitrage is the exploitation or differing prices for the same or similar asset. EX: The price of oil goes up, and the price of jet fuel does not, there may be an arbitrage opportunity between the ...
Identified by Hans Stoll in 1969, the Put/Call Parity refers to the idea of an efficient market. What he defined was that the relationship between European puts and calls with the same expiration and ...
By: Timmwilson