Commodity Futures Trading Commission (CFTC)
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regulates futures markets (can set price limits)
What is the break even point for the buyer and seller of a call option?
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the strike price plus the premium
Cash Delivery vs Actual Delivery
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cash delivery means that the cash value of an asset is delivered in a futures
contract instead of the physical underlying asset
What is the Fama-French Model and what are the 3 factors?
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an asset pricing model based off the CAPM that accounts for the following
three factors:
1. Market Risk - same as CAPM
2. Size Factors - small cap vs big cap stocks
3. Value Factors - a value stock is a stock that is trading at a lower price
relative to its fundamentals (earnings, dividends, etc.) and is thus
considered undervalued
CAPM only accounts for market risk while Fama-French Model accounts for
size and value factors. This is because small-cap and value stocks typically
outperform the market on a daily basis
Price Earnings (P/E) Ratio
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firm's stock price divided by EPS
What is the maximum loss for the buyer of a call option?
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the premium
What is the sum of the profits between the buyer and the writer of a call option?
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zero
Maintenance Margin
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the minimum amount of equity that must be in a margin account. If money
drops below the margin, the account owner will get a "maintenance call"
stating that they must put in more money or lose their position in a security
European Option
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regulates futures markets (can set price limits)
What is the break even point for the buyer and seller of a call option?
,Give this one a try later!
the strike price plus the premium
Cash Delivery vs Actual Delivery
Give this one a try later!
cash delivery means that the cash value of an asset is delivered in a futures
contract instead of the physical underlying asset
What is the Fama-French Model and what are the 3 factors?
Give this one a try later!
an asset pricing model based off the CAPM that accounts for the following
three factors:
1. Market Risk - same as CAPM
2. Size Factors - small cap vs big cap stocks
3. Value Factors - a value stock is a stock that is trading at a lower price
relative to its fundamentals (earnings, dividends, etc.) and is thus
considered undervalued
CAPM only accounts for market risk while Fama-French Model accounts for
size and value factors. This is because small-cap and value stocks typically
outperform the market on a daily basis
Price Earnings (P/E) Ratio
, Give this one a try later!
firm's stock price divided by EPS
What is the maximum loss for the buyer of a call option?
Give this one a try later!
the premium
What is the sum of the profits between the buyer and the writer of a call option?
Give this one a try later!
zero
Maintenance Margin
Give this one a try later!
the minimum amount of equity that must be in a margin account. If money
drops below the margin, the account owner will get a "maintenance call"
stating that they must put in more money or lose their position in a security
European Option
