A stop loss order and a stop limit order are two tools that can be used by an investor to get into and out of the market at times when an investor may not be able to place an order manually. By using these orders, an investor is telling his broker that he does not […]
The strike price, also known as the exercise price, is the fixed price at which the owner of an option either can buy or sell an underlying security. The strike price is determined at the time the options contract is formed. That strike price is agreed upon between the buyer and seller of the options […]
To exercise an option means to put into effect the right specified in the options contract. An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying security at a specified price on or before an expiration date. If the option buyer decides to buy or sell the […]
The price a buyer pays for an option contract is called the option premium. This article will explain the three things that make up the pricing of an option: intrinsic value, time value and implied volatility. It is important to understand what these three things are in order to differentiate between a good and a […]
Here is a guide that can help you learn the ropes to trading options.
A binary option is a derivative financial product in which the payoff for the buyer is a fixed monetary amount if the option expires “in-the-money,” or nothing at all if the option expires “out-of-the-money.” Binary options are one of the simplest financial assets to trade, which has resulted in broad appeal amongst traders and newcomers […]