Black Scholes model is a price disparity formula used to determine European call options price. Also referred to as Black-Scholes-Merton model, it takes into account that investors have an alternative to investing in securities earning risk free interest rate. Basically, this formula is used to acknowledge that an option cost is a function of stock-price […]
If you are new to options trading, then you probably have a lot of questions. There are many different terms out there and many of them are difficult to understand. One of those terms is an assignment. If you have never heard of the term before and you want to trade options, it’s a good […]
Rho is an option Greek that refers to the rate of change which affects the price of a derivative in respect to interest rate changes. As a Greek measure, it is also used to determine the sensitivity of an option. Greeks are important measures of risk management. Not only do they allow money managers, traders […]
The triple bottom pattern a bullish reversal pattern used to predict the bottoming of stock that has been in a downtrend. The pattern can be found on bar charts, line charts and candlestick patterns with a distinct bounce off a support level three times. Looking at the pattern, it is correct to deduce that the […]
If you want to know as much as you can about options trading, it is important that you do your research prior to getting started because there is a lot of invaluable information online. A good place to start would be looking up the definitions of different terms that relate to these types of investment […]
A margin call occurs when the broker of a margin account demands additional money or securities be added to an account to bring the amount of equity in the account up to its designated maintenance margin. If the account holder fails to add enough cash or securities to the account to bring it up to […]
The triple top pattern can be described as a bearish reversal pattern used by trading experts and investors to predict a potential reversal from an uptrend. It is usually formed when an underlying asset is experiencing an uptrend but has hit a major resistance level that it test three times only to fail and come […]
A bull market is an informal, yet widely used, concept that describes the behavior of certain markets or market segments when participants seem particularly exuberant about the future prospect for prices. Bull markets are characterized by steadily rising prices, typically in stocks, the ignoring or downplaying of negative or adverse information and events, the undue […]
A Bear Market refers to a market where uncertainty and fear overcome positive sentiment which results in continuous selling in the markets over a prolonged period of time. There is no specific guideline to when we enter a bear market but general consensus is a 20% decline in prices across the broader market over a […]
While most of you know what a dividend is, many are unfamiliar with an important date known as the ex-dividend date. Those who have heard the term are often confused about the meaning. Today, we are going to learn what it means and how it can affect you as a trader. What Is an Ex-Dividend […]
