Futures and options market meaning


Even the best at online stock trading admit that learning all the ins futures and options market meaning outs of the futures and options market meaning makes for a daunting task. Entry into the field involves mastery over its often opaque jargon and complex concepts.

At Lightspeed Trading, we strive to design trading tools that assist everyone from the most experienced traders to those just looking to get started.

Part of that endeavor involves education. To that end, we have provided a short glossary of some basic stock market terminology to futures and options market meaning beginning traders on their way. Those with more experience can always stand to review their knowledge, as well. These assets represent investments. Subsequently, they allow companies, commercial enterprises, and municipalities to raise new capital.

These securities denote ownership in a corporation. Generally, stocks consist of two different types:. On the stock market, ETFs trade like stocks but more closely resemble mutual funds. They hold stocks, commodities, and other assets while remaining tradeable themselves. Because they reflect an index, their prices change throughout the day. In contrast, mutual funds have their net-asset values NAV calculated at the end of the business day.

ETFs combine the flexibility of stocks with the diversification inherent in mutual funds. That, in addition to their tax efficiency and low costs, make ETFs an appealing choice for many traders. These highly versatile securities represent sellable contracts. Due to their high liquidity, options usually carry more leverage than stocks but require less capital, giving traders with less buying power more choices when diversifying their portfolios.

Futures, like options, consist of sellable contracts. However, unlike options, futures require the holder to fulfill the terms of the contract at the time of expiration.

In practice, traders can still buy or sell futures in much the same way as options. Lightspeed Trader, our trading system for day tradersallows our clients to trade and maintain stocks, ETFs, and options all futures and options market meaning the same place. To learn more about the products and services we offer, call us at 1. Navigating Taxes as an Active Trader.

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How are Stock Futures different from Stock Options? In stock options, the option buyer has the right and not the obligation, to buy or sell the futures and options market meaning share. Risk-return profile is symmetric in case of single stock futures whereas in case of stock options payoff is asymmetric. Also, the price of stock futures is affected mainly by the prices of futures and options market meaning underlying stock whereas in case of stock options, volatility of the underlying stock affect the price along with the prices of the underlying stock.

What are Stock Futures? How are Stock Futures priced? What are the opportunities offered by Stock Futures? How are Stock Futures settled? Can I square up my position? When am I required to pay initial margin to my broker?

Do I have to pay mark-to-market margin? What are the profits and losses in case of a Stock Futures position?

What is the futures and options market meaning lot for Stock Futures? Why are the market lots different for different stocks? What are the different contract months available for trading? What is spread trading on BSE? As an investor, how do I start trading in Stock Futures?

What securities can I submit to the broker as collateral? How does an investor, who has the underlying stock, use Stock Futures when he anticipates a short-term fall in stock price? How can an investor benefit from a predicted rise or predicted fall in the price of a stock? What is pair trading?