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What does out of the money (OTM) mean?
If an option on an underlying security does not have a strike price giving the option holder the ability to exercise the option for a profit (based on the current market price of the underlying security) that option is “Out of The Money.”
An option is Out Of The Money (OTM) if it isn’t profitable for the option holder to exercise it. Options have a strike price that contractually defines the amount which will be paid for the underlying security if the option is exercised.
Recall: a call option gives the option holder the right to buy the underlying security at the strike price, and a put allows the option holder to sell the underlying security at the strike price. That would mean if the strike price of a call is still higher than the market price, you wouldn't want to buy the underlying security at the higher strike price, so this option is Out Of The Money.
For a put, it's out of the money if the opposite situation exists: the strike price is lower than the market price, so it wouldn't make sense to exercise the option and sell the underlying security at the lower-than-market strike price. When an option's strike price is the same as the market price of the underlying security, it is "At The Money," and when the strike price makes the option profitable to exercise, the option is "In The Money."
What does 'short covering' mean?
Covering a short position means to acquiring the securities which were sold short, and returning them to the broker
What does nominal value mean?
Nominal value is the original stated value of a security or asset, before it undergoes time value calculations that may change its market value.
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What is Stagflation?
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What is a protective put?
A protective put is an option contract that hedges against losses in a long stock positio
What are the 403(b) Contribution Limits?
403(b) contribution limits are currently the same as 401(k) limits, and are adjusted for inflation at the same rate
What is the S&P 500?
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What is Earnings Season?
Earnings season describes not one, but four times in a year, when corporations release their quarterly earnings reports
What is a No-Appraisal Mortgage?
There are exceptions to this, in the form of no-appraisal mortgages which are available to lower-income homeowners