Trading

Trading¶

Arbitrage: purchasing an asset from one market and selling it to another market

Derivatives: The bigger grouping of Futures and Options

Futures: Contract between buyer and seller to sell a stock at a specific price in the future

Call Option: gives the holder the right to buy crypto at a predetermined price. Good if you think the price will increase

Put: gives the holder the right to sell crypto at a predetermined price. Good if you think the price will decrease

Perpetual Futures: A futures contract without an expiration date

Limit Order: order to buy or sell a stock at or below a specific price

Margin: margin is when investors borrow money from a broker to purchase a stock

Spot Trading: buying a specific asset at the immediate market price

Covered Called: If you own the stock and make a Call option on that stock that others can buy. You make money when you get the call premium from the person who bought the call option and then the stock did not gain in enough price to make the call option worth it. You gain Dividend on the stock that you own, Gain in in small stock rises, Call option preimums