Glossary

Glossary

 

• Asset: Any resource with value that is capable of being owned or controlled by an individual, corporation, or country and is expected to provide future benefits.

• In the Money: A term describing a successful investment. This term can either mean that the option expired at a higher rate than the rate when purchased (if you chose the Call option) or that the option expired at a lower rate than the purchased rate (if you chose a Put option).

• Out of the Money: A term that means the investment was unsuccessful and the expiration rate was lower than the purchase rate (if you chose a Call option) or the expiration rate was higher than the purchase rate (if you chose a Put option).

• Expiry Rate: The price of the underlying asset at the time the option expires. This price determines whether the option is in the money, out of the money or at the money.

• Execution Rate: The entry rate at the time the investor makes a trade.

• Put Option: An option where the trader believes that the rate of an asset will be lower than the purchased rate at the time of expiration.

• Call Option: An option where the trader believes that the rate of an asset will be higher than the purchased rate at the time of expiration.

• Ask: Price at which the trader can buy an asset in the markets. The ask price is part of the formula used to calculate the expiry level of an asset.

• Market Price: The price, theoretically determined by the forces of supply and demand, at which an asset can be bought or sold

• Return: This term refers to the total amount you would receive on your investment if your trade ends in the money.

• Underlying Asset: This is the index, commodity, stock or currency that you choose to trade.

• At the Money: This term is used when a trade expires with the same rate at which it was purchased.

• Indices: Selected stock portfolios that represent a sector of the overall stock market

• Stocks: Types of securities that represent ownership in a corporation, being a claim on a portion of said corporation’s earnings and assets

• Commodities: This term refers to raw materials from a variety of sectors such as energy, metals and food.