Search results
Results from the WOW.Com Content Network
The naked option is one of riskiest options strategies, and therefore most brokers restrict them to only those traders that have the highest options level approval and have a margin account. Naked options are attractive because the seller receives the premium cost of the option without buying a corresponding position to hedge against potential ...
A Low Exercise Price Option (LEPO) is an Australian Stock Exchange traded option with a low exercise price that was specifically designed to be traded on margin.It is a European style call option with a low exercise price of $0.01 and a contract size of 100 shares to be delivered on exercise.
Portfolio margin is a risk-based margin policy available to qualifying US investors. The goal of portfolio margin is to align margin requirements with the overall risk of the portfolio. Portfolio margin usually results in significantly lower margin requirements on hedged positions than under traditional rules.
In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the underlying), at a specified price (the strike), by (or on) a specified date (the expiry or maturity) to the writer (i.e. seller) of the put.
The option strategy where the middle options (the body) have different strike prices is known as a Condor. A Christmas tree butterfly (not to be confused with the unrelated option combination also called a Christmas tree ) consists of six options used to create a payoff diagram similar to a butterfly but slightly bearish or bullish instead of ...
Margin-equity ratio is a term used by speculators, representing the amount of their trading capital that is being held as margin at any particular time. The low margin requirements of futures results in substantial leverage of the investment. However, the exchanges require a minimum amount that varies depending on the contract and the trader.
Profit diagram of a box spread. It is a combination of positions with a riskless payoff. In options trading, a box spread is a combination of positions that has a certain (i.e., riskless) payoff, considered to be simply "delta neutral interest rate position".
The calendar spread can be used to attempt to take advantage of a difference in the implied volatilities between two different months' options. The trader will ordinarily implement this strategy when the options they are buying have a distinctly lower implied volatility than the options they are writing (selling).