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Derivatives

Extrinsic Value

The intrinsic value is the inherent value of an option determined by its underlying asset's current price. This means that the extrinsic value is influenced by factors such as time until expiration, volatility, and interest rates.

Understanding the concept of extrinsic value is crucial for investors in the realm of finance. It refers to the additional value that an option holds beyond its intrinsic price, which is based on the underlying asset's current market price. In simpler terms, it is the premium that investors are willing to pay for the potential future profits of the option. However, this value is not set in stone and is subject to various external factors such as time, volatility, and interest rates.

This can happen at anytime before the options contract expires. Options trading involves the concept of "exercising," which refers to the act of utilizing the right to buy ...

Covered Call Option Writing

In this particular trading approach, the investor maintains ownership of a security for a prolonged period while also selling a call option on that same security. This allow...

Deep Discount Bonds

Deep Discount Bonds, also referred to as zero-coupon bonds, are financial instruments that are acquired at a fixed face value, and the full amount of the investment is paid ...

Long Hedge (Futures)

A long hedge refers to a strategy where an investor takes a long position on a futures contract. This is commonly utilized by hedgers who plan to purchase an asset in the fu...

Intermarket Spread

Intermarket spread refers to the variation in price of a particular contract across different exchanges. This difference can arise due to various factors such as market dema...

Contracts are agreements between two parties to buy or sell an asset at a specified price on a predetermined date. In the world of finance, Delivery Month refers to the spec...

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Mutual Funds

All terms and concepts related to mutual funds, which are investment vehicles that pool funds from m

Credit Cards

All terms and concepts related to the use, features, and management of payment cards allowing users

Insurance

All terms and concepts related to insurance, which is a financial arrangement that provides protecti

Derivatives

All terms & concepts related to financial contracts whose value is based on an underlying asset,

Fixed Income

Investments that provide regular, fixed payments, such as bonds and treasury bills.

IPO

All terms and concepts related to the process in which a private company offers its shares to the pu

Currency

All terms related to the system of money in general use in a particular country, representing a medi

Corporate Actions

Terms related to decisions and events initiated by a company that can impact its stock, such as divi

Financial Terms

A comprehensive resource containing definitions and explanations of terms, concepts, and jargon used

Technicals

All terms and concepts related to technical analysis in finance, which involves using historical pri

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