Chooser Option

Chooser Option

Chooser Option

An option contract that allows the holder to decide the nature of the option i.e., whether the option is a call or put before the expiry date is called a Chooser Option. It is an option contract where the holder may choose at some point during the life of the option whether the option is a call or a put. These options have the same strike price and expiry date regardless of it being a call or a put. (more…)
reference data in trading

Reference Data in Trading

Reference Data in Trading

Trading, here, refers to the transfer of a stock or security from the seller to the buyer. There is a number of risks involved in trading such as Liquidity Risk, Market Risk, Credit Risk, Interest rate risk, and so on. Along with all the risks mentioned, consideration of Operational Risk is also of so much importance. Operational risk refers to uncertainties and hazards faced in performing day-to-day or routine activities. --- Change it  (more…)
Vega in Options Trading

Vega in Options Trading

Vega in Options Trading

Vega is the Greek that measures the sensitivity of an option to implied volatility; denoted by the Greek letters. It is the change in the options price for a one-point change in implied volatility. Traders usually refer to the volatility without the decimal point. Options Vega denotes the option’s price sensitivity to changes in the volatility of the underlying asset. It measures how much the option’s price changes in response to a 1% change in the implied volatility of the underlying asset. This article aims to provide an overview of Vega in Options Trading. (more…)
Stop – Loss Order

Stop – Loss Order

Stop – Loss Order

There are three common types of orders. A market order, limit order, and stop-loss order. Market order – Market order is an order to buy or sell a security immediately. This order will not guarantee the execution price but will definitely guarantee the time of execution. It will generally execute at or near the ask or bid price. Limit order – Buying or selling a security at a specific price or better is known as a limit order. Buy limit order and sell limit orders will only be executed at the limit price or higher and limit price or lower respectively. Stop-loss order – It means an order to buy or sell a stock once the price of the stock reaches the specified price, known as the stop price. A stop order becomes a market order when the stop price is reached. (more…)
Trade enrichment

Trade Enrichment

Trade Enrichment

Enrichment refers to the action of improving or enhancing the quality or value of something by adding something else. It makes something more meaningful and rewarding. Thus, it can be said that trade enrichment means the action of enhancing the quality of trade, by applying relevant data, with the purpose of improving its efficiency. Trade enrichment makes the trade more worthy and rewarding. (more…)
Equity market

Equity market

Equity market

An equity market is a market during which shares of companies are issued and traded, either through exchanges or over-the-counter markets. Also referred to as the stock exchange, it's one among the foremost vital areas of a free enterprise, it gives companies access to capital to grow their business, and investors a bit of ownership during a company with the potential to understand gains in their investment supported the company's future performance. (more…)
Asian options- Benefits and Risks

Asian options- Benefits and Risks

Asian options-Benefits and Risks

An Asian option is an option type where the payoff depends on the average price of the underlying asset over a certain period as opposed to standard options where the payoff depends on the price of the underlying asset at a specific point in time that is maturity. (more…)
Falling Knife

Falling Knife

Falling Knife

Sharp drops in stocks seen during a week’s time are referred to as a ‘Falling knife”. It is a term used to describe a quick drop in the price of a security, such as a stock. It does not have a specific magnitude or duration to drop before a falling knife constitutes. (more…)
High-Frequency Trading

High-Frequency Trading

High-Frequency Trading

High-frequency trading (HFT) is a trading method where powerful computer programs are used to carry out a large number of orders and transactions in less than a second. It is an automated trading platform that is used by large investment banks, hedge funds, etc. Multiple markets are analyzed and orders are executed by using complex algorithms.

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Exotic Options

Exotic Options

Exotic Options

Options are versatile financial products. Options are a type of derivative that derives their value from the value of the underlying asset. An option contract is a financial contract that gives the investor an opportunity to buy or sell an asset at a pre-determined price at a specific date. Options are of two types: call option and put option. The call option allows the investor to buy the asset and a put option allows the investor to sell the asset at a specific price on a specific date. Every options contract has an expiry date by which the holder must exercise the option. (more…)