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how an option cycle works | an option cycle refers to the cycle of months available for a listed option class option cycles are integrated across all of the options and futures markets cycles are regulated by regulatory authorities an investor will typically view available options by option class an option class is a grouping of calls or puts ava... | |
what is an options disclosure document odd | the options disclosure document odd is a publication issued by the options clearing corporation occ that serves as an important guide for options traders the comprehensive document formally titled characteristics and risks of standardized options is particularly essential for novice options traders 1options are financi... | |
what is option margin | option margin is the cash or securities an investor must deposit in their account as collateral before writing or selling options margin requirements are established by the federal reserve board in regulation t and vary based on the type of option basics of option marginoption margin requirements are very complex and d... | |
how to avoid option margin requirements | certain option positions do not require margins for example there are no margin requirements for long options whether they are puts or calls in other instances traders can use several different strategies to avoid option margin requirements calculating option margin requirementsthe easiest way to calculate option margi... | |
what is an option pool | an option pool consists of shares of stock reserved for employees of a private company the option pool is a way of attracting talented employees to a startup company if the employees help the company do well enough to go public they will be compensated with stock employees who get into the startup early will usually re... | |
how option pools are structured | the shares that comprise an option pool typically are drawn from founder stock in the company rather than the shares earmarked for investors this may be 15 25 of the overall outstanding shares and may be determined when the startup receives its earliest funding round as part of the overall terms put in place it is also... | |
what is an option premium | an option premium is the current market price of an option contract it is thus the income received by the seller writer of an option contract to another party in the money option premiums are composed of two factors intrinsic and extrinsic value out of the money options premiums consist solely of extrinsic value 1for s... | |
what is option pricing theory | option pricing theory estimates a value of an options contract by assigning a price known as a premium based on the calculated probability that the contract will finish in the money itm at expiration essentially option pricing theory provides an evaluation of an option s fair value which traders incorporate into their ... | |
what is an option series | an option series refers to a grouping of options on an underlying security with the same specified strike price and the same expiration month however call and put options are parts of separate series for example a call option series would include the available calls on a specific security at a certain strike price that... | |
what is optionable stock | an optionable stock is one where the shares have the necessary liquidity and volume such that an exchange lists that stock s options for trading in order for a stock to be optionable exchanges mandate that certain criteria be met including a minimum share price number of shares outstanding and minimum unique shareholde... | |
the term option refers to a financial instrument that is based on the value of underlying securities such as stocks indexes and exchange traded funds etfs an options contract offers the buyer the opportunity to buy or sell depending on the type of contract they hold the underlying asset unlike futures the holder is not... | each options contract will have a specific expiration date by which the holder must exercise their option the stated price on an option is known as the strike price options are typically bought and sold through online or retail brokers investopedia michela buttignolunderstanding optionsoptions are versatile financial p... | |
how do options work | options are a type of derivative product that allow investors to speculate on or hedge against the volatility of an underlying stock options are divided into call options which allow buyers to profit if the price of the stock increases and put options in which the buyer profits if the price of the stock declines invest... | |
what are the main advantages of options | options can be very useful as a source of leverage and risk hedging for example a bullish investor who wishes to invest 1 000 in a company could potentially earn a far greater return by purchasing 1 000 worth of call options on that firm as compared to buying 1 000 of that company s shares in this sense the call option... | |
what are the main disadvantages of options | the main disadvantage of options contracts is that they are complex and difficult to price this is why options are considered to be a security most suitable for experienced professional investors in recent years they have become increasingly popular among retail investors because of their capacity for outsized returns ... | |
how do options differ from futures | both options and futures are types of derivatives contracts that are based on some underlying asset or security the main difference is that options contracts grant the right but not the obligation to buy or sell the underlying in the future futures contracts have this obligation | |
is an options contract an asset | yes an options contract is a derivatives security which is a type of asset the bottom lineoptions are a type of derivative product that allow investors to speculate on or hedge against the volatility of an underlying stock options are divided into call options which allow buyers to profit if the price of the stock incr... | |
what is options backdating | options backdating is the process of granting an employee stock option eso that is dated before its actual issuance in this way the exercise strike price of the granted option can be set at a lower price than that of the company s stock price at the granting date this process makes the granted option in the money itm a... | |
what is the options clearing corporation occ | the options clearing corporation occ is an organization that acts as both the issuer and guarantor for options and futures contracts the largest equity derivatives clearing organization in the world it operates under the jurisdiction of the commodities futures trading commission cftc and the u s securities and exchange... | |
what is an options contract | an options contract is a financial agreement that grants the buyer the right but not the obligation to buy or sell a particular asset like a stock at a preset price within a given period as financial markets have grown increasingly complex and at times more volatile options have emerged as a potent way to guard against... | |
when trading volume or volatility is relatively low and the market is trending upward traders often buy one or more calls since call options tend to appreciate in value as the underlying asset s price rises meanwhile traders tend to buy puts when volume or volatility is relatively low and the market is trending downwar... | american options can be exercised any time before the expiration date of the option while european options can only be exercised on the expiration date or the exercise date hedging and speculating with options contractsoptions can be an effective tool for hedging as they allow investors to protect their investments aga... | |
are there other derivatives like options | there are several financial derivatives like options including futures contracts forwards and swaps each of these derivatives has specific characteristics uses and risk profiles like options they are for hedging risks speculating on future movements of their underlying assets and improving portfolio diversification 3 | |
what are some options trading strategies | options trading strategies range from basic to highly complex involving single or multiple and simultaneous options positions including covered calls protective puts bull and bear spreads straddles strangles butterfly spreads and calendar spreads each options strategy comes with its own set of risks and rewards before ... | |
what is natural hedging | natural hedging is a risk management strategy to mitigate the potential negative effects of price or interest rate changes and other financial risks it involves structuring the portfolio so that gains in one asset can offset losses in another without using derivatives the bottom lineoptions contracts are derivatives th... | |
what is the options industry council oic | options industry council oic refers to a cooperative that helps educate investors and financial advisers about the benefits and risks of exchange traded equity options understanding the options industry council oic the oic was established in 1992 by u s options exchanges and the options clearing corporation occ its mis... | |
what are options on futures | an option on a futures contract gives the holder the right but not the obligation to buy or sell a specific futures contract at a strike price on or before the option s expiration date these work similarly to stock options but differ in that the underlying security is a futures contract most options on futures such as ... | |
how options on futures work | an option on a futures contract is very similar to a stock option in that it gives the buyer the right but not obligation to buy or sell the underlying asset while creating a potential obligation for the seller of the option to buy or sell the underlying asset if the buyer so desires by exercising that option 1 that me... | |
what is the options price reporting authority opra | the options price reporting authority opra is a committee of representatives from participating securities exchanges responsible for providing last sale options quotations and information from the participating exchanges serving as a national market system plan opra oversees the process by which participants exchange c... | |
who is the oracle of omaha | the oracle of omaha is a nickname for warren buffett who is arguably one of the greatest investors of all time buffett is the chair and ceo of berkshire hathaway a company that he became the controlling shareholder of in the mid 1960s he is called the oracle of omaha because the investment community very closely follow... | |
what is an oral contract | an oral contract is a type of business contract that is outlined and agreed to via spoken communication but not written down although it can be difficult to prove the terms of an oral contract in the event of a breach this type of contract is legally binding understanding oral contractsoral contracts are generally cons... | |
when one or both parties act on the contract this too can be construed as evidence that a contract existed furthermore letters memos bills receipts emails and faxes can all be used as evidence to support the enforceability of an oral contract | a famous example of the enforceability of an oral contract occurred in the 1990s when actress kim basinger backed out of her promise to star in jennifer lynch s film boxing helena a jury awarded the producers 8 million in damages basinger appealed the decision and later settled for a lower amount but not before having ... | |
when oral contracts fall apart | oral contracts are best used for simple agreements for example an oral contract to trade a used lawn mower for a used clothes dryer need not require much detail the simpler the contract the lower the chances that the parties involved will need to go to court but more complex contracts such as those for employment typic... | |
is an oral contract enforceable | generally yes an oral contract is enforceable even though it may be difficult to prove the enforceability of oral contracts also comes down to the jurisdiction in which a contract may be contested and the type of agreement the contract relates to | |
what makes a valid oral contract | a valid oral contract consists of an offer usually a price or a promise for some action to be taken and an acceptance an agreement accepting the offer in exchange for payment or service there need not be more information involved in an oral contract than just the offer and the acceptance of that offer | |
what are the disadvantages of oral contracts | the primary disadvantages of oral contracts are that they are difficult to enforce may lead to confusion and error or the outcome may be inconsistent with what was agreed upon because oral contracts are made through spoken word they can be difficult to enforce in a court of law if one party backs out or does not comple... | |
what is the orange book | the orange book is a list of drugs and pharmaceuticals that the u s food and drug administration fda has approved as both safe and effective although it is commonly called the orange book its formal name is approved drug products with therapeutic equivalence evaluations the orange book does not include drugs only appro... | |
when a new drug is introduced to the public the food and drug administration fda awards the drugmaker a medical patent that protects the product from competitors for a given period of time orphan drug patents last for seven years while a new chemical entity exclusivity lasts for five years 6 | under the hatch waxman act in order for a generic drug manufacturer to win approval they must certify that they will not launch their generic product until after the expiration of the patent 7the orange book is available as a pdf in print and electronically the electronic version of the orange book is the most up to da... | |
what is an order | an order consists of instructions to a broker or brokerage firm to purchase or sell a security on an investor s behalf an order is the fundamental trading unit of a securities market orders are typically placed over the phone or online through a trading platform although orders may increasingly be placed through automa... | |
what is the order audit trail system oats | the order audit trail system oats is an automated computer system established by the financial industry regulatory authority finra it is used to record information relating to orders quotes and other related trade data from all equities traded on the national market system nms including over the counter otc stocks this... | |
what is an order book | the term order book refers to an electronic list of buy and sell orders for a specific security or financial instrument organized by price level an order book lists the number of shares being bid on or offered at each price point or market depth it also identifies the market participants behind the buy and sell orders ... | |
what is an order driven market | an order driven market is a financial market where all buyers and sellers display the prices at which they wish to buy or sell a particular security as well as the amounts of the security desired to be bought or sold this kind of trading environment is the opposite of a quote driven market which only displays bids and ... | |
what is an order imbalance | order imbalance is a situation resulting from an excess of buy or sell orders for a specific security on a trading exchange making it impossible to match the orders of buyers and sellers for securities that are overseen by a market maker or specialist shares may be brought in from a specified reserve to add liquidity t... | |
what is an order management system oms | an order management system oms is an electronic system developed to execute securities orders in an efficient and cost effective manner brokers and dealers use an oms when filling orders for various types of securities and can track the progress of each order throughout the system an oms in the financial markets may al... | |
why do traders need an oms | an oms helps traders enter and execute orders from the simple to the complex more efficiently this lowers transaction costs helps gain best execution and reduces errors it also reports fills books trades and updates one s positions or portfolio some omss can also automate trading strategies or risk mitigating measures ... | |
why do businesses need an oms | businesses benefit from an oms by streamlining the order fulfillment process this can manage everything from point of sale to delivery ecommerce sellers can especially benefit from an oms that can automate logistics shipment returns and interface with platforms like amazon ebay or aliexpress | |
what does an order management system do | for businesses an order management system is a digital way of tracking an order from the order entry to its completion an order management system will record all of the information and processes that occur through an order s lifecycle this includes order entry pathways inventory management order completion and after or... | |
what is an order paper | an order paper or order instrument is a negotiable instrument that is payable to a specified person or its assignee an instrument such as an order paper is negotiable only if it is payable to the order of a specified person meaning that it must designate an individual s name to be paid out it is the opposite of a beare... | |
what makes an order paper | to be considered an order instrument a negotiable instrument must have certain characteristics it must an order instrument must include the phrase pay to the order of named person or entity or to named person or entity or order if the words or order are included on the order instrument the named payee is permitted to d... | |
when an order paper is endorsed it becomes a bearer instrument for example when you receive a payment by check and endorse that check your check which was an order paper prior to endorsement becomes a bearer instrument once endorsed anyone who bears or possesses your check can cash it even if they re not the person nam... | however a payee can avoid turning an order paper into a bearer instrument after endorsing it the payee can use a special endorsement which involves signing the instrument over to another payee to do this with a check for example the payee can write the words pay to the order of named person or entity in the endorsement... | |
what is the order protection rule | the order protection rule is one of the four main provisions of the regulation national market system nms the rule is meant to ensure that investors receive an execution price that is equivalent to what is being quoted on any other exchange where the security is traded the rule eliminates the possibility of orders bein... | |
how the order protection rule works | the order protection rule along with regulation nms as a whole was instituted to make financial markets more liquid and transparent via better access to data in general and improved quote displays and fairness in prices in particular before the regulation was passed in 2005 by the securities and exchange commission sec... | |
what is an orderly market | an orderly market is any market in which supply and demand are reasonably equal an orderly market is said to be in a state of equilibrium this term can also refer to a site of exchange for goods services or financial securities that are traded in a fair reliable secure accurate and efficient way orderly markets contrib... | |
what are ordinary and necessary expenses o ne | ordinary and necessary expenses are expenses incurred by individuals as the cost of owning a business or carrying on a trade ordinary and necessary expenses are categorized as such for income tax purposes and these expenses are generally considered tax deductible in the year they are incurred 1 these expenses are outli... | |
what is an ordinary annuity | an ordinary annuity is a series of equal payments made at the end of consecutive periods over a fixed length of time ordinary annuities may be paid monthly quarterly semi annually or annually the opposite of an ordinary annuity is an annuity due in which payments are made at the beginning of each period a rent payment ... | |
how an ordinary annuity works | an example of an ordinary annuity is the interest payment on a bond these are generally made semiannually regular quarterly dividends from a stock that has maintained a stable payout level for years are another example the present value of an ordinary annuity is largely dependent on the prevailing interest rate because... | |
is an ordinary annuity better than an annuity due | generally an annuity due is better for the party that is paying and not as good for the recipient the recipient is paying up front for the period ahead with an ordinary annuity the payment is made at the end of the previous period money has a time value the sooner a person gets paid the more the money is worth | |
what is an annuity | the word annuity commonly refers to an insurance product purchased by an individual in return for a lump sum payment or a series of payments to the financial institution the individual receives a steady stream of regular payments the annuity is most often used as a source of retirement income | |
what are the most common types of ordinary annuities | the most common types of ordinary annuities are stock and bond dividends these are paid at the end of each period of the agreement rather than at the beginning of the period in the case of stock dividends this is because the dividends are based on the company s profits for the immediate preceding period the bottom line... | |
what are ordinary dividends | ordinary dividends are a share of a company s profits passed on to the shareholders periodically one of the primary advantages of owning stocks also known as equities is the regular payment of dividend income dividends are considered ordinary by default although there are cases when a dividend may be classified as qual... | |
what is ordinary income | ordinary income is any income earned by an organization or an individual taxable at marginal tax rates it can include wages salaries tips bonuses commissions rents royalties short term capital gains unqualified dividends and interest income 1individual income vs business incomeordinary income comes in two forms persona... | |
what is taxed as ordinary income | most of an individual s income will be taxed at the regular marginal tax rates 1 there are exceptions where income won t be taxed these exceptions include long term capital gains and qualified dividends both taxed at more favorable rates | |
is rent ordinary income | rental income is defined by the irs as any payment for the use or occupation of property and is generally taxed as ordinary income however landlords can deduct certain costs from this income to reduce the figure at which the income is taxed deductible expenses may include mortgage interest property tax repair costs adv... | |
do individuals have to report interest income | most interest is taxed as ordinary income and subject to ordinary income tax rates notable exceptions include interest earned from a series ee or series i bond issued after 1989 to pay qualified higher educational expenses interest on insurance dividends left on deposit with the u s department of veterans affairs and i... | |
what is an ordinary loss | an ordinary loss is loss realized by a taxpayer when expenses exceed revenues in normal business operations ordinary losses are those losses incurred by a taxpayer which are not capital losses an ordinary loss is fully deductible to offset income thereby reducing the tax owed by a taxpayer understanding ordinary lossor... | |
how much ordinary loss can you claim on taxes | an ordinary loss is fully deductible from taxable income there are no limits on how much can be deducted can you carry over ordinary losses ordinary losses are fully deductible in the year losses were incurred and cannot be carried forward to subsequent years capital losses exceeding the maximum deductible amount can b... | |
what is the difference between an ordinary loss and a capital loss | a capital loss occurs when a capital asset is sold for less than what it cost for example if equipment that cost 10 000 is sold for 8 000 a 2 000 capital loss is incurred an ordinary loss occurs when business expenses exceed business income when non capital assets are sold or for certain non capital transactions | |
what are ordinary shares | ordinary shares also called common shares are stocks sold on a public exchange each share of stock generally gives its owner the right to a single vote at a company shareholders meeting unlike in the case of preferred shares the owner of ordinary shares is not guaranteed a dividend the vast majority of shares sold on a... | |
what is organic growth | organic growth is the growth a company achieves by increasing output and enhancing sales internally this does not include profits or growth attributable to mergers and acquisitions but rather an increase in sales and expansion through the company s own resources organic growth stands in contrast to inorganic growth whi... | |
what is an example of organic growth | a typical example of organic growth is a company building new factories or introducing new products in order to expand its market this is in contrast to buying an existing competitor which would be considered inorganic growth | |
what are the advantages of organic growth | organic growth is considered a slower growth strategy although it tends to be more sustainable in the long run organic growth is a gradual strategy where a company seeks to expand marketing increase sales and determine consumer needs although this strategy is relatively slow it allows a company to build momentum with e... | |
what are the advantages of inorganic growth | inorganic growth is a corporate strategy where a company seeks to expand through mergers or acquisitions of other companies this is faster than organic growth strategies allowing the company to rapidly acquire new consumers or infrastructure the downside is that such acquisitions tend to be costly and are difficult to ... | |
what is an organic reserve replacement | organic reserve replacement is the supply of oil reserves which an oil company acquires through exploration and production rather than by purchasing a proven reserve recoverable reserves are oil and gas reserves which are economically and technically feasible to extract at the existing price of oil within current econo... | |
how organic reserve replacement works | organic reserve replacement is a relevant metric to those needing to evaluate an oil or gas company these evaluations would generally include a review of the reserve replacement ratio the reserve replacement ratio expresses the amount of proved reserves added to a company s reserve base during the year as compared to t... | |
what are organic sales | organic sales are revenues generated from within a company organic sales encompass those streams of revenues that are a direct result of the firm s existing operations as opposed to revenues that have been acquired through the purchase of another company or business unit in the past year the sale or disposal of busines... | |
what is the organisation of eastern caribbean states oecs | the organisation of eastern caribbean states oecs is an intergovernmental organization that promotes economic integration and trade cooperation among its member states in the eastern caribbean understanding the organisation of eastern caribbean states oecs the oecs was founded on june 18 1981 when the original seven me... | |
what is the organisation for economic co operation and development oecd | the organisation for economic co operation and development oecd is a group of 37 member countries that discuss and develop economic and social policy 1 2 oecd members are typically democratic countries that support free market economies understanding the organisation for economic co operation and development oecd the o... | |
what does oapec mean | the organization of arab petroleum exporting countries oapec is an inter governmental organization based in kuwait oapec fosters cooperation among its 11 member arab oil exporting nations 1understanding oapecoapec was established in 1968 by kuwait libya and saudi arabia its other members include algeria bahrain egypt i... | |
what is the organization of the petroleum exporting countries opec | the term organization of the petroleum exporting countries opec refers to a group of 13 of the world s major oil exporting nations opec was founded in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid 1 opec is a cartel that aims to manage the supply o... | |
how the opec influences oil prices | collectively opec is the largest producer and exporter of crude oil and petroleum products in the world roughly 40 of the world s oil production and 60 of the world s petroleum market come from the group s member countries and they accounted for more than 80 of the world s proven oil reserves in 2021 14having said this... | |
has considerable power | incentivized to keep oil prices high to maintain global market shareopec challenges and responsesoil prices and opec s role in the international petroleum market are subject to a number of different factors the advent of new technology especially fracking in the united states has had a major effect on worldwide oil pri... | |
what are the main goals of opec | opec s main goal is to maintain oil prices at a profitable level for its members while keeping the market as free as possible from restrictions the organization ensures its members receive a steady stream of income from an uninterrupted supply of oil 2 | |
what countries are in opec | opec is made up of 13 member nations the five founding members are iran iraq kuwait saudi arabia and venezuela while the other full members include algeria angola congo equatorial guinea gabon libya nigeria and the united arab emirates 3 | |
is the u s part of opec | the united states is not part of opec this means that the country has control over its own production and supply without any interference from the organization who left opec countries that left opec include ecuador which withdrew from the organization in 2020 qatar which terminated its membership in 2019 and indonesia ... | |
what is opec | in december 2016 opec formed an alliance with other oil exporting nations that were not a part of the organization creating an entity that is commonly referred to as opec or opec plus prominent members of opec include russia mexico and kazakhstan working in coordination with additional oil exporting countries makes the... | |
what is organizational behavior ob | organizational behavior is the academic study of how people interact within groups the principles of ob are applied primarily in attempts to help businesses operate more effectively theresa chiechi investopediaunderstanding organizational behavior ob the study of organizational behavior includes areas of research dedic... | |
why is organizational behavior important | organizational behavior describes how people interact with one another inside of an organization such as a business these interactions subsequently influence how the organization itself behaves and how well it performs for businesses organizational behavior is used to streamline efficiency improve productivity and spar... | |
what are the 4 elements of organizational behavior | the four elements of organizational behavior are people structure technology and the external environment by understanding how these elements interact with one another improvements can be made while some factors are more easily controlled by the organization such as its structure or people hired it still must be able t... | |
what are the 3 levels of organizational behavior | the first is the individual level which involves organizational psychology and understanding human behavior and incentives the second level is groups which involves social psychology and sociological insights into human interaction and group dynamics the top level is the organizational level where organization theory a... | |
what are some common problems that organizational behavior tries to solve | organizational behavior can be used by managers and consultants to improve the performance of an organization and to address certain key issues that commonly arise these may include a lack of direction or strategic vision for a company difficulty getting employees on board with that vision pacifying workplace conflict ... | |
what is an organizational chart | an organizational chart is a diagram that visually conveys a company s internal structure by detailing the roles responsibilities and relationships between individuals within an entity it is one way to visualize a bureaucracy organizational charts are alternatively referred to as org charts or organization charts under... | |
what should an organizational chart show | an organizational chart should visually show what the hierarchical status of a particular employee relative to other individuals within the company for example an assistant director will invariably fall directly below a director on the chart indicating that the former reports to the latter | |
why is an organizational chart important | org charts depict an organization s hierarchy which can clearly identify seniority and lines of authority that ought to be followed it can also show which roles are responsible for what tasks divisions departments or regions this can remove ambiguity and improve communication | |
what are the most commonly used organizational charts | the two types of organizational chart formats that are most often used are hierarchical and flat hierarchical is the most common and it shows the ranking of individuals based on their role in the company in a descending vertical order a flat format also known as a horizontal organizational chart places all individuals ... | |
what is organizational economics | organizational economics is a branch of applied economics and new institutional economics that studies the transactions occurring within individual firms as opposed to the transactions that occur within the greater market organizational economists study how economic incentives institutional characteristics and transact... | |
what is an organizational structure | an organizational structure is a system that outlines how certain activities are directed to achieve the goals of an organization these activities can include rules roles and responsibilities the organizational structure also determines how information flows between levels within the company decisions flow from the top... | |
what are some types of organizational structures | organizational structures take on many forms examples include functional multi divisional flat and matrix structures as well as circular team based and network structures | |
what are the key elements of an organizational structure | key elements of an organizational structure include how certain activities are directed to achieve the goals of an organization they include rules roles responsibilities and how information flows between levels within the company | |
what is an organizational structure example | a decentralized structure is an example of an organizational structure it gives individuals and teams high degrees of autonomy without requiring a core team to regularly approve business decisions spotify with its squads tribes and guilds and google with its independent companies are loosely run this way 45 | |
what is an organizational structure chart | organizational structures are normally illustrated in some sort of chart or diagram a pyramid could be used in a centralized structure with the most powerful members of the organization sitting at the top and the least powerful at the bottom | |
what is the best organizational structure | there s no one best organizational structure it depends on the nature of the company and the industry in which it operates the bottom lineentire fields of study are based on how to optimize and best structure organizations to be the most effective and productive senior leaders should consider a variety of factors befor... | |
what is organized labor | organized labor is a strategy of workers joining together to engage in collective bargaining for higher wages job benefits or better working conditions organized labor associations are also known as unions |
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