Stock index option trading
This table highlights a few of the general differences between index options and stock options. That would be ridiculous. If a piece of news came out immediately after the stock market close, it might have a significant impact stock index option trading the value of stock options and narrow-based index options. This economics -related article is a stub.
All investments involve risk, losses stock index option trading exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. However, since there are so many different sectors in broad-based indexes, this stock index option trading not so much of a concern. If a piece of news came out immediately after the stock market close, it might have a significant impact on the value of stock options and narrow-based index options.
Retrieved from " https: For this reason, index options are typically closed out after the market has closed. That would be ridiculous. There is no guarantee that the forecasts of implied volatility or the Greeks will be correct. Economics and finance stubs Derivatives finance.
A stock index option provides the right to trade a specific stock index at a specified price by a specified expiration date. They give an investor the right to buy or sell the underlying stock index for a defined time period. Views Read Edit View history. You can help Wikipedia by expanding it. Meet the Greeks Stock index option trading is an Index Option?
A call option on a stock index gives you the right to buy the index, and a put option on a stock index gives you the right to sell the index. Implied volatility represents the consensus of the marketplace as to the future level of stock price volatility or the probability of reaching a stock index option trading price point. That would be ridiculous. In practice, there are lots of small exceptions to these general rules.