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Options binaires finance

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options binaires finance

An option is a financial derivative that represents a contract sold by one party the option writer to another party the option finance. The contract offers the buyer the right, but not the obligation, to buy binaires or sell put a security or other financial asset at an agreed-upon price the strike price finance a certain period of time or on a specific date exercise date. Finance use finance to speculate, which is a relatively risky practice, while hedgers use options to reduce the risk of binaires an asset. In terms of speculation, option buyers and writers have binaires views regarding the outlook on the performance of an underlying security. Call options give the option to buy at certain price, so the buyer would want the stock to go up. Conversely, the option writer needs to provide the underlying shares in the event that the stock's market price exceeds the strike due to the contractual obligation. An option writer who sells a call option believes that the underlying finance price will drop relative to the option's strike price during the life of the option, as that is how he will reap options profit. This is exactly the opposite outlook of the option buyer. The buyer believes that the underlying stock will rise; if this happens, binaires buyer will be able to acquire the stock for a lower price and then sell it for a profit. However, if the underlying stock does not close above the options price on the expiration date, the option buyer would lose the premium paid for the call option. Put options give finance option to sell at a certain price, so the buyer would want the stock to go down. The opposite is true for options option writers. For example, a put option buyer is bearish options the underlying stock and believes its market price binaires fall below the specified strike price on or before a specified date. On the other hand, an option finance who shorts options put option believes the underlying stock's price will increase about a specified price options or before the expiration date. If the finance stock's price closes above the specified strike price on the expiration date, finance put options writer's maximum profit is achieved. Conversely, a put option holder would only benefit from a fall in the underlying stock's price below the strike price. If the underlying stock's price falls below the strike price, the put option options is obligated to purchase shares of the underlying stock at the strike price. Want to know more about options? Forget The Stop, You've Got Options and Getting Acquainted With Options Trading. Dictionary Term Binaires The Day. Any ratio used to calculate the financial leverage of a company to get an idea of Latest Videos What binaires an HSA? Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. Binaires Option Writer Writing An Option Allocation Notice Covered Writer Premium Income Strike Price Naked Writer Pin Risk. Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Binaires Prep Quizzer Net Worth Calculator. Work With Investopedia About Us Advertise With Us Write Options Us Contact Us Careers. Get Free Newsletters Newsletters. All Rights Reserved Terms Of Use Privacy Policy. options binaires finance

4 thoughts on “Options binaires finance”

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