Equities
OMFinancial gives access to major international equities markets. Your client advisor will assist you to understand the outlook for a wide range of sectors, stocks and investment strategies. They can guide you to build a portfolio which is appropriate for your investment objectives, financial situation and particular needs and will facilitate the execution of transactions. Trade the biggest options markets on the planet!
An option is a contract giving the buyer the right, but not the obligation, to buy or sell an underlying security (a share, currency, or futures contract) at a specific price on or before a certain date. An option is a security, just like a stock or bond, and constitutes a binding contract with strictly defined terms and properties.
The definition of a Contract for Difference is an agreement (made between two parties) to exchange, at the closing of the contract, the difference between the opening and closing prices, multiplied by the number of shares detailed in the contract.
An ETF is a share traded on the stock exchange, but the value of the share is designed to directly reflect the price of another instrument or index. The ETF is normally compiled by purchasing a basket of securities in accordance with their index weighting.
Physical equities are often referred to as shares or stock. A share provides the investor with part ownership of the company and ownership conveys the right to vote in board elections as well as the ability to participate in the distribution of profits (by way of dividends). The motivation for investing in stocks can be two fold in that it may be a passive long term buy and hold strategy or a more active trading approach.
Most of the registers these days are electronically administered so holders of stocks no longer receive a share certificate. The benefit of the electronic system is that shares can be transacted on a more timely basis rather than awaiting the arrival of the physical pieces of paper.
At the Money, In the Money, Out of the Money
There are three different terms for describing where an option is trading in relation to the price of the underlying security. These terms are ‘at the money’, ‘in the money’ and ‘out of the money’.
If XYZ stock is trading at a price of 100, the November 100 call is considered to be trading ‘at the money’. If XYZ stock is trading at a price greater than 100, say 102, the call option is considered to be ‘in the money’. An if XYZ is trading at a price less than 100, say 98, the call option is considered to be trading ‘out of the money’. Conversely, if it was an XYZ November 100 put option and if the price of XYZ stock was 102, the put option would be considered to be ‘out of the money’. And if XYZ stock was trading at a price of 98, the put option would be considered to be trading ‘in the money’. If XYZ stock was again trading at 100, the put option would be ‘at the money’.
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