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Stock Options and Futures

Options are the right to buy or sell a security at a set price over a specified period of time. Futures are contracts to buy or sell assets at a set price on a predetermined future date.

827 Questions

What is the principal-agent problem?

In politics, the principle is the citizen, who poses the right to make certain decisions. The agent is members of Congress. The problem is when the principle and agent have different goals, causing conflict to arise. One might feel their Congressman is "out of touch" or not getting things done.

What are D1 and D2 in Black-Schole model?

d1 is ln(SpotPrice/StrikePrice)+((RiskFreeRate + (0.5*(sigma^2)))*TimeToMaturity)

d2 is SpotPrice-sigma*TimeToMaturity^0.5

These equations are taken from the spreadsheet found in the related link

Where can you buy JDM option magazine in Malaysia?

Try contacting J.D.M Option at this Email address jdm-info-en@deesclub.co.jp They should be able to tell you. Website: http://www.jdm-option.com/eng/ Hope This Helps.

Are chicken futures contracts available?

No. CME Group has introduced "broiler chicken" futures in the past and has always failed, because the chicken industry is extremely integrated--farmers grow under contract to processors.

What options do you have when you have suffered an injustice?

It depends. We all have or will suffer injustices at some point in our lives. When it's a friend or a loved one many times there is nothing that we can do but learn from it and move forward. Sometimes when you have suffered an injustice you can take it to court if it involves some kind of wrong against you such as assault, theft, breach of contract, etc.

What determines the price an investor will have to pay for an option?

For listed options there is a quote with an ask price and you can buy the option for that price. If the question is how is that price determined that is much more complicated. Professional options traders use a mathematical formula, usually the Black-Scholes formula, to determine the value of an option. There are several inputs to the Black-Scholes which are days to expiration, strike price, volatility, and risk free interest rate. These professionals offer you the option at a certain ask price or will buy the option at a certain bid price. They make a living from the difference between the bid and the ask price and by using certain hedging techniques. So let's say you wanted to buy an option to buy 100 shares of xyz company for the next 6 months at a price of $100 and xyz is currently selling for $97. We know how many days to expiration, about 182, we know the strike price, $100, and we know the risk free interest rate, about 4%. What we don't know is the volatility. The historical volatility can be calculated and used to calculate the options value. However, for various reasons the option pros may feel the volatility the next 6 months will be different than the historical volatility and set the option price accordingly. This is called the implied volatility. Suppose the option price is $5 bid and $5.40 ask. You could bid $5.20 and maybe someone would sell you that option for $5.20. Remember options represent the right to buy 100 shares so you would pay $5.20 X 100 = $520 plus commissions of about $15 for a total of $535 for 1 option and the stock would have to be $105.35 or more in 6 months for this to successful. Dividends during the period also affect option prices but for simplicity I have assumed there are no dividends.

What does Keeping all your options open mean?

It means when your playing a game and at the menu screen you see OPTIONS. You select it and just keep it there forever. It's open to everyone.

Why do most conservation plans include habitat preservation strategies?

Habitat preservation is crucial for conserving biodiversity because it ensures that species have a place to live, breed, and find food. By protecting habitats, conservation plans can help maintain healthy ecosystems and prevent species from becoming endangered or extinct. Preserving habitats also helps mitigate the impacts of habitat destruction, climate change, and other threats to wildlife.

What is the difference between an Implicit Contract and an Psychological Contract?

An implicit contract refers to an unspoken agreement between parties that outlines expectations and obligations, typically based on mutual understanding rather than formal documentation. In contrast, a psychological contract encompasses the beliefs and perceptions each party has about their mutual obligations and expectations, often influenced by trust and emotional factors. While both involve expectations, implicit contracts focus more on specific behaviors or actions, whereas psychological contracts involve broader, often subjective interpretations of the relationship.

Examples of primary stakeholders?

Primary stakeholders are the people who take part in economic transactions with the business. More often than not, they are internal stakeholders. Some examples are suppliers, stockholders, customers, creditors, and employees.

Explain the feature and functioning of OTCEI?

features of OTCEI

1. nationwide trading

2. ringless trading

3. compulsory investor registration

4. transparent trading

5. transfer by counter-receipt

6. only authorised dealers

What are index stock options?

An option based on the value of a stock index (like the S&P 500). It's not different than a typical stock option; the only difference is the underlying asset that determines the value of the option (an index price instead of a stock price).

Stock market indices play an important role in gauging the economic health and progress of a country. Oftentimes someone will say "the stock market is up" or "down" but that is not necessarily a meaningful statement. Understanding how stock market indices are calculated and their history can be very instrumental in understanding the stock market as a whole.

The Origin Of The Stock Market Index

As stock markets became more and more prevalent in industrialized countries, people began to look for a "barometer" of the stock market as a whole. The very first stock market index was the Dow Jones Transportation Average, which was created by Charles Dow in 1884. It was followed shortly thereafter by many more indexes like the Dow Jones Industrial Average which, in a very modified form, is still widely publicized and followed today.

How Indices Are Calculated

A stock market index is generally calculated by combining a weighted average of a set of particular stocks. For example, in the case of the Dow Jones Industrial Average, 30 stocks are weighted by price to get a measurement of the market as a whole. It should be noted that all indices are somewhat arbitrary and are more useful as indicators of relative and historical growth rather than a raw number. Additionally, in many indices stocks often times are added or removed due to bankruptcies or simply becoming less relevant than another stock. Most recently Kraft Foods replace AIG in the Dow Jones Industrial Average.

Popular Stock Indices

If you open a Scottrade account and then move overseas does Scottrade close your account?

Scottrade requires that you have a permanent address in the US. If they were to find out that you were no longer living in the US they would indeed close the account.

How do stock splits affect stock options?

The contract is made whole so that you are neither negitively or positively affected. You can figure out the new strike price by multiplying the stated value by the split ratio:

100 shares becomes

$70 at 2 for 1 = 200 shares at $35 each

$150 at 3 for 2 = 150 shares at $50 each

The OCC can will calculate it for you when you decide to take the option.

What is the difference between a call option and a put option?

A call option gives the option buyer the right, but not the obligation, to buy a certain amount of stock on or before a certain date for a certain price. A put option gives its buyer the right, but not the obligation, to sell stock on or before a certain date for a certain price. How the options are exercised is another difference. If you bought a put, you're hoping the stock price falls below the strike price--the certain price in the contract. It would make no sense to sell stock for $10 a share if it's $15 now, right? Calls exercise when their stock price goes above the strike price.

What is the ticker symbol for CB Richard Ellis Group?

The ticker symbol for CB Richard Ellis Group is CBG and it is traded on the New York Stock Exchange.

How do you research old stock certificates?

Here are a number of suggestions from various WikiAnswer contributors:

To do this in the most inexpensive manner, you should first check and see if this stock certificate has been cancelled. Normally the stock will have a cancellation or redeemed date and/or company/representative firm/bank cancellation stamp. Often this is also done by chipping the certificate and putting small holes in the paper to spell redeemed or cancelled or some other related word. Then, you should find someone who buys and sells collectible stock certificates and see if they have ever sold these OR ask how much they will sell one to you PRIOR to telling them you have one.

You can also research the company name on the certificate through the New York Stock Exchange information service or the NASDAQ service.

Open a brokerage account and deposit the certificates. The brokers will run the CUSIP and figure out if they belong to a renamed/merged company, whether they have split or conglomerated, and if they're still traded.

You can contact the state that your certificate was incorporated in, each state has a department that handles such things. This site has each state's department contact information listed. See Sources and Related Links, further down this page, for more information about that.

Databases/directories of corporate changes can also be useful in determining the value of your shares. Reasonably priced databases and those available to the public that is. See Sources and Related Links for more information.

Most local business libraries could help you out. The next step is then to contact either the transfer agent (found on the stock certificate) just google the name and you should have a number to call. They will have all information as to what happened to the company, if anything was left for investors etc.. if by any chance the companies transfer agent has also gone by the wind.

You might want to go for professional help. A broker or other financial advisor can help.

Alternatively, you can go with an online research firm to evaluate the position. It might be impossible even if you were to spend countless hours of effort to get near the sum of information provided by professional help, such as pinpoint financial information, stellar histories and values. There are also excellent old stock research services like OldCompany.com and Scripophily.com that can tell you what happened to the company for a small fee. They can also tell you if the certificate has any collectible value. See Scripophily.net for listing of over 18,000 certificates.

Be careful with some old stock research services that are not members of the Better Business Bureau, have little business experience and claim to be experts in collectible stock and bond certificates. Many of these so called experts have little experience in determining whether your old company stock has real value as a collectible or redeemable security. Always check to see what the Better Business Bureau says about them.

See Sources and Related Links for more information.

What is stock options backdating?

Stock options give employees the option to buy stock at a predetermined price. Usually, when a company grants stock options, the predetermined price refers to a future price, and the future price is usually higher than the current price. For example, if your stock is trading at around $20/share, you might get 1000 options with a strike price of $22/share. No one would exercise their options (or buy this stock) right away, because why would you want to pay $22 for the stock when you can get it for $20? But, if the stock goes up to $30, then you get a good deal when you exercise your options: you get to buy those same shares at a discount, for $22/share. In the stock options backdating scandal, companies looked at their stocks' historical prices, found the low point, and granted options based on that date. Since the stock had gone up since then (i.e., the stock is no longer at the low point), this backdating automatically guaranteed these employees made money. In other words, say that the company stock is trading around $20 today and has been at that level for a while, but a year ago it dropped--just for a day--to $15 before rising back to $20 the next day. If your company illegally backdated stock options, it would grant options today for $15, but backdate them to make it look like the options were granted before the temporary drop. That way, employees could take advantage of the stocks' gain from $15 to $20. This backdating, while profitable, is illegal because options aren't meant to be a guarantee of profits but an incentive to work hard to improve the company and, hence, its stock price. Backdating is cheating, making it look like stock options were granted in the past by changing the date.

What is futures trading?

Futures trading is the buying and selling of contracts which require you to buy or sell an item on a certain date for a certain price. Most (very close to all) futures contracts are written against commodities rather than stock.

What banks participate in the medallion signature guarantee program in Madrid?

((Short Story: After talking to my financial institution, they said that an embassy seal would work as a substitute for the Medallian Signature seal. So, I wrote a concise description and purpose of the "substitute" Signature Sheet and went back to the USEmbassy-Madrid and got the Embassy embossed seal. ))

- - - Long Story: I can't give you an answer as to which banks provide the Medallion SigGuarantee, but I can tell you my experience here in MADRID, SPAIN. My local bank (Bankia/Caja Madrid) wouldn't sign it even though they have my signature on record and investment through them, because they wouldn't sign an English-language document that they didn't understand - which is fair and understandable. The Madrid, Spain branch office of Wells Fargo (USA) wouldn't sign it because it deals only with commercial clients - I'm an individual - and I wrote to Wells Fargo customer service, again USA, and they said they would only provide the Medallion within the USA. Wells Fargo has my signature on file, but that didn't seem to matter to them, here. The embassy doesn't provide Medallion service. I didn't even want to futz with CITIBank which is of course a SEC-registered institution. So, I called my financial institution, explained my situation and they responded, after checking with the higher-ups tha an Embassy Seal would be okay... An email said that local laws apply to Americans living abroad and to follow their laws... Well, that gets into the language problem, again. So, going back through the "Embassy route", I called up the notary there (she had already seen me once before when she said NO, and explained that the financial institution would accept the stamp. She said okay, but I would have to provide a document. So... I wrote up a formal, legalese-type document with the purpose of it being "in lieu of" the Medallion sig.guarantee (on page 5) and I also included the general nature of the entire document (inheritance) so as to specifically link my written document with the form from my financial institution...and of course, I gave my full name, SSN, address, and Passport Number. I did NOT say or imply that the Embassy GUARANTEES that my signature is mine, however, only that effectively that they have witnessed me sign a document whose signature is similar to the one in my passport (I forget the wording, but I can tell you if you contact me. That should work, and as the Embassy lady there said, "Now it's up to them to accept it, or reject it", which is true... I'll come back and let the readers of this history know how it all turns out. Should take about two months, about early June2013. (Pardon the length and cohesiveness of this story, please...) FET:4/4/13

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Update: August, 2013 - - Yes! It worked. Wells Fargo accepted the Embassy Seal (which cost around 50 Euros) and thus I avoided having to get the Medallion Signature Guarantee. I recommend to others in Madrid to do the same thing, although I can't answer whether this will solve YOUR particular situation. I can get the exact wording of the document they (both the Embassy and Wells Fargo) did accept. Contact me if you need to through this forum, or write to me at " plenum222@yahoo.com ". Bye!! FET:28/8/13

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When does insider trading occur?

Let us say you are the managing director of ABC Bank Ltd which is a stock market listed company. After weeks of negotiation you know that ICICI bank the country's leading bank has accepted to buy your company and issues shares of its own company to investors who hold shares of your company. As any intelligent investor would know, shares of an ICICI Bank are much more valuable than shares of an ABC Bank. Once this news of ICICI acquiring ABC Bank goes public people will start accumulating shares of ABC Bank so that they can benefit out of the acquisition. This will send the price of ABC Bank skyrocketing. So, knowing this information, if you buy shares of ABC Bank for your personal share trading account before this news goes public, you can sell them off once the acquisition is complete and the share price has exploded. This way you gain an undue advantage and make a profit at the expense of the company.

This is insider trading.

Is there a place to screen for stock options that are bought at the ask price?

All stock options are bought at the ask price. There is no such thing as buying at bid price unless you are a market maker bidding for options in the open market.

Do you have to exercise incentive stock options if market price is lower than granted price?

No, and you shouldn't.

If the strike price of your option is $10 per share, and the stock is currently trading at $9, exercising it would get you nine-dollar stock for $10 per share. This is what we options fans call a very bad thing.

How do you trade in sgx nifty from India?

Find an international Broker and open internatioanl account and you can trade SGX nifty. For more help contact. rmoney.global@gmail.com