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Derivatives

Options Contracts

This allows investors to speculate on the future price movements of an asset without committing to a purchase. An option contract is a vital financial tool that grants investors the choice to either buy or sell an asset at a prearranged price within a defined time period. Unlike other contracts, it offers the right to buy, but not the obligation. This flexibility allows investors to make informed predictions about an asset's future price fluctuations without being bound to a purchase. Think of it as a risk management strategy that empowers investors to make strategic decisions in the ever-changing world of finance.

Convergence

It is an essential concept in financial markets. As we dive into the world of finance, it's important to understand the concept of convergence. This term refers to the grad...

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Derivative Security

Securities that derive their value from another security are known as underlying securities. This means that their worth is influenced by the features and value of the under...

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Holder (Option Buyer)

The holder, also known as the owner, of an option contract possesses the privilege to exercise the option within its duration. This privilege is acquired by the holder throu...

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Out-of-the-money

An option that would result in a loss upon immediate exercise is known as an out-of-the-money option. Specifically, a Call option is considered out-of-the-money when the cur...

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