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Sell to close means selling an option previously bought to open the transaction. This closes the position. ... Selling to open an options contract with a premium of $1 earns the trader $100 cash.
Margin loan interest and options fees account for 39.5% of Robinhood's total revenue through nine months of 2024. These types of speculative activities dry up during market downturns.
An alternate name is "alligator spread," derived from the large number of trades required to open and close them "eating" one's profit via commission fees. Box spreads are usually only opened with European options, whose exercise is not allowed until the option's expiration. Most other styles of options, such as American, are less suitable ...
An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Under the common law, consideration for the option contract is required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1).
Option values vary with the value of the underlying instrument over time. The price of the call contract must act as a proxy response for the valuation of: the expected intrinsic value of the option, defined as the expected value of the difference between the strike price and the market value, i.e., max[S−X, 0]. [3]
Through the first three quarters of 2024, Robinhood's transaction-based revenue, driven primarily by options trading, reached $975 million, equating to a year-over-year growth of 35%.
Co-founder of Robinhood Markets Vladimir Tenev. His company became known for helping pioneer commission-free trading by relying on PFOF. [8] [9] In 2014, broker-dealer Robinhood Markets introduced no-commission retail stock trades funded by payment for order flow. [10]
Robinhood's evolution from meme stock trading champion to a wealth management platform rages on.The company said late Wednesday it will be launching futures and index options trading on its app, a ...