Stock Options and Futures

Option Explicit makes the declaration of Variables Mandatory while Option Base used at module level to declare the default lower bound for array subscripts. For eg. Option Base 1 will make the array lower bound as 1 instead of 0.

by Munendra

A reinstatement option is a clause in an insurance policy that allows the policyholder to reinstate their coverage after it has lapsed or been canceled due to non-payment of premiums or other reasons. Reinstatement options are typically offered within a specified period after the policy has lapsed, and the terms and conditions of reinstatement may vary depending on the insurance company and policy.

To reinstate a policy, the policyholder usually needs to pay the outstanding premiums, interest, and any other charges that may apply. In some cases, the insurance company may require the policyholder to undergo a new underwriting process or provide additional information before reinstating the policy.

Reinstatement options are beneficial for policyholders who may have missed premium payments due to financial difficulties or other reasons but still want to maintain their insurance coverage. It allows them to continue their policy without having to purchase a new one, which may be more expensive or require additional underwriting.

However, it's important to note that not all insurance policies offer reinstatement options, and the availability and terms of reinstatement may vary depending on the type of insurance and the insurance provider.

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The Jag Notes were founded by University of Louisville students Matt Biven and Jeremy Waits in 2008. They created the group to perform original music as well as popular covers.

The stock market story There were 3 citizens living on this island country. "A" owned the land. "B" and "C" each owned 1 dollar. "B" decided to purchase the land from "A" for 1 dollar. So, "A" and "C" now each own 1 dollar while "B" owned a piece of land that is worth 1 dollar. The net asset of the country = 3 dollars. "C" thought that since there is only one piece of land in the country and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from "A" and together with his own 1 dollar, he bought the land from "B" for 2 dollars. "A" has a loan to "C" of 1 dollar, so his net asset is dollar. "B" sold his land and got 2 dollars, so his net asset is 2 dollars. "C" owned the piece of land worth 2 dollars but with his 1 dollar. debt to "A", his net asset is 1 dollar. he net asset of the country = 4 dollars. "A" saw that the land he once owned has risen in value. He regretted selling it. Luckily, he has a 1 dollar loan to "C". He then borrowed 2dollars from "B" and acquired the land back from "C" for 3dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to"C". As a result, "A" now owned a piece of land that is worth 3 dollars. But since he owed "B" 2 dollars, his net asset is 1 dollar. "B" loaned 2 dollars to "A". So his net asset is 2 dollars. "C" now has the 2 dollars. His net asset is also 2 dollars. The net asset of the country = 5 dollars. A bubble is building up. "B" saw that the value of land kept rising. He also wanted to own the land. So he bought the land from "A" for 4 dollars. The payment is by borrowing 2 dollars from "C" and cancellation of his 2 dollars loan to "A". As a result, "A" has got his debt cleared and he got the 2 coins. His net asset is 2 dollars. "B" owned a piece of land that is worth 4 dollars but since he has a debt of 2 dollars with "C", his net asset is 2 dollars. "C" loaned 2 dollars to "B", so his net asset is 2 dollars. The net asset of the country = 6 dollars. Even though, the country has only one piece of land and 2 dollars in circulation. Everybody has made money and everybody felt happy and prosperous. One day an evil wind blowed. An evil thought came to "C"'s mind.'Hey, what if the land price stop going up, how could "B" repay my loan. There are only 2 dollars in circulation, I think after all the land that "B" owns is worth at most 1 dollar only. "A" also thought the same. Nobody wanted to buy land anymore. In the end, "A" owns the 2 dollar coins, his net asset is 2 dollars. "B" owed "C" 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. His net asset become -1 dollar. "C" has a loan of 2 dollars to "B". But it is a bad debt. Although his net asset is still 2 dollar, his heart is palpitating. The net asset of the country = 3 dollars again. Who has stolen the 3 dollars from the country? Of course, before the bubble burst "B" thought his land worth 4dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on papers. His net asset is still 2 dollar, his heart is palpitating. The net asset of the country = 3 dollars again. "B" had no choice but to declare bankruptcy. "C" has to relinquish his 2 dollars bad debt to "B" but in return he acquired the land which is worth 1 dollar now. "A" owns the 2 coins, his net asset is 2 dollars. "B" is bankrupt, his net asset is 0 dollar. ("B" lost everything) "C" got no choice but end up with a land worth only 1 dollar ("C" lost one dollar) The net asset of the country = 3 dollars. There is however a redistribution of wealth. END OF THE ANECDOTE "A" is the winner, "B" is the loser, "C" is lucky that he is spared. ANALYSIS TIME Few points worth noting: When a bubble is building up, the debt of individual in a country to one another is also building up. This story of the island is a close system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss. An over damped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar. When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the loser.. The asset could shrink or in worst case, they go bankrupt. If there is another citizen "D" either holding a dollar or another piece of land but he refrained to take part in the game, he will, at the end of the day, neither win nor lose. But he will see the value of his money or land go up and down like a see-saw. When the bubble was in the growing phase, everybody made money. If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like "A") and take part in the game. But you must know when you should change everything back to cash. Instead of land, the above applies to stocks as well. The actual worth of land or stocks depend largely on psychology.

Futures are contracts that allows you to buy certain commodities at a certain price by a certain date. Unless closed out, futures contracts are binding and the buyer of the contract must be able to buy the commodities binded by the contract.

Options are contracts that gives you the RIGHTS but not the OBLIGATION to buy certain stocks or commodoties at a certain price by a certain date. The main difference is, you can choose to ultimately buy the underlying asset or not, its not binding on the buyer.

Trading options are the options that you have when you trade. This mostly applies to when you trade stocks. There are many options of stock for you to choose from and they are the trading options.

Each stock are stated as a percentage known as the par value.

"Shorting a call" is better known as writing a naked call. Basically, a naked call is a call on a position you don't hold, and it has unlimited risk--if you get exercised and the strike price plus the premium is lower than the stock price, you must make up the difference out of your margin account--or you'll receive a margin call from your brokerage. Many brokerages won't allow you to write a naked call, and the ones that will demand a very large margin account and a lot of experience in trading options.

There are actually three similar derivatives: futures, forwards and options.

Futures contracts say, in essence, "On September 15, 2009, Rockford Grain Growers will deliver to General Mills 100,000 bushels of wheat for $5 per bushel." The risk to the buyer is that wheat will sell on the spot market for $4.75 per bushel and he'll lose a lot of money, but that's counterbalanced by the risk it's going to sell on the spot market for $6 if he doesn't have a futures contract. Basically, this stabilizes finished product prices: if you know wheat's going to cost X and wheat is 90 percent of your product, you can call Walmart and tell them, "next fall our food is going to cost this amount."

Forwards contracts say almost the same thing: "On or before September 1, 2009, John Smith Wheat Growing will deliver to Rockford Grain Growers his entire wheat crop for $4.25 per bushel." Futures don't really work for farmers because they're not always entirely sure how much they are going to harvest. Forwards, which don't state quantity, are better. There are two risks to the buyer here: that the farmer won't be able to deliver enough wheat for the elevator to meet its futures contracts; and that the farmer will deliver so much he won't have anywhere to put it.

Options say, "on October 15, 2009, General Foods may purchase 20,000 bushels of wheat from Rockford Grain Growers for $5.50 per bushel." Commodities users buy both contracts because they have to--they KNOW they need 100,000 bushels of wheat, but if their new cereal gets popular they will need more wheat so they buy a set of options just in case.

Futures are only good if you buy the stuff to use it. Some guys buy these to speculate--if they think wheat is going through the roof, they can buy a future a year out and sell it for cheaper than an option would be later on, but that's kinda risky: if you can't get rid of your futures contract when it matures, some guy in a big truck will show up in front of your building asking where you want the wheat you bought

identify and report deviations

It's called a "stock buyback." These are covered by SEC Rule 10b-18, which says: the issuer or affiliate must purchase all shares from a single broker or deal during a single day. issuers can't buy stock on the first trade of the day, or close to the end of it. issuers must repurchase at a price that doesn't exceed the highest independent bid or the last transaction price quoted. the issuer can't purchase more than 25 percent of the stock's average daily volume.

Gilt-edge securities are those considered the safest investments. If they were stocks, they'd be called Blue Chips.

SPAN means Standardized Portfolio Analysis of Risk. It's how they're calculating margin requirements for futures trading now.

The Securities and Exchange Board of India was established on April 12, 1992. SEBI is the primary governing/regulatory body for the securities market in India. All transactions in the securities market in india are governed & regulated by SEBI

The general term Price of Oil usually referees to the next month yet-unexpired futures contract for the Light Sweet Crude (West Texas Intermediate) oil. Thus, the equilibrium for such defined Oil Price is established by investor's expectation about supply and demand conditions for the yet-unexpired-next-month future contract. Such expectations about supply-demand conditions for the future contracts are driven both by expectations about fundamental supply-demand conditions of the real physical crude oil markets, as well as speculative so-called momentum plays.

The Bombay Stock Exchange is the oldest stock exchange in India, and one of the best capitalized exchanges in the world.

The full form of FII is " Foreign institutional investors".

Closing Stock (Assets, Balance Sheet) A/C Dr. -----

Trading or P/L A/C Cr. (Expenses, Trading or P/L) A/C -----

The Dr. entry of the closing stock will remain as assets in

inventory and will be carried forward to next year where as

Cr. entry will be deducted [opening stock+purchase-closing

stock (trading)] as like expenses in Trading or P/L A/c and

not will be carried forward to the next year.

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Stock only needs to be one account (not both Opening and Closing accounts).

Post it's balance to P&L (Cost Of Sales) as "Opening Stock".

Journalise the new Stock figure as a credit "Closing Stock" to P&L (Cost Of Sales)

and debit the Stock account.

Calculate Cost Of Sales as above.

Stock holding refers to the number of shares or stocks that one owns. A security is a document that shows one's ownership of stock.

Cash Securities Operations processes all activities related to the settlement of a trade when the Bank or one of its customers buys or sells a security. Core responsibilities include confirming the trade with the client, Bank or broker, managing delivery and receipt of the security and cash, as well as the recording of the transaction on the firm's books and records. Cash Securities Operations processes all activities related to the settlement of a trade when the Bank or one of its customers buys or sells a security. Core responsibilities include confirming the trade with the client, Bank or broker, managing delivery and receipt of the security and cash, as well as the recording of the transaction on the firm's books and records.

Have you tried contacting the Stratosphere hotel? I sold mine for $5. I had 500 shares.

Forwards Contract:

A forward contract is the simplest of the Derivative products. It is a mutual agreement between two parties, in which the buyer agrees to buy a quantity of an asset at a specific price from the seller at a future date. The Price of the contract does not change before delivery. These type of contracts are binding, which means both the buyer and seller must stay committed to the contract. This means they are bound to deliver or take delivery of the product on which the forward contract was agreed upon. Forwards contracts are very useful in hedging

Futures Contract:

A futures contract is an agreement to buy or sell an asset at a certain time in the future at a specific price. The Contractual terms of the futures contracts are very clear. The Futures market was designed to solve the shortcomings in the forwards contracts. Unlike forwards, futures are traded in organized exchanges. They also use a clearing house that provides the necessary protection to both the buyer and the seller. The price of the futures contract can change prior to delivery. Hence, both participants must settle daily price changes as per the contract values.

Difference:

Futures are traded in Organized Exchanges while Forwards are Over-The-Counter (OTC) traded

It's the day the stock actually made it into your account. If it was the day you sold the put, these things would be a nightmare to calculate basis on.