LESSON 30. PROFILE OF PROFIT / LOSS FOR SOLD OPTION CALL
When selling a Call option, our maximum profit is limited by the option premium., and our risk is not limited in the event of an increase in the price of the underlying asset<
Forex
Forex (from English Foreign Exchange) - international currency market, on which the exchange and trade of various currencies is carried out. This market is the largest and most liquid financial market in the world..
Forex operates around the clock and works with virtually no restrictions on time and geography. Forex trading is carried out using special platforms, which allow traders to buy or sell currency pairs in order to profit from changes in exchange rates.
Banks are the main participants in Forex, financial institutions, investment funds, corporations and individual traders. Forex trading is based on spot transactions, which means immediate execution of trades at current market prices.
The main strategy in the Forex market is speculative trading, which is based on forecasting changes in exchange rates. Traders and investors analyze various factors, such as political events, economic indicators, geopolitical factors and others, to make decisions about buying or selling currencies.
Forex offers a wide variety of currency pairs to trade, including major (for example, EUR/USD, USD/JPY), cross courses and exotic couples. Traders can use various tools and strategies, such as technical analysis, fundamental analysis, news trading and more, for decision making and risk management.
It is important to note, that Forex trading involves a high level of risk, and requires a good understanding and knowledge of the market, and risk management. Therefore, learning and developing trading skills are key aspects of successful Forex trading..
LESSON 29. COVERED AND UNCOVERED SALE OF OPTIONS
Covered and uncovered sale Any option sale can be: 1. Covered - we have sold the option and have a long position in the underlying asset if we sell Call or short position in the underlying asset if we sell Put. The position in the underlying asset covers your risks on the sold option.
LESSON 27. PURCHASE OF OPTIONS. ENTRY INTO A POSITION AND ITS CREATION. PART 2
Time to expiration When buying a longer-term option, we have less risk, but this position will be less profitable if the market moves in our direction. The fact, that the reduction in the cost of an option under the influence of time is maximized as the expiration date approaches. Ie.
LESSON 25. RISKS OF PURCHASING OPTIONS
Risks of buying options (Long Call и Long Put) In one of the past lessons, we briefly touched on, so-called, three-dimensionality of option trading. Three factors affect the option position: BA price dynamics, time to expiration and volatility.
LESSON 22. PROFILE OF PROFIT / LOSS FOR PURCHASED CALL OPTION
Risk / reward ratio As we already know, option buyers' risk is limited by the premium, but there is no potential profit. When buying a Call option, our profit is not limited in the event of an increase in the price of the underlying asset (futures)
LESSON 20. NONLINEARITY OF OPTION
The first important difference between options is the non-linear nature of the instrument.. Most newbies, usually, come to the options market from the world of line instruments (stocks or futures). On these instruments, the size of the profit is equal to the size of the loss with the same increase or decrease in the price..
LESSON 17. EXIT FROM POSITION IN OPTIONS (CLOSING CURRENT POSITION)
For the option buyer (has the right to): Close with a reverse trade in the order book (same term and strike) Expiry Option (when, if it is profitable to perform it) Example: Long Call 65 000 and Si (on futures on the US dollar rate – Russian ruble) (1 200 rub.); BA cost = 65 000 rub. Let's admit, across 2 weeks, BA increased up to 80 000 rub.
News trading
Trading on the news is difficult to attribute to any type of trading.. This is not a technical trading method. – most indicators simply “break” at the time of price surges, with which news releases abound (from English. ease” – release), various candlestick patterns and patterns also do not shine with accuracy, because. depending on the bank's decision, or the report of the state. quotation services may fly away to 50-100, and in some cases more, points, in a few seconds! Maybe, everyone who wants to make money on Forex at least once asked himself: “The couple walked in a minute more, than the previous week. There must be some way to make money from this?!”. We hasten to please you – there are several ways! Truth, not all of them are simple, absolutely everything needs attention (one wrong mouse movement, and you will become the owner of a bonus of two or three hundred gray hair) and the most important thing – on the news, most of all, an ordinary trader has to compete not only with other traders, but also with investment banks, hedge funds and other financial institutions, whose capabilities, to put it mildly, exceed the possibilities 99% Traders!
High inflation. What to do?
Hello! Wednesday is a time to talk about finance and investment., so there are posts on Wednesdays @long_term_investments.
The sad story of LTCM or why risk management is not like hard science?
IN 1996 And 1997 years hedge fund, operated by Long-Term Capital Management (LTCM) has had an outstanding record of success and has earned an unrivaled track record in financial risk management. However, in August 1998 years, Russia's default on its debts began a chain of unheard-of market movements, which became terrible for LTCM. Some people say, that the moral of this story is, that risk management in the fund was insufficient, although partners (participants) Foundations were experts in the field on Wall Street and had weight in academia.. In this article, the author offers a different interpretation of those events..