Enhance Your Learning with Economics - Options and Futures Flash Cards for quick learning
Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time period.
Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.
An options contract that gives the holder the right to buy the underlying asset at a specified price within a specific time period.
An options contract that gives the holder the right to sell the underlying asset at a specified price within a specific time period.
The buying of a security, such as a stock or an option, with the expectation that its price will rise.
The selling of a security, such as a stock or an option, with the expectation that its price will fall.
The predetermined price at which the holder of an option can buy or sell the underlying asset.
The date on which an options contract becomes invalid and the right to exercise it no longer exists.
An options contract that has intrinsic value, meaning the option is currently profitable if exercised.
An options contract that has no intrinsic value, meaning the option is currently not profitable if exercised.
An options contract where the strike price is equal to the current price of the underlying asset.
The use of borrowed money to increase the potential return of an investment.
The amount of money or collateral required by a broker to trade on margin or to hold a futures position.
A statistical measure of the dispersion of returns for a given security or market index.
A measure of the sensitivity of the price of an option to changes in the price of the underlying asset.
A measure of the rate of change in the delta of an option for a one-point change in the price of the underlying asset.
A measure of the sensitivity of the price of an option to changes in the volatility of the underlying asset.
A measure of the rate of decline in the value of an option over time.
A measure of the sensitivity of the price of an option to changes in interest rates.
A strategy in which an investor sells a call option on a security that is owned in their portfolio, providing downside protection and generating income from the premium received.
A strategy in which an investor buys a put option on a security that is owned in their portfolio, providing downside protection in case of a price decline.
A strategy in which an investor buys both a call option and a put option on the same underlying asset, with the same strike price and expiration date, in anticipation of a significant price move.
A strategy in which an investor buys both a call option and a put option on the same underlying asset, but with different strike prices, in anticipation of a significant price move.
A strategy in which an investor combines a bull spread and a bear spread using three different strike prices, resulting in limited risk and limited profit potential.
A strategy in which an investor buys and sells two options with the same strike price but different expiration dates, taking advantage of time decay and volatility differences.
Having a positive or optimistic outlook on the price of a security or the overall market.
Having a negative or pessimistic outlook on the price of a security or the overall market.
A market characterized by rising prices and investor optimism.
A market characterized by falling prices and investor pessimism.
An order to buy or sell a security at the best available price in the market.
An order to buy or sell a security at a specified price or better.
An order to buy or sell a security once it reaches a specified price, known as the stop price.
An order to sell a security once it reaches a specified price, in order to limit potential losses.
An order to sell a security once it reaches a specified price, in order to lock in profits.
A financial institution or individual that actively quotes both buy and sell prices for a financial instrument, in order to facilitate trading.
The price at which a buyer is willing to purchase a security.
The price at which a seller is willing to sell a security.
The difference between the bid price and the ask price of a security.
The ease with which a security can be bought or sold without causing a significant change in its price.
A measure of market expectations of near-term volatility, often referred to as the 'fear index'.
A demand by a broker for an investor to deposit additional funds or securities to meet the required margin level for a position.
The process of identifying, assessing, and prioritizing risks, and taking actions to minimize or mitigate potential losses.
A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume.
A method of evaluating securities by analyzing financial statements, economic factors, and other qualitative and quantitative information.
A financial instrument whose value is derived from an underlying asset, such as a stock, bond, commodity, or currency.
The practice of taking advantage of price differences in different markets or exchanges to make a risk-free profit.
A situation in the futures market where the price of a commodity for future delivery is higher than the spot price.
A situation in the futures market where the price of a commodity for future delivery is lower than the spot price.
A raw material or primary agricultural product that can be bought and sold, such as gold, oil, or wheat.
A statistical measure of the performance of a group of securities, representing a particular market or sector.
A type of investment fund and exchange-traded product, with shares that are traded on a stock exchange.
An investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities.
An investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets, using different strategies to generate high returns.
A clearing organization that acts as the issuer and guarantor of options and futures contracts traded on U.S. exchanges.
An independent agency of the U.S. government that regulates the futures and options markets.
An independent agency of the U.S. government that regulates the securities markets and protects investors.
A self-regulatory organization that oversees brokerage firms and their registered representatives in the United States.
A regulated marketplace where options contracts are traded, such as the Chicago Board Options Exchange (CBOE).
A regulated marketplace where futures contracts are traded, such as the Chicago Mercantile Exchange (CME).
A tool or software that allows users to practice trading options without risking real money.
A tool or software that allows users to practice trading futures without risking real money.
Computer programs or applications designed to assist traders in analyzing options strategies, pricing options, and executing trades.
Computer programs or applications designed to assist traders in analyzing futures markets, executing trades, and managing positions.
An online software or website that allows traders to access options markets, view real-time quotes, and place trades.
An online software or website that allows traders to access futures markets, view real-time quotes, and place trades.
Different approaches and techniques used by options traders to achieve their investment objectives.
Different approaches and techniques used by futures traders to achieve their investment objectives.