Ad
related to: explain the greeks in options
Search results
Results from the WOW.Com Content Network
The option Greeks help traders anticipate movements in options prices, and savvy traders need to understand and keep an eye on how these metrics reflect pricing. Understanding the Greeks can help ...
In mathematical finance, the Greeks are the quantities (known in calculus as partial derivatives; first-order or higher) representing the sensitivity of the price of a derivative instrument such as an option to changes in one or more underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent.
In finance, an option is a contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option.
One Greek, "gamma" (as well as others not listed here) is a partial derivative of another Greek, "delta" in this case. The Greeks are important not only in the mathematical theory of finance, but also for those actively trading. Financial institutions will typically set (risk) limit values for each of the Greeks that their traders must not exceed.
In finance, a price (premium) is paid or received for purchasing or selling options.This article discusses the calculation of this premium in general. For further detail, see: Mathematical finance § Derivatives pricing: the Q world for discussion of the mathematics; Financial engineering for the implementation; as well as Financial modeling § Quantitative finance generally.
A call option is in the money when the strike price is below the spot price. A put option is in the money when the strike price is above the spot price. With an "in the money" call stock option, the current share price is greater than the strike price so exercising the option will give the owner of that option a profit.
Use screening tools at your options broker to identify options that exhibit above-trend implied volatility but that may be strong long-term stocks. 5. Buy calls on dividend payers
Options Clearing Corporation's (OCC) Options Symbology Initiative (OSI) mandated an industry-wide change to a new option symbol structure, resulting in option symbols 21 characters in length. March 2010 - May 2010 was the symbol consolidation period in which all outgoing option roots will be replaced with the underlying stock symbol. [1]
Ad
related to: explain the greeks in options