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An option’s implied volatility (IV) gauges the market’s expectation of the underlying stock’s future price swings, but it doesn’t predict the direction of those movements.
The function f is monotonically increasing in σ, meaning that a higher value for volatility results in a higher theoretical value of the option. Conversely, by the inverse function theorem , there can be at most one value for σ that, when applied as an input to f ( σ , ⋅ ) {\displaystyle f(\sigma ,\cdot )\,} , will result in a particular ...
Lick five fingers Monitor. IVX is a volatility index providing an intraday, VIX-like measure for any of US securities and exchange traded instruments.IVX is the abbreviation of Implied Volatility Index and is a popular measure of the implied volatility [1] of each individual stock. [2]
The intrinsic value (IV) of an option is the value of exercising it now. If the price of the underlying stock is above a call option strike price, the option has a positive intrinsic value, and is referred to as being in-the-money .
Widow-and-orphan stock: a stock that reliably provides a regular dividend while also yielding a slow but steady rise in market value over the long term. [13] Witching hour: the last hour of stock trading between 3 pm (when the bond market closes) and 4 pm EST (when the stock market closes), which can be characterized by higher-than-average ...
After the IPO, shares are traded freely in the open market at what is known as the free float. Stock exchanges stipulate a minimum free float both in absolute terms (the total value as determined by the share price multiplied by the number of shares sold to the public) and as a proportion of the total share capital (i.e., the number of shares ...
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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.