Sentences with phrase «market price of the underlying asset»

Out of the money If an option is «out of the money» it is usually not worth exercising given the current market price of the underlying asset.

In the money means that a call option's strike price is below the market price of the underlying asset or that the strike price of a put option is above the market price of the underlying asset.

The price offered may or may not diverge significantly from the market price of the underlying asset.

On the contrary, you will generally suffer a loss, if the market price of the underlying asset falls whilst your CFD long position is open.

On the contrary, you will generally suffer a loss, if the market price of the underlying asset rises whilst your CFD short position is open.

Being Long in a CFD means you are buying the CFD's on the market by speculating that the market price of the underlying asset will rise between the time of the purchase and sale.

As owner of a long position, you will generally make a profit if the market price of the underlying asset rises whilst your CFD long position is open.

Not exact matches

It's just dealing with a market where certain investors are temporarily willing to invest at prices that exceed the underlying value of the assets.

The GBTC trades like a closed - end - fund usually at a price that is substantially different than the value of the underlying asset, and does not possess the ability to create or redeem shares in the open market.

Authorized participants may wish to invest in the ETF shares long - term, but usually act as market makers on the open market, using their ability to exchange creation units with their basic securities to provide liquidity of the ETF shares and help ensure that their intraday market price approximates to the net asset value of the underlying assets.

Large market participants bid up the price of bitcoin in the weeks prior to the CBOE launch, loading up on the underlying asset and then offsetting that exposure by shorting futures.

The market price is the number most commonly quoted, including by most brokers; the value of the underlying assets is much less widely available.

Market price does not always accurately reflect the underlying value of the asset (see below).

The economic analysis and asset pricing component provides an introduction to the function of markets generally as well as the economic and financial theory that underlies derivatives pricing and hedging.

Most of the large tracking error in the Vanguard MSCI U.S. Broad Market (VUS) was likely the result of currency hedging, but its annual report also cites «differences between the market price and net asset value of the underlying US domiciled Vanguard funds in which the ETF invests.&Market (VUS) was likely the result of currency hedging, but its annual report also cites «differences between the market price and net asset value of the underlying US domiciled Vanguard funds in which the ETF invests.&market price and net asset value of the underlying US domiciled Vanguard funds in which the ETF invests.»

If market participants anticipate an increase in the price of an underlying asset in the future, they could potentially gain by purchasing the asset in a futures contract and selling it later at a higher price on the spot market or profiting from the favorable price difference through cash settlement.

Share prices can deviate from the fund's net asset value of the underlying securities it holds, as market forces of supply and demand can lead to a trading discount or premium.

The shares of the Spain Fund, Inc., a closed - end mutual fund investing in publicly traded Spanish securities, were bid up in price from approximately net asset value (NAV)-- the combined market value of the underlying investments divided by the number of shares outstanding — to more than twice that level.

If you sell a Naked Call or Put Option, you should have underlying assets or an open position in the futures market to protect you from an unlimited loss arising out of adverse price movements.

Investing in commodities indices that are constructed using long or short positions in futures on physical commodities whose value is determined based on the price of the underlying physical commodity plus yield and that trade on public markets that provide adequate liquidity and transparency, with negligible costs and no storage deterioration risk, offer a practical method to gaining commodities exposure and can provide a means for market participants to access the five components of the returns of the asset class.

Risks associated with derivatives (including «short» derivatives) include losses caused by unexpected market movements (which are potentially unlimited), imperfect correlation between the price of the derivative and the price of the underlying asset, increased investment exposure (which may be considered leverage), the potential inability to terminate or sell derivatives positions, the potential need to sell securities at disadvantageous times to meet margin or segregation requirements, the potential inability to recover margin or other amounts deposited from a counterparty, and the potential failure of the other party to the instrument to meet its obligations.

The intrinsic value is an easy calculation - the market price of an option minus the strike price - and it represents the profit that the holder of the option would enjoy if he or she exercised the option, took delivery of the underlying asset and sold it in the current marketplace.

As with all CEF investments, there is an additional potential for profit besides the increase in value of the underlying assets per share (also called Net Asset Value or NAV), which is the improvement of their market price relative to their NAV.

Consider an over-the-counter (OTC) option sold (written) by Bank A to Customer C. Market risk refers to the fluctuating value of the option; if it is daily - mark - to - market, its value will be a function largely of the underlying asset price but also several other risk faMarket risk refers to the fluctuating value of the option; if it is daily - mark - to - market, its value will be a function largely of the underlying asset price but also several other risk famarket, its value will be a function largely of the underlying asset price but also several other risk factors.

But what we are mostly concerned with is the change in the value of the underlying assets and to what extent this has been reflected in the market price.

The market price of an ETF unit should be close to the NAV per unit of the underlying assets.

The Black — Scholes formula has only one parameter that can not be directly observed in the market: the average future volatility of the underlying asset, though it can be found from the price of other options.

Options contracts are priced solely by the trading price of the underlying asset, so even if your multiple account trading could only at best break even when you sell your final holdings (basically resetting the price to where it was because you started distorting it), this is fine because your real trade is in the options market.

Futures traders are traditionally placed in one of two groups: hedgers, who have an interest in the underlying asset (which could include an intangible such as an index or interest rate) and are seeking to hedge out the risk of price changes; and speculators, who seek to make a profit by predicting market moves and opening a derivative contract related to the asset «on paper», while they have no practical use for or intent to actually take or make delivery of the underlying asset.

Market makers adjust for such skewness by, instead of using a single standard deviation for the underlying asset σ -LCB- \ displaystyle \ sigma -RCB- across all strikes, incorporating a variable one σ (K)-LCB- \ displaystyle \ sigma (K)-RCB- where volatility depends on strike price, thus incorporating the volatility skew into account.

The creation and redemption mechanisms help ETF shares trade at a price close to the market value of their underlying assets.

While closed - end funds often trade at a premium or discount because they have a fixed number of shares outstanding, market makers work with authorized participants (APs) to strive to keep the price of ETF shares close to fair value (i.e., in line with the ETF's underlying net asset value (NAV)-RRB-.

Authorized participants may wish to invest in the ETF shares for the long - term, but usually act as market makers on the open market, using their ability to exchange creation units with their underlying securities to provide liquidity of the ETF shares and help ensure that their intraday market price approximates to the net asset value of the underlying assets.

If this is the case, he may not care too much about market pricing of the units, as management fees are based on underlieing asset value, not market prices.

The CFD prices of direct market access providers correspond directly to the prices of those assets in the underlying market.

The AP delivers a certain amount of underlying securities and receives the exact same value in ETF shares, priced based on their net asset value (NAV), not the market value at which the ETF happens to be trading.

The performance of your CFD or Spot FX Contract will depend on the prices set by NSFX and market fluctuations in the underlying asset to which your contract relates.

I agree that market forces can affect the price of shares vs. the underlying asset value; it's interesting however that all except one of the ETFs is LOWER than the expect NAV based on the index performance.

Instead, you are betting on the price of a fictitious underlying market that is supposed to replicate the price movements of the actual asset.

Instead, they are much worse as the binary options market moves with the price of the underlying asset.

We're willing to bet that the number of participants that will enter based on the former altered situation is far smaller than the number that will enter based on the latter (i.e., the number of longs is going to dramatically outweigh the number of shorts) and, in turn, the net impact of a bitcoin futures market on the price of the underlying asset will be very much bullish.

In fact, just as the futures markets opened for the first time, the market price of Bitcoin on Coinbase jumped from $ 14,810 to $ 16,171 in a matter of minutes, demonstrating that, despite light volume, the futures prices may have some effect on its underlying asset.