What are long and short positions?
Long refers to all positions in which the owner benefits from an increase in value. Short stands for positions where a decrease in value is advantageous for the holder.
What are call and put options?
Call stands for a purchase option, i.e. the right to buy something at a certain time and at a fixed price whereas put describes an option to sell, i.e. the right to sell something at a specific time and at a specified price.
What is a strike price?
The price at which a put or call option can be exercised.
What is an expiry?
The expiration date, in derivatives trading, refers to the date in which options or futures contracts expire. In other words, the expiration date is the last day that a derivative contract is valid. On the date of expiration, the derivative contract is settled between the buyer and seller.
What is leverage?
The concept of leverage is borrowing money to invest in more stock than you can afford on your own. Share market leverage can boost your return on investment, but it can also cause you to lose more money than if you bought stock with your own money.
What is a delta?
Delta is a risk metric that estimates the change in price of a derivative.
What is the size factor?
Stocks with a lower market value (mid and small caps) realize higher returns than those with a higher market value or capitalization (large caps).
What is a knockout?
A knock-out option is a derivative contract in an option, which loses its entire value if the underlying asset's price reaches a certain level and the option contract expires worthless.