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Derivatives

Exercise Settlement Amount

Understanding the concept of a stock option can be a bit tricky, so let's break it down. The strike price refers to the predetermined price at which an option can be bought or sold, while the spot price is the current market price. The difference between the two, multiplied by the lot size, determines the value of the contract. This calculation is essential in determining the profitability of a stock option.

Futures Contracts

This asset can be a commodity, stock, currency, or any other financial instrument. A fundamental concept in finance, Futures Contracts are powerful tools used to manage ris...

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Put Option

This allows them to sell the stock at a higher price, making a profit. On the other hand, a call option gives the holder the right to buy a stock at a stated price within a f...

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Out-of-the-money

An option that would result in a loss upon immediate exercise is known as an out-of-the-money option. Specifically, a Call option is considered out-of-the-money when the cur...

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Deep Discount Bonds

Deep Discount Bonds, also referred to as zero-coupon bonds, are financial instruments that are acquired at a fixed face value, and the full amount of the investment is paid ...

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