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ABC Agreement
ABC Agreement is an agreement between a firm that finances a seat on the New York Stock Exchange and the employee who purchases the seat. The agreement, approved by the exchange, permits the member to transfer the seat to another employee of the member...
Multi Legged Option Trading Strategy
A type of order that allows an option trader to simultaneously buy or sell a number of different options that traditionally could only be achieved by placing separate orders. An option is a contract that gives the owner the right to buy or sell a security...
The Long Gut – Option Trading
The Long Gut Spread is a volatile options trading strategy designed to profit when the underlying stock moves strongly upwards or downwards. The Long Gut Spread is a cousin of the Long Straddle and the Long Strangle with the only difference being that...
Long Straddle Option Trading Strategy
A long straddle involves going long, i.e., purchasing, both a call option and a put option on some stock, interest rate, index or other underlying. The two options are bought at the same strike price and expire at the same time. The owner of a long straddle...
Put BackSpread Option- Explained
Put back spreads are great strategies when you are expecting big downward moves in already volatile stocks. The trade itself involves selling a put at a higher strike and buying a greater number of puts at a lower strike price. The put backspread is a...
Long Put Option- Explained
A put option (usually just called a “put”) is a financial contract between two parties, the writer (seller) and the buyer of the option. The buyer acquires a short position with the right, but not the obligation, to sell the underlying instrument...
Short Call -Option Trading
You short a call when you write (sell) a call that you don’t currently own. There are two basic types of short calls covered and uncovered (naked). The investor writing Call options should firmly believe that XYZ is not going up! XYZ doesn’t...
Protective Put Option – Option Trading
A put option purchased for an underlying security that is already owned by the holder of the option. A protective put defends against a drop in the share price of the underlying security. A protective put strategy is usually employed when the options...
Long Call Option : Option Trading
The long call option strategy is the most basic option trading strategy whereby the options trader buy call options with the belief that the price of the underlying security will rise significantly beyond the strike price before the option expiration...
Dangers of naked puts
What a naked put option is? A put option gives the buyer the right to sell a given stock at a given price on or before a given date. It also gives the seller the obligation to buy the stock at the given price on or before the given date.Naked puts...
Why Stock, Futures and Forex Markets Correct from Bull to Bear
When does the market goes up? Markets moves up because market participants believe in the fundamentals behind the market. At a certain point it is seen that the fundamentals change and the market corrects, however the reason fundamentals change is...
Use of options to replace stocks or futures for massive profits
Options trading strategies are being used widely by traders and investors. This article describe how to use options to replace stocks or futures. It also describe options trading strategies that uses stock options and futures options. Option trading strategies...
What are the main Asset classes in India?
What are the main Asset classes in India? What is meant by Asset Allocation? Asset allocation is about diversifying your investments across different asset classes so that you can optimise the risk return balance of your portfolio. It ensures that the...
What are Market Corrections and Volatilty ?
Understanding Market Corrections and Volatilty What is correction? A stock market correction is a relatively short lived (a few weeks to a few months) and dramatic price decline that interrupts an upward trend in the stock market. A correction is often...
What Makes a Potential Investment Good?
What Makes a Potential Investment Good? What makes a potential investment good is a question that doesn’t get asked enough by most investors. If you asked your average investor that question you would get one of two answers 1-One that goes up and 2-One...
