by Henry Liverman | May 27, 2021 | Market Definitions
An options trading strategy designed to take advantage of a stock’s limited increase in price. It achieves this by placing two call options to create a range consisting of a lower and upper strike price. This helps limit the losses (but also caps the gains). ...
by Henry Liverman | May 27, 2021 | Market Definitions
An options trading strategy used by a bearish investor to maximize profit and minimize loss. When the trader expects the decline of a security or asset price, a bear put spread may be implemented by purchasing put options while also selling the same number of puts on...
by Henry Liverman | May 26, 2021 | Market Definitions
A way of understanding the risk exposures related to an option or a book of options. Options traders will refer to the delta, gamma, vega, and theta of their option positions, referring to measurements of the sensitivity of an option’s price relative to...
by Henry Liverman | May 26, 2021 | Market Definitions
A determination set by the Supreme Court of the United States in 1946 that determines what qualifies as an “investment contract” and thus would be subject to US securities laws and regulations. It determined that an investment contract exists if an...
by Henry Liverman | May 26, 2021 | Market Definitions
The first derivative of delta that is used to try and gauge the price movement of an option relative to the amount is it in out out of the money (ie, if it is an options contract that only contains extrinsic value). When the option being measured is deep in or out of...
by Henry Liverman | May 26, 2021 | Market Definitions
An exchange where futures contracts are traded by participants. Today, the majority of futures trading (or derivatives contracts that lock in future delivery of a commodity or security at a price set at present) occurs electronically. Futures trading is regulated by...
