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Options and Futures

Premium (futures)

Futures contracts, also known as derivatives, are agreements between buyers and sellers to exchange a specific asset at a predetermined price and date in the future. The difference between the contract price and the current market price is known as the basis. When trading futures options, the buyer pays a premium to the seller for the right to purchase or sell the underlying asset at a specific price. It's important to note that the buyer pays the premium, while the seller receives it. Understanding these terms is crucial in navigating the world of finance and investing.

Related terms

Close

Understand the meaning and definition of Close in the context of stock market, trading, and investments.

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Option Seller

Understand the meaning and definition of Option Seller in the context of stock market, trading, and investments.

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Commodity Credit Corp.

Understand the meaning and definition of Commodity Credit Corp. in the context of stock market, trading, and investments.

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Out-of-the-Money Option

Understand the meaning and definition of Out-of-the-Money Option in the context of stock market, trading, and investments.

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Gamma

Understand the meaning and definition of Gamma in the context of stock market, trading, and investments.

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Registered Representative

Understand the meaning and definition of Registered Representative in the context of stock market, trading, and investments.

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