Options & Trading
Not what you're looking for?
Explain how options can be used to construct portfolios & unique trading strategies. 250 or more words.
Purchase this Solution
Solution Summary
Options and trading is examined.
Solution Preview
There are two main reasons why people buy/sell options. One is to manage risk (called hedge), and the other is to increase their profit (called leverage). There are many trading techniques, but almost all of them are either hedging strategies or leveraging strategies.
Let's talk about hedging first. Here, we will always assume that the underlying is a stock, but you should know that options with other underlyings (such as currency, ETFs, or even other options) work analogously.
Hedging is usually used by conservative investor. These people usually have big portfolios and are usually looking for ways to secure their positions. For example, certain investments (such as a Guaranteed Investment Certificate) promises a minimum level of return, ...
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.