by Henry Liverman | May 29, 2021 | Market Definitions
An options strategy involving the purchase of a put and a call option for the same expiration date and strike price on the same underlying security. This strategy is profitable when the stock either rises or falls from the strike price more than the premium paid. ...
by Henry Liverman | May 29, 2021 | Market Definitions
The current price in a marketplace that an asset (eg, a security, commodity, or currency) can be bought or sold for immediate delivery. Though spot prices are specific to both time and place, in a global economy the spot price of most securities or commodities tend...
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...
