Trading Basics
Deep Out of the Money
In options trading, this means when the strike price is the wrong side of the current price and a long way from it. The option is out the money and there is little chance of it being in the money.
Other Trading Basics
Credit Rating
An entities perceived ability to repay its debt. Provided by credit rating agencies. AAA is the best credit rating.
Backwardation
Backwardation occurs when a bid price exceeds the ask price.
This usually occurs when stock is suspended or under a share repurchase scheme.
It can also mean that a futures contract will trade at a higher price when it is coming close to expiring.
The opposite of backwardation is known as contango.
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