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Binary Option – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Binary Option?This is a financial derivative which has a fixed payout if an option expires in the money and the risk of losing all the money invested in the option if it expires out of the money. Since it is called a binary option, its success depends on a...

Buy Limit Order – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Buy Limit Order?A buy limit order refers to a security purchase order within a specified price, enabling investors to select their preferred transaction price. A buy limit order enables investors to pay the specified price or even less. Although the security...

Buying on Margin – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Buying On Margin?Buying on margin involves purchasing an asset using leverage and getting a broker or bank to fund the balance. It refers to the down payment that an investor makes to a broker for the asset purchased i.e. 90% financed and 10% down payment. Two...

Backwardation – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Backwardation?This relates to the price of a futures contract as it nears expiration. A futures contract usually trades at a higher price when it nears expiration than when it is further away. This is as a result of the spot price being above the futures price...

Bond Market – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Bond Market?A bond market is a place where debt securities are traded. This market includes government-issued securities as well as corporate debt securities. It enables the transfer of capital from savers or investors to the issuers who need the capital for...

Broker Dealer – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Broker-Dealer?A broker-dealer is a person or a company buying and selling securities for their account or their customers. In US securities regulation parlance, broker-dealers are known as stockbrokers since a majority of them act as agents and also...
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