A bull put spread involves short selling a put option as well as purchasing another put option with a lower strike price (on the same underlying asset) with the same...
The bull call spread is a two-leg spread strategy traditionally involving 2 calls, one with a lower strike price and the other with a higher strike price. It uses two...
What Is Hedging? A hedge is an investment done with the goal of reducing the risk of adverse price movements in an asset. A hedge is an investment in a...
Did you know that you can sell a stock before buying it? What is Shorting? When you believe that a stock’s price is going to decline, you make money by...
Here’s an explainer on how leverage works in the equity and derivatives market. Let’s start with the basics. What is Leverage? Leverage refers to a mechanical advantage which amplifies a...
In this blog, we will try to understand all things related to taxation when trading is declared as a business income. Trading income declared as business income can be classified...
When two traders agree to trade a specific asset at a certain price in the future, there are certain risks involved. A key role of exchanges is to eliminate the...
There are two types of derivatives markets – Exchange-Traded & Over the Counter (OTC). But first, let’s look at a scenario. If Mr. X is trying to sell a house,...
What Is Rho? Rho measures how the price of an option changes with changes in interest rates. Rho is the least important of all the 5 option Greeks. How Does...
What is Vega? Vega is the option Greek that explains the relationship between the price of an option and volatility changes in the underlying security. Theoretically, Vega gives the value...
