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Similarities Between Options and Futures

An option is a derivative contract granting its owner (holder) the right, but not the obligation to buy (for a call option) or…

Difference Between Warrants and Exchange-Traded Options

A warrant is a security, issued by a company (such as a financial institution), giving the holder the right to...

Breakeven on Long Straddle

A long straddle is a straddle whereby two options (a call and a put) are simultaneously purchased on the same...

Difference Between Deferred Capped Call and Non-Deferred Capped Call

A deferred capped call is a capped call whose payoff is not received instantaneously by the option holder, but rather...

Warrants Versus Exchange-Traded Options

A warrant is a security, issued by a company (such as a financial institution), giving the holder the right to...

Writing Naked Put Options: an Example

Writing naked options (selling naked options) is usually subject to initial margin requirements. The initial margin that is required by...

First Generation Exotics: Examples

First generation exotics are a breed of exotics that has developed as simple or standard additions/ features to derivatives (as...

Applications of One-Touch Options

A one-touch option is a type of exotic option (and a barrier option) in which the holder receives a payout once...

Uses of One-Touch Options

A one-touch option is a type of exotic option (and a barrier option) in which the holder receives a payout once...

Short Call Synthetic Straddle: Construction and Risk/ Return Profile

A short call synthetic straddle is a neutral option strategy (in essence, it is a short straddle strategy) that is...