Option belong to the group. Derivatives. Derivatives are futures flea market nyc contracts (fixed o

In the world of trading inflects the term "option" in all cases. Options are often shrouded in a sort of aura of exclusivity and many novice or inexperienced traders are afraid of them. If we try to trace the options flea market nyc for more information, encounter mostly very complicated and obscure interpretations that the vast majority of people hungry for information discouraging. These are often full of interpretations of formulas, mathematical calculations and terms that are largely flea market nyc unknown to the layman. Find more "user friendly" way of explaining the basic principle of options trading may not be so difficult. flea market nyc Let us therefore now clear interpretation of such attempt. flea market nyc
History of options falls into the deep past. We meet with them already at the old Babylonians. However, more interesting for us will be to modern history. With the first standardized option contract began trading in 1973, when it was created flea market nyc Chicago Options Exchange (Chicago Board of Options Exchange - CBOE). Eventually began to emerge as another option exchanges which are currently an integral part of the global stock market system. However Options can be traded and OTC. In such event, subject to standardization and are mostly used by banks to hedge risks of their clients.
Option belong to the group. Derivatives. Derivatives are futures flea market nyc contracts (fixed or option), while currently closed conditions flea market nyc for buying or selling the underlying asset, but to implement the trade occurs under these conditions in the future. Let us now look at the textbook definition option. It is the right to buy or sell a predetermined underlying asset at a predetermined price on a predetermined date. What are we to imagine under this definition? The best explain this with an example that the world has nothing to exchanges.
Imagine the very standard of living situation that you plan to buy a house. Zaid therefore do real estate agents, real estate agent where you offer for the price of 5 million CZK house, which is currently under construction. Agree that you are interested in the house. To ensure the possibility (or right) to buy the house after its completion, an agreement for future contract and complex real estate agency deposit of CZK 100 000. In this contract also speak of the purchase price, the quality of the future house, and the date on which the real estate agent commits flea market nyc you ready to sell the house. Suppose that the expiration date of the contract, it means the date on which occur in the future to sell the house for the agreed conditions will be 6 months. During this time can cost a lot of things. If you come in 6 months for a real estate agent, two things will happen. Either lose interest or property actually buy it. In the event that the property is not interested and does not exercise his right to buy real estate, real estate agent will leave your deposit in the amount of CZK 100 000 which you had paid 6 months ago. You will lose the deposit and it is your loss. Conversely, a real estate broker, flea market nyc this deposit becomes profit. If you decide to buy a house, this deposit will be deducted from the purchase price of the house.
Let us describe the situation translate into the language of option trading. A real estate agent would be an option terminology sponsoring option because you sold the right (= option or option) to buy a predetermined date (= 28 May 2014, ie 6 months) flea market nyc house at a predetermined price (5 000 000 CZK). The writer of the option has the obligation underlying asset (= house) to sell, but the buyer of the option has the right but not the obligation, to buy the underlying asset. flea market nyc Under the invitation of the option receives a writer called. Premium. Premium in our case payment on a house of 100 000 CZK.
You are now the principle of options trading has been any clearer? It is nothing like what you would not know from everyday life. The option shall weigh underlying assets such as stocks, commodities, stock indices, currency pairs or ETFs. More about this method of trading will discuss in future articles, where we become acquainted with the types of options and ways of trading.
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