Igor

The Bahamian Dollar is the official currency of the Bahamas, given value by the nation’s central bank. The Dollar can be broken down into 100 cents, and can be symbolized as B$. Traders investing in the BSD currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

A Broadening Formation is seen when market activity is seeing relatively high levels of volatility. Sometimes called a “megaphone pattern” because of the broadening shape of the pattern, traders view this formation as an asset that lacks clear trend direction or a clearly defined trading range. In many cases, traders view these formations as a sign that trades should not be initiated until market volatility starts to calm.

The Brazilian Real is the official currency of Brazil, given value by the nation’s central bank. The Real can be broken down into 100 centavos and can be symbolized as R$. Traders investing in the BRL currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

The British Pound is the official currency of Great Britain, given value by the nation’s central bank.The Pound can be broken down into Pence, which is how the nation's stock prices are quoted. Traders investing in the GBP currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources.

The Britcoin was created as a means for lowering trading costs, and with software considerations that expand and contract the available supply of the currency that is available to open markets, inflationary pressures are kept to a minimum.

Breakouts are seen when prices trade above a significant resistance level or below a significant support level.Price movements of these types are generally used to determine whether or not a trend is reversing or in continuation.Breakout traders usually buy an asset when resistance levels are broken, while sell positions are usually triggered when prices drop below support.

The Brazilian Real is the official currency of Brazil, given value by the nation’s central bank. The Real can be broken down into 100 centavos and can be symbolized as R$.Traders investing in the BRL currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources.Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

Traders who sell index calls are betting that the market prices of the index's underlying assets will fall. The strategy involves writing a call that's linked to a stock market index. The underlying index plays the same role as an asset does in options trading. Investors settle all index options in cash and there are no assignments of assets. When traders sell index calls, they predict that the index option will expire out-of the money. The profit potential and risk involved when using this strategy varies. Traders selling index calls limited their profits to the amount that they receive in premiums when selling a call. On the contrary, the loss-risk potential is unlimited, since any stock index can rise to as much as demand permits. Moneyness Review for Calls Out-of-The Money (OTM) = Strike price (more than) Market Price In-The-Money (ITM) = Strike price (less than) Market Price At-The-Money (ATM) Strike price (equals) Market Price Understanding Index Options and Regular Options Selling an index option functions the same way as in selling a regular option. The difference is that the underlying assets associated with index options are many compared to just the one underlying asset that's associated with a regular stock option. Example: The NASDAQ is worth $4000 and its index option, NASX (Index Option), is valued at $400 (1/100 of the NASDAQ). How to Sell Index Calls (ATM) The NASDAQ is worth $4000 (market price) in June. 1) Trader sells an index call option: NASXDec400 ($4.50) - One NASDAQ index option with a contract multiplier of $100 - Strike Price $400, at-the-money (ATM), expiring in 180 days - Premium Cost of $4.50 2) Trader receives $450 for the sale (100 x $4.50 (premium cost)). Total credit to enter the market: $450 Result one: NASX rises to $420 (ITM) in December. a) The call option sold expires ITM. The buyer exercises his or her right to buy 100 shares at $40. b) The difference between the option's strike price and the NASX is $20 (NASX: $420 - strike price:$400). There is no assignment of assets, so the trader uses the contract multiplier (CM) to figure the cash settlement. c) The trader pays the buyer $2000 [100 (CM) x $20 (difference in prices)]. Adding the $450 credit received when entering the market reduces the trader's total loss to $1550. Result two: NASX falls to $380 (OTM) in December. a) The buyer lets the option expire and does not exercise the right to buy. b) The buyer loses the premiums paid to the trader to enter the market. In this example, the trader keeps the $450 credit, which is the maximum profit for this type of trade. Advantages and Disadvantages of Selling Index Calls: Pluses: The upside to selling index calls is that the trader can enter the market without paying cash. He or she receives a credit, keeping the premium when the index option expires worthless and using the credit to offset losses in a bull market. Minuses: The downside in selling index calls is that it limits a trader's profits to only the amount received when entering the market. If the market value of the underlying index bottoms out, the trader could not capitalize on the short sale. Also, the potential loss-risk in a selling call index is infinite, since any index could theoretically rise as much as its supply permits.

Traders who implement a synthetic long put strategy are betting that the market price of an option's underlying asset will fall. The technique involves short selling owned assets and selling an ATM call option, hoping that it will expire OTM. Traders who employ this type of bear option strategy pay a premium to enter the market. However, gains from their call purchase will offset any potential loss from the short sale, thus, limiting the trader's losses. On the contrary, an investor's profit potential is infinite. If the market price crashes, traders who use this strategy can earn substantial gains. Moneyness Review for Calls Out-of-The Money (OTM) = Strike price (more than) Market Price In-The-Money (ITM) = Strike price (less than) Market Price At-The-Money (ATM) Strike price (equals) Market Price How to Carry out a Synthetic Long Put Disney stock is worth $40 (market price) in June. 1) Trader short sells 100 shares of Disney stock. 2) Trader buys the call option: DISJul40($2) - 100 shares of Disney stock - Strike Price $40, at-the-money (ATM), expiring in 30 days - Premium Cost of $2 3) Trader pays a total of $200 to enter the market. [$200 (paid to purchase one call option)] Total cost to enter the market: $200 Result one: Disney stock falls (crashes) to $30 in July. a) The call option purchased expires worthless (OTM). b) The short sale realizes a $1000 gain, and the trader receives $1000. c) The trader makes a total profit of $800 after subtracting the cost to enter the market. [$800 = $1000 (gain from short sale) - $300 (to enter the market)] Result two: Disney stock rises (rallies) to $50 in July. a) The short sale realizes a $1000 loss, and the trader pays $1000. b) The call option sold expires ITM. c) The trader exercises his or her right to buy 100 shares at $40 from the person who sold the call option. The trader pays $4000 to the buyer, and receives 100 Disney shares. d) The trader immediately sells the 100 shares in the open market and receives $5000. e) The trader losses $200 after adding the cost to enter the market. [-$200 = $5000 (received for 100 shares) - $4000 (paid for 100 shares) - $1000 (loss from short sale) - $200 (cost to enter market)] Result three: Disney stock falls (moderately) to $38 in July. a) The call option purchased expires worthless (OTM). b) The short sale realizes a $200 gain, and the trader receives $200. c) The trader makes a total profit of zero after adding the cost to enter the market. [$0 = $200 (gain from short sale) - $200 (to enter the market)]. Thus, $38 serves as this strategy's breakeven point, with any market value lower than $38 resulting in profits for the trader. Advantages and Disadvantages in Carrying Out A Synthetic Long Put Pluses: The upside to this type of strategy is that investors limit their losses when things go wrong. They also enter the market knowing where their break even point stands. Finally, the synthetic long put strategy gives investors the opportunity to realize large profits at a low and limited risk. Minuses: The only downside in carrying out this strategy happens when the market rallies and the call option expires ITM. However, investors would only lose what they paid in premiums to enter the market.

A trader who implements a put backspread strategy is betting that an asset's value will fall. The technique involves selling more put options than purchased, usually 2:1, of the same underlying asset and with the same expiration. The profit potential is infinite when carrying out a put backspread, and investors control any potential losses by selling puts that satisfy the 2:1 ratio. Moneyness Review for Puts: In-The-Money (ITM) = Strike Price (more than) Market Price Out-of-The Money (OTM) = Strike Price (less than) Market Price At-The-Money (ATM) Strike Price (equals) Market Price How to Implement a Put Backspread Strategy Disney stock is worth $48 (market price) in June. 1) Trader buys two (2) put options: DISJul45($2.00) - 200 shares of Disney stock - Strike Price $45 (OTM), expiring in 30 days - Premium Cost of $2.00 2) Trader sells one (1) put option: DISJul50($4) - 100 shares of Disney stock - Strike Price $50 (ITM), expiring in 30 days - Premium Cost of $4 3) The trader pays $0 to enter the market. [$400 (paid for puts) - $400 (received from sale)] Result one: Disney stock remains at $45 in July. a) Both the put options purchased expire worthless. (OTM) b) The put option sold is ITM. The buyer exercises his or her right to sell the trader 100 shares at $50. The trader pays $5000 to the seller. c) The trader sells 100 Disney shares in the open market, receiving $4500. d) The trader loses a total of $500 after subtracting the prices paid for the shares from the share sale. [$500 = $5000 (paid for shares) - $4500 (received for shares)] Result two: Disney stock falls (moderately) to $40 in July. a) The put option sold is ITM. The buyer exercises his or her right to sell the trader 100 shares at $50. The trader pays $5000 to the seller and receives 100 shares. b) The trader buys 100 Disney shares in the open market, paying $4000. c) The two put options purchased are ITM. The trader exercises his or her right to sell the trader 200 shares at $45. The trader sells the 200 shares and receives $9000 from the buyer. d) The trader loses a total of $0 after adding and subtracting the prices paid for the shares from the exercised puts. [$0 = $5000 (paid for 100 shares) + $4000 (paid for 100 shares) - $9000 (received from puts purchased)] Result three: Disney stock falls (crashes) to $30 in July. a) The put option sold is ITM. The buyer exercises his or her right to sell the trader 100 shares at $50. The trader pays $5000 to the seller and receives 100 shares. b) The trader buys 100 Disney shares in the open market, paying $3000. c) The two put options purchased are ITM. The trader exercises his or her right to sell the trader 200 shares at $45. The trader sells the 200 shares and receives $9000 from the buyer. d) The trader loses a total of $1000 after adding and subtracting the prices paid for the shares from the exercised puts. [$1000 = $9000 (received from puts purchased) - $5000 (paid for 100 shares) - $3000 (paid for 100 shares)] Result four: Disney rallies to $50 in July. a) All the put options purchased expire worthless (OTM). b) The trader loses a total of $0 since there was no cost to enter the market. Advantages and Disadvantages of Implementing a Put Backspread Strategy: Pluses: The upside to this type of strategy is that the investor can make substantial profits with limited loss-risk. An investor's profit potential is infinite when market price crashes, since theoretically any asset can reach a zero value. Investors can also enter the market without paying cash. The put backspread also limits the trader's loss potential to the terms of the put option sold. In large market upswings, all options will expire OTM, resulting in no-loss, since there is no cost to enter the market in a 2:1 backspread. Minuses: The downside in using a put backspread strategy happens when the underlying asset's market price expires at-the money with the sold put. However, loss potential continues to decline any price in between the strike prices of puts sold and purchased

Traders who implement a protective call strategy are protecting their short sales from surprise market rallies. The protective call acts as an insurance policy from price swings on shares owed. The technique involves short selling assets and purchasing a call option for the amount of shares owned. The protective call limits the investor's loss potential to only the premiums paid when buying the call. Thus, the investor controls their loss, which is set by the terms of the call option. On the contrary, an investor's profit potential is infinite. If the market price crashes, traders who use this strategy can earn substantial gains. Moneyness Review for Calls Out-of-The Money (OTM) = Strike price (more than) Market Price In-The-Money (ITM) = Strike price (less than) Market Price At-The-Money (ATM) Strike price (equals) Market Price How to Carry Out A Protective Call Strategy Disney stock is worth $50 (market price) in June. 1) Trader short sells 100 shares of Disney stock. 2) Trader buys the call option: DISJul50($2) - 100 shares of Disney stock - Strike Price $50, at-the-money (ATM), expiring in 30 days - Premium Cost of $2 3) Trader pays $200 to enter the market and to protect the short sale. [$200 (paid for call)] Total cost to enter the market: $200 Result one: Disney stock rises (rallies) to $70 in July. a) The short sale realizes a $2000 loss, and the trader pays $2000. b) The call option expires ITM. c) The trader exercises his or her right to buy 100 shares at $50 from whoever sold the call option. The trader pays $5000 to the seller, and receives 100 Disney shares. d) The trader immediately sells the 100 shares in the open market and receives $7000. e) The trader loses $200 after adding the cost to enter the market. [$200 = $7000 (share sale) - $5000 (paid for shares) – $2000 (short sale loss) - $200 (cost to enter market)] Result two: Disney stock falls to $30 in July. a) The short sale realizes a $2000 gain, and the trader receives $2000. b) The call option purchased expires worthless (OTM). c) The trader makes a total profit of $1800 after adding the cost to enter the protective call. [$1800 = $2000 (received from short sale) - $200 (paid for protective call)] Result three: Disney stock drops (moderately) to $48 in July. a) The short sale realizes a $200 gain, and the trader receives $200. b) The call option purchased expires worthless (OTM). c) The trader makes a total profit of $0 after adding the cost to enter the protective call. [$0 = $200 (received from short sale) - $200 (paid for protective call)] **Note: In this example, Disney stock at $48 is the breakeven point in this protective call example. Any rally above $48 will result in a loss for the trader. However, the protective call caps the maximum loss at $200. Advantages and Disadvantages in Carrying Out a Protective Call Strategy Pluses: The upside to this type of strategy is that the investor can gain unlimited profits if the call option expires any price below its breakeven point. The protective call also helps investors control losses from sudden market rallies, as they predetermine their maximum loss when they enter the market. Minuses: The downside in using a protective call happens when the market rallies and the investor losses the premiums paid to purchase the call.

The Bolivian Boliviano is the official currency of Bolivia, given value by the nation’s central bank.The Boliviano can be broken down into 100 centavos. Traders investing in the BOB currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

The Brunei Dollar is the official currency of Brunei, given value by the nation’s central bank. The Dollar can be broken down into 100 sen, and can be symbolized as B$. Traders investing in the BND currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources.Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

The Bermudian Dollar is the official currency of Bermuda, given value by the nation’s central bank. The Dollar can be broken down into 100 cents, and can be symbolized as BD$. Traders investing in the BMD currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources.Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

Blocked currencies are subject to government restrictions and the value of these currencies tends to be viewed only in terms of its domestic spending power. These currencies are generally not allowed to be converted into currencies that are freely traded in currency markets.

The Bitomat was introduced to support the Polish Zloty and is deposited digitally into virtual wallets. Since all transactions are digital the Bitomat is viewed as a way of keeping trading costs low and as a way of providing constraints to inflationary pressures.

Traders who implement an out-of-the-money naked call strategy are betting that the market price of an option's underlying asset will fall. The technique involves selling an out-of-the-money call option, hoping that it will expire out-of-the money. Traders who use this type of bear option strategy do not need cash to enter the market. However, the terms of their call sale will limit their profit potential. On the contrary, an investor's loss potential is infinite. If the market price rallies, traders who use this strategy will incur large monetary losses. Moneyness Review for Calls Out-of-The Money (OTM) = Strike price (more than) Market Price In-The-Money (ITM) = Strike price (less than) Market Price At-The-Money (ATM) Strike price (equals) Market Price How to Carry Out An Out-Of-The-Money Naked Call Strategy Disney stock is worth $48 (market price) in June. 1) Trader sells the call option: DISJul50($3) - 100 shares of Disney stock - Strike Price $40, out-of-the-money (OTM), expiring in 30 days - Premium Cost of $3 3) Trader receives a $300 credit when entering the market. [$300 (received from call buyer)] Total cost to enter the market: -$300 Result one: Disney stock rises (rallies) to $68 in July. a) The call option sold expires ITM, and the investor who bought the trader's call option exercises his or her right to buy 100 shares at $50. b) The trader purchases 100 Disney shares in the open market to cover the short sale, paying $6800, and then sells the shares to the buyer, receiving $5000. c) The trader loses a total of $1500 after adding the premium credit taken when entering the market to the loss. [-$1500 = $1800 (loss from call) + $300 (credit to enter market)] Result two: Disney stock falls (crashes) to $28 in July. a) The call option sold expires worthless. (OTM) b) The trader's profits totals $300 after keeping the credit earned when entering the market. Result three: Disney stock rises (moderately) to $53 in July. a) The call option sold expires ITM, and the investor who bought the trader's call option exercises his or her right to buy 100 shares at $40. b) The trader purchases 100 Disney shares in the open market to cover the short sale, paying $5300, and then sells the shares to the buyer, receiving $5000. c) The trader loses a total of $0 after adding the premium credit taken when entering the market to the loss. [$0 = $300 (loss from call) + $300 (credit to enter market)] Advantages and Disadvantages in Carrying Out An Out-Of-The-Money Naked Call Strategy Pluses: The upside to this type of strategy is that investors do not need cash to enter the market. They are betting that the asset's market value will crash and the call will expire OTM, allowing them to keep the credit earned when entering the market. Traders can also use the credit to offset losses in moderate bull markets or to reduce total loss if the underlying asset's value rallies. Minuses: The downside in using an out-of-the-money naked call strategy is that it exposes traders to infinite potential losses when the market rallies, since any asset's market price could theoretically rise as much as demand permits. The method also limits the trader's profit potential to only the premiums that he or she receives when entering the market.

Traders who implement a long put strategy are betting that the market price of an option's underlying asset will fall significantly. The technique involves buying one or more put option. If things go wrong and the market price of the underlying asset rallies, the trader's loss-risk is limited. Unlike short selling, put buying does not limit an investor's potential profit. However, a trader does run the risk of the asset expiring worthless, if the option's strike price remains above its breakeven point. Moneyness Review for Puts Out-of-The Money (OTM) = Strike Price (less than) Market Price In-The-Money (ITM) = Strike Price (more than) Market Price At-The-Money (ATM) Strike Price (equals) Market Price How to Carry Out a Long Put Strategy Disney stock is worth $40 (market price) in June. 1) Trader buys the put option: DISJul40($2) - 100 shares of Disney stock - Strike Price $40, at-the-money (ATM), expiring in 30 days - Premium Cost of $2 2) Trader pays a total of $200 to enter the market [$200 (paid to purchase one put option)] Total cost to enter the market: $200 Result one: Disney stock falls (crashes) to $30 a) The put option bought is ITM. b) The trader buys 100 Disney shares in the open market for $3000. c) The trader exercises his or her right to sell 100 shares at $40 to the investor who wrote the put option. The trader sells 100 Disney shares and receives $4000 from the writer. d) The trader makes a total profit of $800 after subtracting the costs to enter the market. [$800 = $4000 (received for 100 shares) - $3000 (paid for 100 shares) - $200 (cost to enter market)] Result two: Disney stock rises (rallies) to $50 a) The put option bought expires worthless (OTM) b) Trader loses a total of $200 after adding the amount paid to enter the market. Result three: Disney stock falls (moderately) to $38 a) The put option bought is ITM. b) The trader buys 100 Disney shares in the open market for $3800. c) The trader exercises his or her right to sell 100 shares at $40 to the investor who wrote the put option. The trader sells 100 Disney shares and receives $4000 from the writer. d) The trader makes a total profit of $0 after subtracting the costs to enter the market. Thus, $38 would serve as the break even point in this example. [$0 = $4000 (received for 100 shares) - $3800 (paid for 100 shares) - $200 (cost to enter market)] Advantages and Disadvantages of Carrying Out a Long Put: Pluses: The upside of this type of strategy is that the investor can gain unlimited profits with limited risk. The trader knows exactly how much he or she can lose before carrying out a long put strategy. He or she also knows the strategy's breakeven point when entering the market, which is the put option's strike price subtracted from the total cost to enter the market. Minuses: The downside of using a long put strategy is that the method has a time limit to realize profits. Most put options expire in thirty days. Thus, the market value of the put option's underlying asset must fall below the strategy's breakeven point within this time limit or the option will expire worthless.

The Big Mac PPP is used my many fundamental forex traders to determine whether or not a country's is properly valued. *When using the actual exchange rate between two nations, the cost of a Big Mac is used to calculate the relative performance of the forex rate. *If the cost of a Big Mac is more expensive than the cost in the US, that currecy will be viewed as overvalued.

A Big Figure in the forex market can be seen every one hundred pips in the price movement of a currency pair. *Examples include 1.3500, 114.00, or 1.0000. *These areas often hold a great deal of psychologial significance in the market and are often used as significant support and resistance levels when prices approach these values.

The Burindi Franc is the official currency of Burundi, given value by the nation’s central bank. * The Franc can be broken down into 100centimes. Traders investing in the BIF currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. *Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

The Bahraini Dinar is the official currency of Bahrain, given value by the nation’s central bank. The Dinar can be broken down into 100 fuloos, and can be given the symbol BD. *Traders investing in the BHD currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. *Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.

The Bulgarian Lev is the official currency of Bulgaria, given value by the nation’s central bank. *Traders investing in the BGN currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. *Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions. *The currency is currently pegged to the Euro and there is a possibility that it will be replaced by the Euro in the near future. *

A Bear Trend is generally thought of as being defined by a series of lower highs and lower lows, and is indicative of intense selling pressure in a given market.

A Bear Squeeze occurs when a large number of bearish traders are forced to close out their positions so that losses do not become excessive. This reversal in position actual created upward movement because a buy position is required to close a bear position.