Sentences with phrase «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.

This describes an option where the current price of the underlying asset equals the option's strike price.

Finally, it is important to note that binary options do not trade on the actual price of the underlying asset.

«cash settlement» involves paying the difference between the futures price and the spot price of the underlying asset.

Basically, in the High / Low options, you predict the final price of an underlying asset relative to its current price.

It's important for traders to have accurate price data so they can be sure they are seeing the true price of the underlying asset.

* The change in the value of an option for each dollar change in the market price of the underlying asset.

Their ultimate goal is to avoid being out of balance in terms of delta — the measure of an option's price movement relative to the change in 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.

Britain's Financial Conduct Authority has also warned specifically about the dangers of crypto CFDs, where prices of the underlying asset can fluctuate wildly in minutes.

When you trade CFDs you're essentially speculating on the future price of the underlying asset, unlike traditional shares trading you don't physically own the asset.

Method of creating and trading derivative investment products based on a volume weighted average price of an underlying asset (Dennis O'Callahan, Catherine Shalen 2006)

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.

In this case, the futures contract (purchase or sale) is settled at the closing price of the underlying asset as on the expiry date of the contract.

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.

Additionally, when you invest in futures ETFs you run the risk of contango, which is when the future price of an underlying asset is out of step with what is happening right now.

If, on the other hand, the spread between a future traded on an underlying asset and the spot price of the underlying asset was set to widen, possibly due to a rise in short - term interest rates, then an investor would be advised to sell the spread (i.e. a calendar spread where the trader sells the near - dated instrument and simultaneously buys the future on the underlying).

CFD prices closely follow the market price of the underlying asset, although there may be divergence if there is limited liquidity in the CFD market.

Although these prices may be indicative of the underlying market for the product being traded, they do not represent the actual prices of the underlying asset on the physical market or exchange where it is listed.

This might be a result of the increasing price of the underlying asset (ceteris paribus, as the price of bitcoin rises, so would the volume of exchange).

These financial products track the price of an underlying asset (in this case, bitcoin) and gain or lose value relative to that base asset.

Ownership of the asset (in this case silver) never lies in the hands of the trader, they are simply speculating on whether the price of the underlying asset will increase or decrease.

Your binary options trading decisions could hardly be any more straightforward as you only have to choose in which direction the price of your underlying asset will move, i.e. either up or down.

With these options, money is made when the price of the underlying asset increases in value.

These are bullish bets — you believe that the price of the underlying asset will rise by a specified time.

There is a higher chance that an option will provide a larger payoff when the future volatility of the underlying asset is higher, because it is more likely that the price of the underlying asset will move more in favour of the option buyer while at the same time the option buyer is not exposed to the adverse movements in the price.

The price of a CFD is derived from the price of the underlying asset (including shares, indices commodities and ETFs; please refer to our CFDs list section for details) which can be highly volatile.

A kind of binary option that pays out if the price of the underlying asset increases to above the option's strike price.

A type of binary option that pays out when the price of the underlying asset falls beneath the strike price of the option at expiration.

In this case the price of the underlying asset is beneath the strike price of the option in the case of call options or above the price of the option in the case of put options.

You then need to forecast in which direction you anticipate the price of the underlying asset of your option to progress.

In particular, futures and forwards provide information about the expected future price and options provide information about the volatility and risk associated with the price of the underlying asset.

Derivative trading involves a lot of arbitrage which brings about price corrections and thus help in reflecting the correct and true economic value and price of the underlying assets.

The textbook definition is this: «Delta is the ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative.»

The delta will change depending upon the price of the underlying asset.

That may be partially true, but I doubt the prices of the underlying assets are so easily affected.

Oversold is a condition in which the price of an underlying asset has fallen sharply, and to a level below where its true value resides.

Futures contracts are used to manage potential movements in the prices of the underlying assets.

Conversely, if the price of an underlying asset is expected to fall, some may sell the asset in a futures contract and buy it back later at a lower price on the spot.

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.

So although the price of the underlying asset will vary, you decide how much to invest.

To pick an option that has the potential to turn a profit, an investor needs to assess the value of an option according to her belief of whether the price of the underlying asset will go up or down.

Oversold is a condition in which the price of an underlying asset has fallen sharply to a level below where its true value resides.

If the price of the underlying asset goes up in the future, the price of the futures contract goes up too, and vice versa.

Identifying areas where the price of an underlying asset has been unjustifiably pushed to extremely low levels is the main goal of many technical indicators such as the relative strength index, the stochastic oscillator, the moving average convergence divergence and the money flow index.