Long Combo
Long Combo Long Combo Table of Contents Basics Concepts – Long Combo Description – Long Combo The Long Combo is a variation of the Long Synthetic Future. The only difference is that we sell OTM (lower strike) puts and buy OTM (higher strike) calls. The net effect is an inexpensive trade, similar to a Long […]
Futures V/s Options
Futures V/s Options Futures V/s Options Table of Contents Futures and Options Contract: An Overview A derivative instrument is the obligation to sell or buy an asset at a later date at an agreed-upon price. Futures contracts are a real hedge investment. on the other hand, An options contract gives an investor the right, but […]
Short Synthetic Future
Short Synthetic Future Short Synthetic Future Table of Contents Basics Concepts – Short Synthetic Future Description – Short Synthetic Future We can synthetically create the risk profile or a short stock position by buying ATM puts and selling ATM calls. The net result is a virtually nil cost or even net credit trade that precisely […]
Future Pricing
Future Pricing Future Pricing Table of Contents Cost of Carry Cost of carry refers to costs associated with the carrying value of an investment. These costs can include financial costs, such as the interest costs on bonds, interest expenses on margin accounts, interest on loans used to make an investment, and any storage costs involved in […]
Long Synthetic Future
Long Synthetic Future Long Synthetic Future Table of Contents Basics Concepts – Long Synthetic Future Description – Long Synthetic Future We can synthetically create the risk profile or a long stock by selling ATM puts and buying ATM calls. The net result is a very inexpensive, nil cost, or even net credit trade that precisely […]
Options Terminology
Options Terminology Options Terminology Table of Contents Options Basics Options emerged as a financial instrument, which restricted the losses with a provision of unlimited profits on buy or sell of underlying asset. An Option is a contract that gives the right, but not an obligation, to buy or sell the underlying asset on or before […]
Application of Futures
Application of Futures Application of Futures Table of Contents Hedging using Futures Long Hedge Long hedge is the transaction when we hedge our position in cash market by going long in futures market. For example, we expect to receive some funds in future and want to invest the same amount in the securities market. We […]
Futures V/s Forwards
Futures V/s Forwards Futures V/s Forwards Table of Contents Futures V/s Forwards: An Overview Futures are exchange-traded contracts to sell or buy financial instruments or physical commodities for a future delivery at an agreed price. On the other hand, a forward contract is a customized contract between two parties, where settlement takes place on a specific […]