by Henry Liverman | May 29, 2021 | Market Definitions
A market where financial instruments (eg, commodities, currencies, and securities) can be traded for immediate delivery (ie, exchange of cash). This is in contrast to a futures contract, which is based on the underlying asset delivery at a future date. Spot markets...
by Henry Liverman | May 29, 2021 | Market Definitions
An options strategy which protects against large losses while also limiting gains. This is done through two strategies known as protective puts and covered calls. The protective collar itself consists of a long position in the underlying security, a put option...
by Henry Liverman | May 28, 2021 | Market Definitions
An investment similar to a bond made up of a bundle of home loans bought from the banks that issued them. Investors in MBSs receive periodic payments similar to bond coupon payments. Of note, the MBS is only as safe as the mortgage loans that are backing it up. The...
by Henry Liverman | May 28, 2021 | Market Definitions
An options trading strategy designed to protect an investor from drastic drops in the price of a stock. The investor, while holding a long position on a stock, purchases an at-the-money put option of the same stock to protect themselves against depreciation in the...
by Henry Liverman | May 28, 2021 | Market Definitions
A similar strategy to a straddle but with utilizing options at different strike prices. A strangle options strategy is achieved when an investor has a position in a call and a put option with different strike prices but with the same expiration date and underlying...
by Henry Liverman | May 28, 2021 | Market Definitions
An options trading strategy involving a trader purchasing a long call and a long put on the same underlying asset at the same strike price and with the same expiration date. The objective is to profit from a very strong move in either direction by the underlying...
