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call option
A call option, often simply labeled a "call", is a financial contract between two parties,
the buyer and the seller of this type of option.[1] The buyer of the call option has the right,
but not the obligation to buy an agreed quantity of a particular commodity or financial
instrument (the underlying) from the seller of the option at a certain time (the expiration
date) for a certain price (the strike price). The seller (or "writer") is obligated to sell the
commodity or financial instrument should the buyer so decide. The buyer pays a fee
(called a premium) for this right.
Put option
A "put" or "put option" is an option to sell an item at a preset price at some time in the
future. It is a contract between two parties where one party (the buyer of the put) has the
option, but not the obligation, to sell an item, typically a commodity or financial
instrument such as a stock, to the other party (the seller of the put) at future date and at a
predetermined price (the strike price) lower than the current market price
Open-end funds
Open-end mutual funds must be willing to buy back their shares from their investors at
the end of every business day at the net asset value computed that day. Most open-end
funds also sell shares to the public every business day; these shares are also priced at net
asset value. A professional investment manager oversees the portfolio, buying and selling
securities as appropriate.
[edit] Closed-end funds
Closed-end funds generally issue shares to the public only once, when they are created
through an initial public offering. Their shares are then listed for trading on an exchange.
Investors who no longer wish to invest in the fund cannot sell their shares back to the
fund (as they can with an open-end fund). Instead, they must sell their shares to another
investor in the market; the price they receive may be significantly different from net asset
value. It may be at a "premium" to net asset value (meaning that it is higher than net asset
value) or, more commonly, at a "discount" to net asset value (meaning that it is lower
than net asset value). A professional investment manager oversees the portfolio, buying
and selling securities as appropriate.