Contracts such as options and futures whose price is derived from the price of the underlying financial asset.
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Macaulay Duration 1. A measure of the sensitivity of a financial instrument’s value to a change in its yield. Macaulay Duration is an overestimate, and Modified Duration (q.v.) is a more precise measure. 2. The […]
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Tailed calendar spread A calendar spread trade involving one long position and one short position of different sizes (in contracts). Tandem spread A spread consisting of calendar spreads in two commodities. Tanker Freight Swap A […]
Options: Pros and Cons
Options: Pros and Cons Pros: Flexibility Limited risk Buying options limits your exposure. The maximum you can lose is the value of the option, the price you paid for it. Purchasing options as a speculative […]
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