What Is Market Risk? Market risk or systematic risk refers to the uncertainty associated with any investment decision due to the factors that affect an entire market. Market risk is the possibility of investment losses due to factors that affect the overall performance of the entire financial markets. It is […]
Trading Basics
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What Is a Long Put? A long put option refers to an options trading strategy. Typically, the trader anticipates a decline in the underlying asset. A trader could buy a put for speculative reasons. He is betting that the underlying asset will fall which increases the value of the long […]
What is a Credit Spread? A credit spread is a difference in yield between two bonds with the same maturity. Typically, a U.S. Treasury bond and another debt security of the same maturity but different credit quality. Credit spreads between U.S. Treasuries and other bond issuances are measured in basis […]
What Is a Short Call? A short call is an options trading strategy where the trader is betting that the price of the asset on which they are placing the option is going to drop. Short call strategy involves a call option. This obligates the call seller to sell a […]
What Is an Odd Lot? An odd lot is an order amount for a security that is less than the normal unit of trading for that particular asset – typically 100 shares. Therefore, they are considered to be anything less than the standard 100 shares for stocks. Trading commissions are […]
What Does Buy to Cover Mean? Buy to cover refers to a buy order made on a stock or other listed security to close out an existing short position. A short sale involves selling shares of a company that an investor does not own. The shares are borrowed from a broker but need to […]