in options trading, margin must be posted by______

Q: What is the Futures and Options Market? What are the features? Provide information about the Futures…

A: Futures contract is a legal contract which is standardized in nature. The contract is used by market…

Q: Critically explain with examples the concept of futures and the differences between options and…

A: Futures in a type of derivative product in which there is a contract that is agreed in between two…

Q: Discuss the main factors that influence the prices of securities on a stock exchane.

A: There are many factors that influence the prices of securities.

Q: Briefly explain the pay-off structure of futures and options contract. Also make it more clear with…

A: Futures are the derivative contract where you get the rights as well as the obligations. For example…

Q: The market that deals in futures and options is called O a Over-the-counter market Ob. Derivatives…

A: Financial markets are the markets that play the role of intermediaries between the buyers and…

Q: Discuss the payoff structures for call and put options and the determinants of call and put option…

A: Since you have asked multiple question, we will solve the first question for you. If you want to any…

Q: the following in a couple of sentences. d) Compare and c

A: Compare and contrast options with futures : The most significant distinction among options as well…

Q: What is the difference between forward and futures contracts, focusing on the pros and cons of each

A: In certain ways future and forward deals are similar: both include the buying and selling of assets…

Q: Market li

A: Bid price means the highest price the buyer is willing to pay and ask price is the lowest price the…

Q: Design a forward contract on a stock with a particular delivery price and delivery date as a…

A: To generate an offsetting forward position, a synthetic forward contract utilities call and put…

Q: From the perspective of determining profit and loss, the long futures position most closely…

A: A financial agreement for the purchase or sale of an asset at a fixed future time and price is known…

Q: A) Explain the relationship between strike prices and implied volatilities under a price jump…

A: Solution- (A) Implied Volaitlity of associate choices contract is that worth of the volatility of…

Q: What is the purpose of initial and maintenance margins? How does marking to market affect the amount…

A: Margins: Margins allow individuals who'd like to trade to borrow funds from brokers or brokerage…

Q: define and explain convenience yield, and describe how it is incorporated into the futures pricing…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Discuss the advantages and disadvantages of using options to hedge as compared to using futures…

A: Introduction: The future is the financial instrument of the derivative market in which a buyer and…

Q: Describe Option-Pricing Theory.

A: Option pricing theory is a technique used to calculate the fair value of an option by using…

Q: The greater the volatility of the underlying stock, the higher; lower lower; higher higher; higher…

A: The greater the volatility of the underlying stock, the higher the premiums for both call and put…

Q: Describe the five variables (Assets price, Strick price or Exercise Price, Risk- Free- Rate, Time to…

A: Five Variable of Black-Scholes Merton Formula   Assets Price Strike Price or Exercise Price Risk…

Q: discuss the put-call parity of options on futures, and use it to value put options on futures.…

A: Put-call parity is a principle that applies to options trading and states that the price of a call…

Q: Define coupon and market/effective interest rates as they determine bond pricing at par, premium, or…

A: Coupon: Coupon is the annual or semiannual payment will be made by the issuer of the bond to its…

Q: The market price paid for an option is best defined as: a. The strike price of the option b. The…

A: Options are of two types Call and put

Q: Explain the main differences between futures contracts and forward contracts.

A: Solution- Future Contract-        A derivative may be a legal agreement to shop for or sell a…

Q: Highlight the key difference between option, futures and forward contracts.

A: Option, futures and forwards are three examples of financial derivatives. Option gives traders the…

Q: Graphically illustrate equilibrium in the bond market.

A: Bond equilibrium refers to the state in which a bond's market price aligns with its fundamental…

Q: Define the terms, or give short explanations.         -futures contract/option -hedge -hedger…

A: A derivative is a financial contract whose value is derived from the underlying asset, which could…

Q: Describe Stock Option Plans.

A:

Q: The most popular type of derivative securities is options. Discuss what is an option? Define calls…

A: Option is a type of derivative instrument which gives a right, not the obligation to the holder to…

Q: Briefly explain the following 1. Spot market vs futures market

A: There are two market spot market and future markets.

Q: What is the relationship between option prices and time to expiration, volatility of the underlying…

A: Options are financial instruments  that gives the buyer the right,  to buy or sell the underlying…

Q: How does the put-call parity formula for a futures option differ from put-call parity for an option…

A: Put call parity is defined as the holding of the short European put as well as long European call of…

Q: Describe two conditions which will determine whether or not a stock is in equilibrium. Can either of…

A: Equilibrium refers to a state of rest or a situation where demand is equal to supply. At point of…

Q: The purpose of the hedger in futures trading is ()   A. Transfer price risk                  B.…

A: Hedging is a technique in which risks in underlying assets are managed or reduced by adopting…

Q: What is a normal market for futures? What does an inverted futures curve indicate?

A: The future refers to the legal agreement between the buyer and the seller to exchange underlying…

Q: What is a REIT What are the advantages and disadvantages of REITs List and Describe the different…

A: Real Estate Investment Trust (REIT) :A REIT is a company that owns, operates, or finances…

Q: Show graphically and explain the profits and losses of buying futures relative to buying call…

A: If an investor buys Future contract or Call Option Suppose the investor buys a call option at…

Q: What is the key difference between futures contracts and options?

A: Both futures contracts and options are derivative instruments. Their value depends on the value of…

Q: Explain what is meant by forward contracts and futures using examples. List the main advantages /…

A: An option offers the holder of it the right, and not the responsibility, to buy or to sell an asset…

Q: 1. (a) Describe the defining features of call and put options and explain intuitively using an…

A: Derivatives: Derivatives are a class of securities that derive their values based on another asset…

Q: Explain what is meant by “initial margin” on a futures contract

A: A futures contract is a type of common financial agreement that specifies a future date and price at…

Q: Explain the following terms, Option price and Strike price

A: Option price and strike price are essential terms which are used in derivative markets. These are…

Q: Define the terms, or give short explanations.             -naked short sale -notional amount…

A: A derivative is a financial contract whose value is derived from the underlying asset, which could…

Q: This is is the question related to the course "Financial Derivatives and Risk Management" Why are…

A: Option Pricing Models: There are two main models that are used to value options. They are: The…

Q: Describe a situation when an investor would want to use a market order.

A: Investors are required to place order with their respective brokers for purchasing or sale of…

Q: what are the main features of preffered stocks

A: Preferred stocks : Preferred stocks are the securities, whose holders have a stake in the company.…

Q: what are the advantages and disadvantages of covered call and protective put which are options…

A: Due to uncertain factors, security prices fluctuate regularly which creates risk for the investors.…

Q: a) What type of option is it (i.e., the term that indicates what the option holder has the right to…

A: discussed that equity can be thought of as an option for the firm. If this is true, answer the…