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Options and Futures

Underlying security

Options are financial derivatives that give the holder the right, but not the obligation, to buy or sell a specific asset at a predetermined price within a certain time period. This underlying asset, also known as the "security," can be a stock, bond, commodity, or currency. When an option holder decides to exercise their right, they are essentially purchasing or selling the security at the agreed upon price. This flexibility is what makes options an attractive tool for investors to manage risk and speculate on market movements.

Related terms

Market Profile®

Understand the meaning and definition of Market Profile® in the context of stock market, trading, and investments.

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Federal Funds Rate

Understand the meaning and definition of Federal Funds Rate in the context of stock market, trading, and investments.

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Liquid

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

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COM Membership

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

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Discount Method

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

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