Market Makers in Options Trading: What Do They Do?
Let’s imagine you’re at an auction. You’re eager to buy, but what if no one’s selling what you want? Alternatively, what if you’re selling but no one’s buying? It’s the same with trading. For the…
Let’s imagine you’re at an auction. You’re eager to buy, but what if no one’s selling what you want? Alternatively, what if you’re selling but no one’s buying? It’s the same with trading. For the…
Option Buying Power is the total amount of capital an investor has available to purchase options contracts in their brokerage account. Understanding Option Buying Power As we already mentioned, option buying power is the total…
Expected move, in the simplest terms, is a way to measure the potential future volatility of a security’s price. It’s like a weather forecast for your stocks, predicting how much they could potentially move in…
Pairs trading, often called statistical arbitrage, is a unique trading strategy that involves buying (going long) and selling (going short) two highly correlated stocks simultaneously. This strategy is market-neutral, which means it’s designed to profit…
An American option is a type of option that grants the holder the right to exercise at any time before expiration. This is the key difference from European options which can only be exercised at…