A currency option is a type of option that gives the holder the right, but not the obligation, to buy or sell a specified currency at a specified exchange rate on or before a specified date. Currency options are used by currency traders to hedge against exchange rate risk, or to speculate on changes in … Read more
The termination date is the date on which an options or futures contract expires. For options, this is the date on which the option holder may exercise their option. For futures, this is the date on which the contract must be settled. What are the 7 steps that concerns hr in terminating employees? 1. Determine … Read more
A dollar roll is the sale of a security with a future delivery date at a specified price, followed by the purchase of the same security with a later delivery date at a different price. The terms of the transaction are typically negotiated between the two parties involved, and the price differential between the two … Read more
Calendar spreads are a type of options and futures trading strategy that involves the simultaneous purchase and sale of two different contracts with different expiration dates, but with the same underlying asset. The goal of this strategy is to profit from the difference in the price of the two contracts as they approach their respective … Read more
Time decay is the loss of value of an option as it approaches its expiration date. Which time frame is best for intraday option trading? There is no definitive answer to this question, as it depends on a number of factors, including the trader’s objectives, risk tolerance, and market conditions. However, some experts recommend intraday … Read more
A bond market association swap is an agreement between two parties to exchange periodic payments on a fixed-rate bond for periodic payments on a floating-rate bond. The terms of the swap are typically agreed upon at the time of the trade, and the swap is typically executed over-the-counter (OTC). The BMA is a trade association … Read more
A cashless conversion is an options or futures trading strategy in which the trader buys or sells an asset and immediately offsetting the position with an equal and opposite transaction. The purpose of a cashless conversion is to take advantage of a temporary price discrepancy between the spot price and the futures price of an … Read more
A plain vanilla swap is a derivative contract in which two parties exchange cash flows based on a predetermined notional amount. The most common type of plain vanilla swap is an interest rate swap, in which one party pays a fixed rate of interest to the other party while the other party pays a variable … Read more
In finance, the term “Greeks” refers to the various factors that affect the price of options and other derivatives. The most common Greeks are Delta (Δ), Gamma (Γ), Theta (Θ), and Vega (V). Delta measures the sensitivity of the derivative’s price to changes in the underlying asset’s price. Gamma measures the sensitivity of Delta to … Read more
ISDA Master Agreement: What It Is and What It Does What are derivatives in finance? Derivatives are financial instruments whose value is derived from the value of an underlying asset. The most common types of derivatives are options, futures, and swaps. Derivatives are used by financial institutions to manage risk and by speculators to bet … Read more
