a call option whose strike price is below the current market price of the underlying security or a put option whose strike price is above the current market price of the security. an in the money option has intrinsic value.
a legal agreement designed to compensate an individual for loss or damage incurred by another.
a grouping of shares that gives a measure of price movement, used to gauge the overall health of the market.
exploiting the difference between a derivatives market and its physical market equivalent by selling one instrument and buying the other, such as buying the shares that comprise an index and selling futures contracts to an equal dollar value. often called program trading.
a passively managed portfolio of securities that tries to mirror the performance of a nominated market index, eg. an equity index fund may be designed to track the philippine stock exchange index (psei). trading decisions of such funds are generally automatic and infrequent so expenses tend to be lower than those of actively managed funds.
an option whose underlying security is an index.
the overall general increase in the level of prices of goods and services in the economy, usually measured by examining a basket of goods and services (eg. the consumer price index).
an investment whose value should increase in a time of rising inflation to protect the investor.
the basic physical facilities and services required by the country’s population including roads, utilities, water supply, sewage and telecommunications.
the first sale of stock of a company to the public.
a day where the price range of a security is within the previous day’s price range; ie a higher low and a lower high
illegally trading on information not available to the general public.
being unable to meet debt obligations as they fall due, owing to an excess of liabilities over assets.
an entity with large amounts of its own assets, or assets held in trust by it for others, to invest. examples are investment funds, insurance companies, and banks. institutional investors account for a large portion of market volume and exert an increasing amount of influence on the market.
these are futures contracts and transferable agreements whose underlying security is a debt obligation.
the actual money value of a security, as opposed to its market price or book value. also, the amount by which an option exercise price is in the money, calculated by taking the difference between the strike price and the current market price of the underlying security.
a situation showing lower yields for long-term interest rates than for short-term interest rates. also called negative yield curve.