Option is a derivative contract that gives its holder the right to buy or sell the underlying asset at an agreed price and agreed time. We have two different styles of exercising options: American style and European style.Both styles specify when the option contract can be exercised by the buyer and have nothing to do with a geographic region.Options are either calls or … [Read more...] about European vs. American Options: What is the difference?
What is Protective Put and how does this strategy work?
In hedging, we have a number of strategies to limit the risk of losing profit and to minimize losses. In this article, we have discussed what is a protective put strategy and how they work in the option market.Protective put is a hedging strategy which uses put option contracts to reduce the potential risk of owning a stock. Protective put is used by those traders and … [Read more...] about What is Protective Put and how does this strategy work?
Call Option vs. Put Option: What is the difference?
Futures and options are two derivatives that traders can buy and sell on a stock exchange. Option is a contract that allows the buyer or holder to have the right, but not the obligation to buy or sell an asset for a predetermined price at a specific date.We have two primary types of options: call options and put options.Both call and put options are traded in stock … [Read more...] about Call Option vs. Put Option: What is the difference?
What is Hedging and how does it work?
Trading and investing in the financial market involves the risk of loss. But risk can be managed by using hedging techniques based on the type of asset and market conditions.Hedging is a risk management strategy in which you protect your future profit or limit losses of one asset by purchasing or selling another. Most market participants trading in options are using hedging … [Read more...] about What is Hedging and how does it work?
Domestic Institutional investors (DIIs): Who are they and what do they do?
Domestic institutional investors, also known as DII, are those entities who make investments in the Indian stock market on behalf of businesses registered in India such as banks, insurance companies, mutual funds and large portfolio managers.In simple terms, domestic institutional investors (DII) are those entities who are registered in the same nation as the … [Read more...] about Domestic Institutional investors (DIIs): Who are they and what do they do?