Call
A contract that gives a person an option to buy at a specific price within a specific period of time.
(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)
Amanda Stanhaus
Tag: option
January 14, 2014
Derivative
A contract (really a bet) on an underlying security. Its price is derived from the underlying security. Futures and options are derivatives.
(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)
November 30, 2013
Individual Retirement Account
A way to invest/save for retirement. All taxpayers welcome. Especially a great option for those who do not have a 401 (k) offered through work. Variations include the Traditional IRA and the Roth IRA.
(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)
November 7, 2013
Dollar Cost Averaging
Usually, I like to stand out, not fit in. But there is an exception.
Dollar cost averaging is the one scenario where I like to be average.
(click on the bold-faced vocab words:))
Remember how I have 10% of my income automatically invested. That’s dollar cost averaging.
Each paycheck is the same amount (but I would like it to be more), therefore the amount invested is consistent.
The # of mutual fund shares I buy is determined by the price of the shares and the investment amount.
Since the investment amount is consistent, I automatically buy more shares when the price is low and less shares when the price is high.
It’s really what I’m supposed to do anyway. With this system there is no room for human error. I don’t have an option to get too excited and buy more of the rising stock. Whew, dodged that bullet.
I approve of being average, only when dollar cost averaging.
(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)
November 2, 2013
Option
The purchaser may want to buy/sell a security at a certain price. Just like when my friend says maybe to plans, she wants to keep her options open for the best deal. P.S. She maybe isn’t my friend.
(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)
October 25, 2013
Premium
The amount paid for an option.
(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)
