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Derivatives

Extrinsic Value

The intrinsic value is the inherent value of an option determined by its underlying asset's current price. This means that the extrinsic value is influenced by factors such as time until expiration, volatility, and interest rates.

Understanding the concept of extrinsic value is crucial for investors in the realm of finance. It refers to the additional value that an option holds beyond its intrinsic price, which is based on the underlying asset's current market price. In simpler terms, it is the premium that investors are willing to pay for the potential future profits of the option. However, this value is not set in stone and is subject to various external factors such as time, volatility, and interest rates.

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 ...

Interdelivery Spread

The concept of time value of money in finance refers to the variation in price between contracts with similar terms but different expiration dates. This phenomenon is influe...

Clearing Margin

As a savvy investor, it is important to understand the concept of clearing margin and its role in securing your financial transactions. The clearing margin serves as a form ...

Let's delve into the world of finance and explore the concept of at-the-money options. These options, if exercised immediately, would result in zero cash flow. In simpler te...

In the world of finance, the concept of derivatives is a crucial one to understand. Essentially, derivatives are financial instruments that derive their value from underlyin...

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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Trading Terms

Trading Terms encompass terminology and phrases commonly used in financial markets, including terms

Stocks

All terms and concepts related to stocks, also known as equities, which represent ownership shares i

Public Offerings

All terms related to a company selling its shares or bonds to the public for the first time (IPOs) o

Taxes

All terminology and concepts related to various tax types, tax laws, and taxation principles.

Financial Instruments

Legal contracts that represent financial value, such as stocks, bonds, options, futures, and various

Market Entities

All terms related to various types of organizations or individuals, like investors, banks, insurers,

Bank Deposits

All terms and concepts related to the placement of money in a bank account, including savings accoun

Loans

All terms and concepts related to borrowing money, including different types of loans, interest rate

Fixed Income Instruments

All terms related to investments like bonds or treasury bills that provide regular, fixed payments,

Fixed Income

Investments that provide regular, fixed payments, such as bonds and treasury bills.

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