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When a risk has been idenifed the first option to consider in reducing the risk should be?
eliminate the risk altogether
What is The market development option that brings the highest risk?
No
What is a cylinder option?
A cylinder is a collar or risk reversal.
What is the relationship between a regular call option and binary call option and a gap call option?
Regular call options have limited risk and unlimited upside gains while binary call options have limited risk along with limited upside gain.
The investment option with the highest rate of return and highest degree of risk is?
junk bonds
What is the difference between currency future and currency option?
The difference between a currency future and a currency option is the option is the amount paid is all that is at risk and with future you could lose a lot more.
In what ammount does the strike price of an option move?
The strike price of an option does not change - strike price is fixed for the duration of the option. The price of the option will move based on the following: * Price of underlying asset (moves with - asset price goes up, option price goes up) * Time left to expiration (moves with - time left goes down, option price goes down) * Volatility of underlying asset (moves with - volatility goes up, option price goes up) * Risk free rate (moves with - risk free rate goes up, option price goes up)
What is meant by currency option trading?
Currency option trading is a common term used in financial discussions between business people. They are referring to trading currencies on the market to hedge their risk.
If prices drop what happens to call option prices?
If the price of an underlying commodity or security drops, the value of call options will decline as well. If you are long the calls this would be bad. If you are short the calls this would be good. Long Call - Risk Limited to Option Premium Paid, Profit Unlimited. Hoping for Market Rise. Short Call - Risk Unlimited, Profit limited to the premium received for the option. Hoping for Market Decline, or stay the same. Long Put - Risk Limited to Option Premium Paid, Profit Unlimited. Hoping for Market Decline. Short Put - Risk Unlimited, Profit limited to the premium received for the option. Hoping for Market Rise, or stay the same.
What is the least likely option an individual might research if saving and investing for retirement?
Most people who are saving and investing for retirement are likely to research low risk options. The least likely option someone may research are high risk ways of profiting in the stock market.
What is a commodity option trading system?
In commodity option trading each contract will have a different implied volatility. Traders in commodity options have a different perception of risk in that it is bi-directional.
Are stocks of different companies equally risky?
No. Each company as an investment option carries a different level of risk
