Sentences with phrase «opposite position in the futures»
Hedging The practice of offsetting the price risk inherent in any cash market position by taking an equal but opposite position in the futures market.
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The practice of offsetting the price risk inherent in any cash market position by taking an opposite position in the futures market.
Not exact matches
Uncovered Option: The Sale of a put or a call without holding an equal or opposite position in the underlying futures contract.
Naked Option: A naked option involves the sale of a call or put option without holding an equal and opposite position in the underlying instrument; in this case, a futures contract.
Usually it involves opposite positions in the cash market and futures market at the same time.
Option sellers are generally seen as taking on more risk because they are contractually obligated to take the opposite futures position if the options buyer exercises their right to the futures position specified in the option.
An arbitrage position can be established by taking an economically opposite position in a security futures contract on another exchange, in an options contract, or in the underlying security.