You Are Here: Home » Future and Options
Articles Of Incorporation
The Articles of Incorporation (sometimes also referred to as the Certificate of Incorporation or the Corporate Charter) are the primary rules governing the management of a corporation in the United States and Canada, and are filed with a state or other...
What is a Quant Fund?
An investment fund that selects securities based on quantitative analysis. In a quant fund, the managers build computer-based models to determine whether an investment is attractive. In a pure “quant shop” the final decision to buy or sell...
Mechanical Stock Investing
Mechanical Investing Buying and selling stocks according to a screen based on predetermined criteria, usually with the help of technical indicators such as relative strength or momentum. This method allows traders to enter transactions without emotion...
What is Backtesting?
Backtesting The process of testing a trading strategy on prior time periods. Backtesting (or back-testing) is the process of evaluating a strategy, theory, or model by applying it to historical data. It can be used in situations like studying how a trading...
How does Backtesting works ?
Backtesting: Interpreting the Past Backtesting is a key component of effective trading-system development. It is accomplished by reconstructing, with historical data, trades that would have occurred in the past using rules defined by a given strategy....
What is a Mini-Sized Dow Options?
Mini-Sized Dow Options is a highly leveraged index option on a futures contract in which the underlying index is the Dow Jones Industrial Average. The option has a multiplier of five, meaning that the option allows one to buy (for a call) or sell (for...
Globally Floored Contract
Globally Floored Contract is a guarantee found in structured investment products that provides a minimum payoff at maturity. A globally floored contract will protect the investor or minimize his loss in case the underlying investment loses its value. With...
Booking the Basis
A table or book of tables showing the yields of bonds at different interest rates and maturities. For example, if one is considering the purchase of a bond, one can take the coupon rate and the maturity and compare them in the basis book to determine...
Black Scholes Model
The Black–Scholes model is a mathematical description of financial markets and derivative investment instruments. The model develops partial differential equations whose solution, the Black–Scholes formula, is widely used in the pricing of European-style...
Binomial Option Pricing Model
The binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options. The binomial model was first proposed by Cox, Ross and Rubinstein (1979). Essentially, the model uses a “discrete-time” model...
Bermuda Option:An Overview
A Bermudan option is an option where the buyer has the right to exercise at a set (always discretely spaced) number of times. This is intermediate between a European option—which allows exercise at a single time, namely expiry—and an American option,...
Bermuda Swaption
A swaption with predefined limitations on exercise.The buyer of a swaption has the right to enter into an interest rate swap agreement by some specified date in the future. The swaption agreement will specify whether the buyer of the swaption will be...
Bilateral Netting: Explained
What is Bilateral Netting? Bilateral netting is a legally enforceable arrangement between a bank and a counterparty that creates a single legal obligation covering all included individual contracts.The process of consolidating swap agreements between...
Hedging in respect of Puts and Calls
Hedging With Puts And Calls In times of so much so of volatility and uncertainity in the market, some investors prefer turning their ways to hedging using puts and calls versus stock to reduce risk. Hedging can also be promoted by hedge funds, mutual...
In -The -Money :Option Trading
In the Money is a situation when your stock option is worth money and you can turn around and sell or exercise it for a profit. The strike price of an option compared to the current stock price is what determines the option’s Intrinsic Value and...
