Options spreads are strategies that use various combinations of buying and selling different options for the desired risk-return profile. Spreads are constructed usingvanilla options, and can take advantage of various scenarios such as high- or low-volatility environments, up- or down-moves, or anyt...
Investopedia / Jiaqi Zhou Understanding Options Contracts Options contracts are valued based on theunderlying securities. These contracts allow the buyer to buy or sell—depending on the type of contract they hold—the underlying asset at a price set out in the agreement, either within a specific ...
Both types of spreads help investors assess risk and make decisions, but term spreads provide insights into the broader interest rate environment and expectations for future economic conditions. For example, a narrowing term spread may suggest that investors expect stable or declining interest rates, w...
Examples of options strategies born out of financial engineering efforts includemarried put,protective collar,long straddle,short strangles,butterfly spreads, etc. Speculation The field of financial engineering has also introducedspeculativevehicles in the markets. For example, instruments such as thecredit...
A condor spread is a combination strategy that involves multiple options purchased and/or sold at the same time. Types of Condor Spreads 1. Long Condor With Calls This results in a net DEBIT to account. Image by Julie Bang © Investopedia 2020 ...
Let's say that an options trader purchased one Bank of America (BAC)call optionlast month. The option has astrike priceof $24.50 and it expires this month. The options holder can purchase 100 shares of BAC at the strike price of $24.50 if they exercise their call option today when the ...
The ease-of-use for nominal yield spreads comes with certain drawbacks attached to it. For example, the spread does not reveal underlying options or derivatives and their associated risks. It also does not consider spot maturities, which can make a difference to the overall demand, for the bon...
Investopedia / Ryan Oakley What Are the Types of Bankruptcy Filings? Bankruptcy filings in the United States are categorized by which chapter of the Bankruptcy Code applies. For example,Chapter 7involves the liquidation of assets,Chapter 11deals with company or individual reorganizations, andChapter ...
Options Market The options market allows traders to buy or sell currency options, which give the holder the right, but not the obligation, to exchange currency at a specific rate before a certain date.11 Here are some features of theforex options market: Hedging and speculation: Used for both...
Over-under bets are popular with people who are new to sports gambling because they work in a simple way. Over-under bets are among the most popular wagering options in sports betting, behindpoint spreadsandmoneylinebets. They are also easier for the beginner to understand thanteaser bets. ...