Central Bank
A central bank is an establishment that oversees the monetary system for a single nation or group of countries. With various responsibilities, many modern central banks do more than simply regulate money flow and print currency. They also maintain monetary policies including outlining and implementing financial planning goals. Central banks continuously More...
Historical Volatility
Also known as “statistical volatility”, historical volatility means the realized volatility of a certain financial instrument and measuring how much the deviation occurs from the average price during said time. The More...
Intrinsic Value and Extrinsic Value (of an option)
Intrinsic value, or actual value or inherent worth of a stock, company or an asset, is based on the overall perception of its true value that incorporates all parts of the company, stock or asset. This may or may More...
Delta
The Greek term Delta is used to assess how much an option’s price changes when the underlying security’s price fluctuates. This is a type of tool used to balance a portfolio that includes equal amounts of positive More...
Covered Option and Covered Call
A covered option gives investors less exposure to risk than a naked trade where the investor does not own the underlying security that the investor is hedging against. If the underlying asset value does not fall, More...
Collar
An options strategy which will limit the potential gains or losses on an underlying asset in a specific range. A Collar is opposite to the Condor (long) which is similar to the butterfly spread, but the Condor (long) More...
Call Diagonal Spread
This is a strategy for options where the investor takes two options of the same kind, and puts one into long position and the other into the short position, (two call options or two put options) but with different More...
Butterfly Strategy
An option strategy utilizing both bear and bull spreads and this option creates a neutral effect. By using all four option contracts, under the same expiration but three different strike prices, an investor creates More...
Bull Put Spread
An options strategy used when investors expect a moderate rise in the price of the underlying asset and is most often a vertical spread. Investors purchase put options at a certain strike price while also selling More...
Bull Call Spread
This is an options strategy used when investors expect a moderate rise in the price of the underlying asset and is most often a vertical spread. Investors purchase call options at a certain strike price while also More...