Online Stocks Trading Academy: Futures Stock Options Glossary

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Published on January 5, 2017

Author: vinodweboo0796

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Slide 1: Stock Academy www.MoneyMantraStock.com Online Courses & Training Slide 2: How T o Trade Options F or Profit This module is suitable for traders who want to take intraday or swing trades in options, by doing their own analysis. Following aspects would be covered in the training : Basics of Options revised Myths in Option trading How to price Options (Converting a view in to an option’s trade) Strategies work better Smart Option trader guidelines Slide 3: ….Note Note – A derivative trader trades in the derivatives segment. Derivatives are contracts between two or more parties, whose price is dependent upon or derived from one or more underlying assets. Its value is determined by fluctuations in the underlying asset. In India, the most common underlying assets include stocks and market indices. Most derivatives are characterized by high leverage. They are generally used as an instrument to hedge risk, but can also be used for speculative purposes. An option contract is nothing but a RIGHT to buy or sell an underlying asset at a pre-decided date and time. Slide 4: Futures Stock Options Glossary FUTURES TERMINOLOGY SPOT PRICE:  The price at which an asset trades in the spot market . FUTURES PRICE:  The price at which the futures contract trades in the futures market . EXPIRY DATE:  It is the date specified in the futures contract. This is the last day on which the contract will be traded, at the end of which it will cease to exist. CONTRACT SIZE:  The amount of asset that has to be delivered under one contract. For instance, the contract size on NSE’s futures market is 200’Nifties . Slide 5: Futures Stock Options Glossary BASIS:  In the context of financial futures, basis can be defined as the futures price minus the spot price. There will be a different basis for each deliver}’ month for each contract. In a normal market, basis will be positive. This reflects that futures prices normally exceeds spot prices . MAINTENANCE MARGIN:  This is somewhat lower than the initial margin. This is set to ensure that the balance in the margin account never becomes negative. If the balance in the margin account falls below the maintenance margin, the investor receives a margin call and is expected to top up the margin account to the initial margin level before trading commences on the next day . If You Want To More Info. About Stock Market & Online Training of Technical Analysis…….. Visit Our Website: www.Money MantraStock.com

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