Understanding Bank Instruments, from Bank to End Investor.
Trading spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine “risk” funds should be used in such trading. Hi there, I'm going to begin in the sharemarket next year and I want to sign up to an online broker. I've been reading through a lot of recommendations but the ones on Whirlpool are all from over 6 years ago and are out of date.
A benchmark interest rate that major global banks charge each other in the London interbank market for short-term loans of one day to 12 months. The World Currency Converter is offered to users with no liability whatsoever assumed for errors in rates, conversions, trends, or otherwise. If you require a foreign exchange rate for a specific transaction, call or visit your bank or a reputable foreign exchange dealer. Only they will be able to quote an actual rate and price for your specific transaction.
The above map represents estimated tribal ranges in what is now the state of immediately prior to contact with European settlers. We use the term tribal ranges rather than tribal boundaries as there is evidence that these were fluid instead of fixed. Also, please note that there is controversy within anthropologic and Native American communities regarding this subject. This tool contains a wide range of acronyms used in international trade.
Please note that some entries are included for historic purposes and may not correspond to specific A-Z Dictionary of International Trade definition entries contained on this site. The following tool provides a list of the most common business entities worldwide. It is not intended to be exhaustive of all enterprises.
Nonprofit enterprises and informal associations are generally not included, unless they are in common use among traders. Emphasis has been given to private enterprises, rather than government or civil enterprises.
The detailed legal requirements for enterprises are complex and differ from country to country. Moreover, the usually have little meaning within a general definition or comparison of enterprises. The following definitions include some of these details for the purposes of giving a general idea of the relative size and complexity of the enterprises, but it is beyond the scope of this work to list and explain every legal nuance, and exception to the exception.
For more detailed information, advice should be sought from legal counsel in the relevant country. Similarly, the word "incorporate" in many countries refers to the procedure for registration of a business, even a partnership; therefore usage of this word has been avoided. Stock usually refers to an ownership interest evidenced by a formal document issued by the enterprise. Share has a broader meaning in that it can describe a formal interest such as a stock as well as a less formal interest such as in a partnership.
Shares can have different characteristics depending upon the type of enterprise and country of the enterprise. Search airline callsigns, airline ownership names, 3-letter ICAO designator codes, 2-character IATA designator codes, and country of registry for more than airlines internationally.
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FIPS 10 codes are intended for general use throughout the U. Government, especially in activities associated with the mission of the U. Department of State and national defense programs. ISO includes two- and three-character alphabetic codes and three-digit numeric codes that may be needed for activities involving exchange of data with international organizations that have adopted that standard.
The 8th edition established trigraph codes for each country based upon the ISO alpha-3 character sets. These codes are used throughout NATO. This glossary of computer terms is not meant to be exhaustive. Rather, it is designed to offer the user a solid base in understanding the basic terms of computing with an emphasis upon Internet technology and e-commerce. Note that many terms are listed by their acronym when common usage dictates.
In some instances the full term is spelled out with a cross reference to the main entry. This page can be used to find individuals or groups that are restricted from commercial transactions with US exporters.
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Security is a very broad field. Up until the mid s, security was primarily concerned with loss prevention from a logistics and retail perspective , labor unrest and military issues.
Since that time, data security, cyber security, industrial espionage, and terrorism have become the hot new issues facing companies and governments alike. A comprehensive listing of security terms would fill an entire reference book.
The emphasis of this glossary is to introduce the international trade and logistics reader to a sampling of key terms used primarily in supply chain management and data security. As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.
The Unverified List includes names and countries of foreign persons who in the past were parties to a transaction with respect to which the U. Any transaction to which a listed person is a party will be deemed by BIS to raise a Red Flag with respect to such transaction within the meaning of the guidance set forth in Supplement No.
Index Dow Jones U. Industrials Index Dow Jones U. Semiconductors Index Dow Jones U. Technology Index Dow Jones U. Momentum Factor Index Fidelity U. Quality Factor Index Fidelity U. Treasury 20 Plus Year U. The trader would have no obligation to buy the stock, but only has the right to do so at or before the expiration date.
The risk of loss would be limited to the premium paid, unlike the possible loss had the stock been bought outright.
The holder of an American-style call option can sell his option holding at any time until the expiration date, and would consider doing so when the stock's spot price is above the exercise price, especially if he expects the price of the option to drop.
By selling the option early in that situation, the trader can realise an immediate profit. Alternatively, he can exercise the option — for example, if there is no secondary market for the options — and then sell the stock, realising a profit.
A trader would make a profit if the spot price of the shares rises by more than the premium. For example, if the exercise price is and premium paid is 10, then if the spot price of rises to only the transaction is break-even; an increase in stock price above produces a profit. If the stock price at expiration is lower than the exercise price, the holder of the options at that time will let the call contract expire and only lose the premium or the price paid on transfer.
A trader who expects a stock's price to decrease can buy a put option to sell the stock at a fixed price "strike price" at a later date. The trader will be under no obligation to sell the stock, but only has the right to do so at or before the expiration date.
If the stock price at expiration is below the exercise price by more than the premium paid, he will make a profit. If the stock price at expiration is above the exercise price, he will let the put contract expire and only lose the premium paid. In the transaction, the premium also plays a major role as it enhances the break-even point. For example, if exercise price is , premium paid is 10, then a spot price of to 90 is not profitable.
He would make a profit if the spot price is below It is important to note that one who exercises a put option, does not necessarily need to own the underlying asset. Specifically, one does not need to own the underlying stock in order to sell it. The reason for this is that one can short sell that underlying stock. A trader who expects a stock's price to decrease can sell the stock short or instead sell, or "write", a call.
The trader selling a call has an obligation to sell the stock to the call buyer at a fixed price "strike price". If the seller does not own the stock when the option is exercised, he is obligated to purchase the stock from the market at the then market price. If the stock price decreases, the seller of the call call writer will make a profit in the amount of the premium. If the stock price increases over the strike price by more than the amount of the premium, the seller will lose money, with the potential loss being unlimited.
A trader who expects a stock's price to increase can buy the stock or instead sell, or "write", a put. The trader selling a put has an obligation to buy the stock from the put buyer at a fixed price "strike price". If the stock price at expiration is above the strike price, the seller of the put put writer will make a profit in the amount of the premium. If the stock price at expiration is below the strike price by more than the amount of the premium, the trader will lose money, with the potential loss being up to the strike price minus the premium.
Combining any of the four basic kinds of option trades possibly with different exercise prices and maturities and the two basic kinds of stock trades long and short allows a variety of options strategies. Simple strategies usually combine only a few trades, while more complicated strategies can combine several.
Strategies are often used to engineer a particular risk profile to movements in the underlying security. For example, buying a butterfly spread long one X1 call, short two X2 calls, and long one X3 call allows a trader to profit if the stock price on the expiration date is near the middle exercise price, X2, and does not expose the trader to a large loss.
Selling a straddle selling both a put and a call at the same exercise price would give a trader a greater profit than a butterfly if the final stock price is near the exercise price, but might result in a large loss.
Similar to the straddle is the strangle which is also constructed by a call and a put, but whose strikes are different, reducing the net debit of the trade, but also reducing the risk of loss in the trade. One well-known strategy is the covered call , in which a trader buys a stock or holds a previously-purchased long stock position , and sells a call.
If the stock price rises above the exercise price, the call will be exercised and the trader will get a fixed profit. If the stock price falls, the call will not be exercised, and any loss incurred to the trader will be partially offset by the premium received from selling the call.
Overall, the payoffs match the payoffs from selling a put. This relationship is known as put-call parity and offers insights for financial theory. Another very common strategy is the protective put , in which a trader buys a stock or holds a previously-purchased long stock position , and buys a put. This strategy acts as an insurance when investing on the underlying stock, hedging the investor's potential loses, but also shrinking an otherwise larger profit, if just purchasing the stock without the put.
The maximum profit of a protective put is theoretically unlimited as the strategy involves being long on the underlying stock. The maximum loss is limited to the purchase price of the underlying stock less the strike price of the put option and the premium paid. A protective put is also known as a married put.
Another important class of options, particularly in the U. Other types of options exist in many financial contracts, for example real estate options are often used to assemble large parcels of land, and prepayment options are usually included in mortgage loans. However, many of the valuation and risk management principles apply across all financial options.
There are two more types of options; covered and naked. Options valuation is a topic of ongoing research in academic and practical finance. In basic terms, the value of an option is commonly decomposed into two parts:. Although options valuation has been studied at least since the nineteenth century, the contemporary approach is based on the Black—Scholes model which was first published in The value of an option can be estimated using a variety of quantitative techniques based on the concept of risk neutral pricing and using stochastic calculus.
The most basic model is the Black—Scholes model. More sophisticated models are used to model the volatility smile. These models are implemented using a variety of numerical techniques. More advanced models can require additional factors, such as an estimate of how volatility changes over time and for various underlying price levels, or the dynamics of stochastic interest rates. The following are some of the principal valuation techniques used in practice to evaluate option contracts.
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Monte Carlo methods for option pricing. Binomial options pricing model.