A cash-and-carry trade is an options trading strategy in which the trader buys an asset and simultaneously sells a futures contract for the same asset, with the goal of profiting from the difference between the two prices. The cash-and-carry trade is also known as a “buy-write” or “write-plus” trade. What are the 3 most popular … Read more
A derivative is a financial instrument whose value is derived from the underlying asset. The expiration date is the date on which the derivative contract expires. The expiration date is also the date on which the last trading day for the derivative contract is. What happens if options expire out of the money? If an … Read more
In international business, leads and lags refer to the time difference between when a company initiates a transaction and when that transaction is finally completed. This time difference can be due to a number of factors, including differences in time zones, the need to coordinate with multiple parties located in different countries, and the time … Read more
The Federal Agricultural Mortgage Corporation (FAMC) is a government-sponsored enterprise (GSE) created in 1988 to provide a reliable source of financing for agricultural producers and rural homeowners. The organization is also known as the Farm Credit System Insurance Corporation (FCSIC). FAMC is headquartered in Washington, D.C. The corporation’s mission is to “enhance the availability of … Read more
A currency certificate is a physical certificate that proves that the holder owns a certain amount of a foreign currency. Currency certificates are typically issued by banks or other financial institutions, and can be used as a way to store foreign currency or to make international payments. What time currency options expire? The expiration date … Read more
The International Monetary Market (IMM) is a division of the Chicago Mercantile Exchange (CME) that trades international currencies. The IMM was created in 1972 to provide a venue for trading currencies, and today is the largest market for currency trading in the world. The IMM trades two types of contracts: futures and options. Futures contracts … Read more
The Black-Scholes Model is a model of stock price movement that assumes that stock prices move in a random walk. This model is used to price options and other derivatives. What is the best options pricing model? There is no definitive answer to this question as there are a number of different options pricing models … Read more
The binomial option pricing model is a way to calculate the fair value of an option using an iterative process. The model was first proposed by American economists Fischer Black and Myron Scholes in 1973. The model works by calculating the expected value of the option at each step in a tree diagram. The tree … Read more
An European option is a type of derivative that gives the holder the right to buy or sell an underlying asset at a specified price on or before a specified date. European options can only be exercised on the expiration date. The underlying asset can be a stock, commodity, currency, index, or interest rate. European … Read more
. What Is a Cross-Currency Swap? A cross-currency swap is a type of financial derivative that allows two parties to exchange currency-denominated payments. This swap can be used to hedge against currency risk or to speculate on currency movements. What are the three different styles of options? There are three distinct styles of options: American, … Read more
