The goal of fundamental analysis is to determine whether or not the price of an asset is overvalued or undervalued. The term days to expiration (DTE) refers to the number of days until an option expires.Īn end of day order is a buy or sell order for securities requested by an investor that is only open until the end of the day.Ī financial statement that gives operating results for a specific period. If things go as hoped, it allows an investor to buy the stock at a price below its current market value.ĭue diligence is defined as an investigation of a potential investment (such as a stock) or product to confirm all facts.Ī position where the maximum loss is known (opposed to undefined risk). The cash-secured put involves writing a put option and simultaneously setting aside the cash to buy the stock if assigned. The Black-Scholes Merton (BSM) model is a differential equation used to solve for options prices.īuy in order to cover (close) an already-open short position.īuy in order to establish a new long positionĪ Broken Wing Butterfly is a long butterfly spread with long strikes that are not equidistant from the short strike.Ī covered call refers to a financial transaction in which the investor selling call options owns an equivalent amount of the underlying security.Ĭredit spreads involve the simultaneous purchase and sale of options contracts of the same class (puts or calls) on the same underlying security. The BP effect, or buying power effect, is the impact a position has on an account's available trading capital, or buying power Here are some popular investing & stock market abbreviations & definitions, used frequently & commonly, across Reddit:Īt the money (ATM) is a situation where an option's strike price is identical to the current market price of the underlying security.īuy and hold is a passive investment strategy in which an investor buys stocks (or other types of securities such as ETFs) and holds them for a long period regardless of fluctuations in the market.įor options trading, the breakeven point is the market price that an underlying asset must reach for an option buyer to avoid a loss if they exercise the option.īuying Power Effect, Buying Power Reduction
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