Here's what will happen to the value of this call option under different scenarios:
Many index options are European options, so investors should be sure to understand the nature of what they’re buying.
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Now, suppose XYZ Corp. is trading at $90. If you purchase an XYZ put with a strike price of 95 for $10, its intrinsic value would be $5 (95 minus 90). The remaining 5 points (10 minus 5) of its premium is attributable to time value, which declines as the option approaches expiration. Once again, the closer the option gets to expiration, the more its value is attributed to intrinsic value.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The total paid for the option would be $1,400 ($14 times 100 shares represented by the contract). In order to recoup the $1,400 you paid for the ZYX option, its intrinsic value would need to be at least $14 by expiration. At expiration, all of the option's worth comes from intrinsic value, since there is no time value left at expiration. Thus, the stock would need to be trading at $94 (strike price plus premium paid for the option) in order for the option to have an intrinsic value of $14. In this example, if ZYX advances by at least 6 points, you will likely make money on the call purchase.
To estimate the move needed from the underlying stock for a profitable options trade, it's important to understand the concept of intrinsic value . Only in-the-money options have intrinsic value, which is the difference between the option's strike price and the current market price of the underlying equity.
The total paid for the option would be $1,000 ($10 times 100 shares represented by the contract). In order to recoup the $1,000 you paid for the XYZ option, its intrinsic value would need to be at least $10 by expiration. Thus, the stock would need to be trading at $85 (strike price minus premium paid for the option) in order for the option to have an intrinsic value of $10. In this example, if XYZ declines by at least 5 points, you will likely make money on the put purchase.
One of the most important -- and enjoyable -- aspects of trading options is the calculation of your profit.
Schaeffer's Investment Research Inc. offers real-time option trading services, as well as daily, weekly and monthly newsletters. Please click here to sign up for free newsletters. The SchaeffersResearch.com website provides financial news, education and commentary, plus stock screeners, filters and many other tools. Founder Bernie Schaeffer is the author of the groundbreaking book, The Option Advisor: Wealth-Building Techniques Using Equity & Index Options .
On a daily basis I would recommend sticking to XLSX and XSLM as standard Excel file formats. It is worth reaching out to the XLSB file format whenever you file starts running slow or uses an enormous amount of space.
XLSB file are only loaded and unloaded faster (saved and closed) than XLSX files. Afterwards both formats run in RAM memory with similar performance on the same Excel engine. Hence, you won’t see your Excel formula’s running significantly faster. However, if you do save your file frequently you will definitely notice that the XLSB file format saves faster.
Find the last used column in your worksheets
Use the XLSB file format MAINLY with very LARGE Excel files.
Find the last used row in your worksheets
Working with large Excel files is often a drag. They open slower, they take an eternity to save and they often need to be uploaded to the Cloud to be shared with your coworkers or family. Why not explore the benefits of the XSLB file format then?
XLSB will actually not benefit small Excel files and you might even see small XLSB files taking more space than small XLSX/XSLM files. Your clients / coworkers may also have doubts when opening XLSB files as Excel treats these file formats with an extra dose of caution.
The XLSB file format on the other hand is a binary Excel file. It resembles the old XLS file format which was also a binary file. What happens when Excel wants to save an XSLB file? Not much really. It mostly dumps the binary data into a binary file and saves it as XLSB.
Forex brokers, individuals or firms, help you to execute trades in the forex market. You can partner with a forex broker irrespective of where you are
Read MoreAnimal health giant Zoetis halted for volatility on takeover report
Thursday afternoon, trading in animal health company Zoetis was halted on a Wall Street Journal report that the company was approached by Canada-based drugmaker Valeant Pharmaceuticals for a potential takeover. When the stock reopened, shares soared more than 11 percent into the close. And that meant a cool win for one smart trader.
Options traders have been turning deal chatter into quick profits.
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Bullish options strategies are employed when the options trader expects the underlying stock price to move upwards. They can also use Theta (time decay) with a bullish/Bearish combo called a Calendar Spread and not even rely on stock movement. The trader can also just assess how high the stock price can go and the time frame in which the rally will occur in order to select the optimum trading strategy for just buying a bullish option.
Neutral strategies in options trading are employed when the options trader does not know whether the underlying stock price will rise or fall. Also known as non-directional strategies, they are so named because the potential to profit does not depend on whether the underlying stock price will go upwards. Rather, the correct neutral strategy to employ depends on the expected volatility of the underlying stock price.
A typical option strategy involves the purchase / selling of at least 2-3 different options (with different strikes and / or time to expiry), and the value of such portfolio may change in a very complex way.
Neutral trading strategies that are bearish on volatility profit when the underlying stock price experiences little or no movement. Such strategies include the short straddle, short strangle, ratio spreads, long condor, long butterfly, and long Calendar or Double Calendar.
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In January 2011, the call was trading at $9.00. So you would have spent about $900. Yet by the expiration month, the price had risen to $28.00, so that option "contract" you bought was worth $2,800. That's more than a 300% gain on the very same price move of GLD.
A powerful investment tool… once the exclusive domain of the most experienced high- risk traders… is now giving millions of ordinary investors record profits — even during one of the rockiest markets on record.
You could have gone "long" GLD by buying 100 shares. You'd have done pretty well; 12 months later, GLD was trading at $160, and your 100 GLD shares were worth $16,000. That's a nice 23.7% gain.
marked as duplicate by Kerrek SB, Heisenbug, Chris Laplante, WTP, SoapBox Nov 20 '11 at 22:37
Delays in production and distribution. Reduced revenue. Decreased market share. These are just some of the consequences of supply chain disruption, and you know you simply can’t afford them. Recent events—from earthquake and tsunami to windstorm—have shown just how far risk can extend.
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Partner with us and be ready. Our Supply Chain Solution, available through our FM Global Advantage® policy, offers you expert risk assessment and engineering advice, personalized to your suppliers’ locations—as well as those of your suppliers’ suppliers.
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We also facilitate the Young Investor Game for All Media Group.
Have you ever wanted to buy and sell stock on the market? However, you are unsure how to go about this; then the Jamaica Stock Exchange’s Stock Market Games present the ideal way to learn how to buy and sell shares. The JSE Stock Market Game is a simulation game that Jamaica Stock Exchange developed to promote a better understanding of the stock market and how it works. There are three games geared towards different target audiences. These are:
This was developed to generate interest among the general public in how to create wealth through the buying and selling of stocks or shares on the market. This game is very user friendly and gives persons playing a quick appreciation on what happens on the market.
The Stock Market Game for High Schools is aimed at High School students in 4th to 6th forms. It is designed to strengthen students’ critical thinking skills and build confidence and self-esteem. Most importantly, the stock market game will instill an understanding of the need to save and invest at an early age and ensure that when students leave high school they have the basic knowledge of how to buy and sell shares.
The Stock Market Game for High Schools
This game is geared towards tertiary students to assist them in having a better appreciation of the Stock Market and to understand the basic process of buying and selling shares on the stock market.
Financial Trading Journal
Accounts opened through FXCM Canada are held by Friedberg Direct. FXCM Canada clears trades through a subsidiary of FXCM Inc., a publicly traded company listed on the New York Stock Exchange (NYSE: FXCM). Customers of FXCM Canada may, in part, be serviced through subsidiaries of FXCM Inc. FXCM Inc does not own or control any part of Friedberg Direct.
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NEW YORK & TORONTO--(BUSINESS WIRE)--FXCM Inc. (NYSE: FXCM) and Friedberg Mercantile Group Ltd., today announced the launch of FXCM Canada, offered by Friedberg Direct (“FXCM Canada”).
FXCM Canada was created to allow Canadian residents access to FXCM's suite of products, including its award-winning platform and No Dealing Desk forex execution, while maintaining their accounts with a regulated Canadian firm. All accounts are held with Friedberg Direct, a division of Friedberg Mercantile Group Ltd., a member of the Investment Industry Regulatory Organization of Canada (IIROC). Friedberg is also a member of the Canadian Investor Protection Fund (CIPF), so all FXCM Canada accounts are protected by the CIPF for up to $1 million. The Friedberg Group of Companies, founded in 1971, is headquartered in the financial district of Toronto and manages over $2 billion in assets.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. A variety of important factors could cause results to differ materially from such statements. These factors are noted in FXCM Inc.'s filings with the Securities and Exchange Commission, particularly FXCM Inc.'s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2011. These factors include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, evolving industry regulations, errors or malfunctions in our systems or technology, rapid changes in technology, effects of inflation, customer trading patterns, the success of our products and service offerings, our ability to continue to innovate and meet the demands of our customers for new or enhanced products, our ability to successfully integrate assets and companies we have acquired, changes in tax policy or accounting rules, fluctuations in foreign exchange rates, adverse changes or volatility in interest rates, as well as general economic, business, credit and financial market conditions, internationally or nationally. The forward-looking statements included herein represent FXCM Inc.'s views as of the date of this release and FXCM Inc. believes that forward-looking statements made by it are based on reasonable expectations. FXCM Inc. undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.
At the heart of FXCM's client offering is No Dealing Desk forex trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution, and trading from real-time charts. FXCM's UK subsidiary, Forex Capital Markets Limited, also offers CFD products with no re-quote trading and allows clients to trade forex, oil, gold, silver, and stock indices on one platform. In addition, FXCM offers educational courses on forex trading and provides free news and market research through DailyFX.com.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
FXCM Canada Offers Canadian Residents: