DSIJ Mindshare

You can determine a company’s value (and also, the value of its stock) in many ways. The most basic way is to look at the company’s market value, also known as market capitalisation (or market cap).

There are ample ways in which investors can be classified. The most common ones are based on the amount of time an investor is willing to commit, the amount of risk one is will to bear and also, on the philosophy, which an individual chooses to follow.

Liquidity is simply a company’s ability to meet obligations on time. Liquidity is important because it sustains the ability of an enterprise to meet its obligations in a timely manner. 

When you open an option position, you have two choices: Buy it or sell it. The actual orders used would rather be ‘buy to open’ or ‘sell to open’. Once you are long or short of an option, there are a number of things you can do to close the position.

The relationship between the spot price of the underlying and the strike price is described by the moneyness of an option.