Factoring

Definition of Factoring Factoring is a financial service in which the business entity sells its bill receivables to a third party at a discount in order to raise funds. …

Strangle

Strangle is a delta neutral trading strategy which pays off only with a large movement in the underlying market price. It consists of taking positions in call and put …

Strip and Strap

Strip: A strip is delta negative trading strategy. Being delta negative implies that the value of the strip position increases when the price of the underlying security goes down.

Straddle

Option straddle is a delta neutral trading strategy which pays off when the movement in the underlying market price is large enough to counter the combined premium of the …

Butterfly

A butterfly is a complex and low-risk trading strategy involving four options. The long trader buys two options at different strike prices and sells two options at the same …

Bull Spread

Options are risky instruments because a small movement in the underlying price translates into a large percentage change in the options’ prices. They are ideal for high-risk traders. But …

Bear Spread

A bear spread is a bearish trading strategy with limited risk and reward for the buyer. As with a bull spread, the upside and downside of a bear spread …

Swaps

A swap is a derivative instrument where the two contracting parties agree to exchange a set number of cash flows from the financial instruments owned by both the parties for …