Trading and investing, wagers, and event contracts are all ways to try and make a profit, but they differ significantly in their approach, time horizon, and underlying mechanisms.
Posts tagged as “Underlying Asset”
Basics of Forwards Contracts
August 19, 2025 |
A forward contract is a private, non-standardized agreement between two parties to buy or sell an asset at a pre-agreed-upon price on a specific date in the future.
Basics of Options Contracts
August 19, 2025 |
An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specific date.
Basics of Derivative Contracts
August 19, 2025 |
A derivative contract is a financial agreement between two parties that "derives" its value from an underlying asset or benchmark.
Basics of Futures Contracts
August 19, 2025 |
A futures contract is a standardized, legally binding agreement to buy or sell a specific asset at a predetermined price on a specified date in the future. These contracts are traded on a futures exchange and are used for two primary purposes: hedging and speculation.
In the world of finance, bonds, equities, and derivatives are three of the most fundamental types of securities.
Off-Balance-Sheet Risk
July 16, 2025 |
Off-balance-sheet (OBS) risk refers to the potential for financial losses or liabilities arising from activities or transactions that do not appear directly on a company's balance sheet.
Stablecoin
June 19, 2025 |
A stablecoin is a type of cryptocurrency designed to minimize price volatility, unlike traditional cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH) whose values can fluctuate wildly.
Why Stock Futures Matter?
June 16, 2025 |
Stock futures are derivative contracts that obligate a buyer to purchase, or a seller to sell, a specific stock market index or individual stock at a predetermined price on a specified future date.
A Guide to Options Greeks
June 15, 2025 |
In the intricate world of options trading, understanding and managing risk is paramount. While the price of an option appears as a single number, it's a dynamic reflection of multiple underlying factors.
Market Making
May 16, 2025 |
Market making is a critical function in financial markets, acting as the lubricant that ensures smooth and efficient trading.
Trader Types
May 14, 2025 |
In the financial ecosystem, various types of traders participate with distinct goals and strategies.
Binomial Option Pricing Model (BOPM) offers a versatile and intuitive approach that appeals to both beginner investors and seasoned financial analysts alike.
Black-Scholes Model for Options Valuation
April 7, 2025 |
Grasping the fundamentals of the Black-Scholes Model can provide valuable insight into both investment strategies and risk management.
Options valuation can be crucial in assessing an investment's potential because it incorporates the flexibility to make decisions based on future developments.
Different Financial Markets and Instruments
July 31, 2024 |
The financial world can seem complex, but it is essentially a vast network of financial markets where various instruments are traded.
Introduction to Financial Instruments
July 3, 2024 |
The financial world offers a vast array of financial instruments to achieve your investment goals. But with so many options, it can be overwhelming.