RISK-FREE RATE - The term used to describe the prevailing rate of interest for securities issued by the government of the country of the currency concerned. It is used in the pricing models.
ROLLOVER - Moving a position from one expiration date to another further into the future. As the front
month approaches expiration, traders wishing to maintain their positions will often move them to the next contract month. This is accomplished by a simultaneous sale of one and purchase of the other.
ROUND TURN - When an option contract is bought and then sold (or sold and then bought. The
second trade cancels the first, leaving only a profit or loss. This process is referred to as around turn. Brokerage charges are usually quoted on this basis.
SHORT - An obligation to purchase an asset at sometime in the future. You are short if you have sold more than you have bought
in any particular market,
commodity,
instrument, or contract. Also known as having a short position. An asset is sold short with the expectation of a decline in its price. Can have almost unlimited risk. Uncovered short positions require margin.
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