Trading Basics
American Option
An option that can get exercised at any time during its life.
European options can only be exercised at the end.
Other Trading Basics
Bear Market
A Bear Market occurs when the price of a security is falling, and the negative outlook of the security causes the security’s price to continue to fall, causing a self-sustaining problem.
For a downturn like this to be officially considered a bear market, it must be on-going for longer than two months, otherwise it is known as a correction.
Bears are generally traders with a pessimistic view on markets that look to profit from a decline in prices.
Contango
This is when the futures price of a security is above the cash price at maturity. The opposite is backwardation.
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Learn the skills needed to trade the markets on our Trading for Beginners course.
