Intrinsic Value is the value of a security which is “built into it.” Both options and stocks have it, but it is different for each. Options and stocks have intrinsic value.
For options, the intrinsic value is easy to compute, if the option is in-the-money. It is the difference between the strike price of the option and the market price of the underlying security. If an option is out-of-the-money it has no intrinsic value.
For stocks, there is no simple way to compute intrinsic value, and different analysts and investors have a different idea of how to define it. Methods that can be used include Discounted Cash Flow, P/E ratio, EV/EBITDA, and book value. The book value or breakup value of a business can be seen as the least possible intrinsic value of a stock, but most value investors will use other metrics.
Cash Balance plans are Defined Benefit plans, but are not much like Pensions, or other types of retirement plans
Stochastics is a methodology for technical analysis as following the “speed or the momentum of the price”
Paid-up capital is the money (‘capital’) collected by a company from issuing shares of their stock
In a reverse mortgage, instead of paying to for your home, you’re getting paid for your home. It is considered a loan
Companies with significant operations or sales abroad will be affected by changes in foreign currency exchange rates
A stop-loss order will name a price below (above) the market price on a long (short) position, where a sell order will trigger
The largest single-day point gain occurred on October 13, 2008 and, the largest percentage gain was on March 15, 1933
Blend mutual funds offer exposure to both growth stocks and value stocks. Blend mutual funds seek to capture the...
A bear put spread involves the use of two puts, one sold and one bought, at different strike prices