N-T Archives - PersonalFinanceLab

What Is A Short Stock?

Kevin Smith — Sun, 04 Mar 2018 22:26:12 +0000

A short stock is an expression used when you sold shares of a company that you did not own beforehand, and is described in more detail in this post!

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Strangle Spread

Bavan Arumugam — Wed, 27 Dec 2017 17:40:13 +0000

A Strangle is a volatility bet where you simultaneously long a put at Strike Price 2 and long a put at Strike Price 1, betting the stock price will make a big movement in either direction. This is similar to a Straddle, but the trader shorts the stocks instead of buying them (but the profit is basically the same)

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Straddle

Bavan Arumugam — Wed, 27 Dec 2017 17:32:52 +0000

Straddles an option strategy that profits with volatility. You simultaneously buy long a call at Strike Price 1 and long a put at Strike Price 1. This creates a triangular shaped payoff and profit graph where the reward is based on the volatility of the stock - you'll make a profit if the stock's price makes a BIG move in either direction, but take a loss if it doesn't move much.

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Ratio Strategy

Bavan Arumugam — Wed, 27 Dec 2017 17:23:39 +0000

A ratio strategy is an option strategy that is created by having X amount of call options at Strike Price 1 and shorting Y amount of call options at Strike Price 2. This strategy is used when the investor thinks the price won't move much, but they want to get a bigger profit based on a slight movement up or down.

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Short Call

Bavan Arumugam — Wed, 27 Dec 2017 16:17:52 +0000

A short call is a term used when you sell a call option for an underlying asset. If you use this type of option, you're selling someone else the right to buy a stock from you at a certain price in the future. If the stock's price goes down, you keep the money you made by selling the option. If the stock's price goes up, you are required to sell the stock at the agreed upon price, taking a loss.

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What Is A Short Put?

Bavan Arumugam — Thu, 31 Aug 2017 16:05:14 +0000

A short put, the opposite of a short call, is the term used when you sell a put option for an underlying asset. You make a flat profit if the stock's price goes up, but lose money if the price goes down

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What Is A Long Put?

Bavan Arumugam — Thu, 31 Aug 2017 16:04:34 +0000

A "Long Put" means buying the right to sell a stock at a certain price at a certain date in the future. You would buy a "Long Put" if you expected the stock's price to go down.

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What Is A Short Stock?

Bavan Arumugam — Thu, 31 Aug 2017 15:12:28 +0000

You "Short a stock" by borrowing a stock from your broker, then immediately selling it. Later, you buy the stock back on the market, and return it to your broker. You make a profit if the stock's price dropped between when you sold it and when you bought it back.

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What Is A Long Stock?

Bavan Arumugam — Thu, 31 Aug 2017 15:08:41 +0000

A long stock is an expression used when you own shares of a company. It represents a claim on the company’s assets and earnings.

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What is Solvency?

Jon Billings — Tue, 08 Aug 2017 18:56:31 +0000

Solvency is the possession of assets in excess of liabilities, or more simply put, the ability for one to pay their debts. People and organizations who are not "Solvent" face bankruptcy

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