2017-1-24 financial knowledge

Long & Short position

A long (or long position) is the buying of a security such as a stock, commodity or currency with the expectation the asset will rise in value.

A short, or short position, is a directional trading or investment strategy where the investor sells shares of borrowed stock in the open market.

Put & Call Option

A put option is an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.

A call option is an agreement that gives an investor the right, but not the obligation, to buy a stock, bond, commodity or other instrument at a specified price within a specified time.

Bid & Offer Price

A bid price is the price a buyer is willing to pay for a security.

An offering price is the price at which publicly issued securities are made available for purchase by the investment bank underwriting the issue. A security's offering price includes the underwriter's fee and any management fees applicable to the issue.