Question

Financial Derivatives: what are the three types of speculators ? how does each type of speculator...

Financial Derivatives:

what are the three types of speculators ? how does each type of speculator differ in terms of the way they trade or strategies they use?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Types of speculators:

  • Bulls : these kinds of speculators expect the price to rise.So, these kinds of speculators always enter into a purchase transaction and sell the stock at a profit in case the prices rise without taking the actual delivery of stocks. The bull traders execute a price rigging strategy.
  • Bear: The bear is a pessimistic trader, he expects the prices to fall. If the prices really fall, then the trader earns the difference.
  • Stag: A stag is a cautious investor as they subscribe for the shares of companies which are not yet listed. To earn a profit if the shares are trading on a premium after they receive their allotment.

Speculators simply earn the difference in the prices of the shares and do not take actual delivery.

Strategies by trader used are:

Bulls adopt call option strategy and bear adopt bear strategies.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Define what is meant by the term financial derivative and list the three classes of derivatives...
Define what is meant by the term financial derivative and list the three classes of derivatives discussed in class. Provide an example of each type of derivative listed and discuss how the particular derivative works generally.
In Financial Derivatives: Explain the practical issues and difficulties when using Gamma, Delta and Vega and...
In Financial Derivatives: Explain the practical issues and difficulties when using Gamma, Delta and Vega and why they are an important source of information to both an option’s speculator and an option’s market maker, who (each) trade many options, written on different underlying assets. (You may use illustrative equations and numbers in your answer).
1. Name the three types of financial management decisions? For each type give an example of...
1. Name the three types of financial management decisions? For each type give an example of a typical business transaction.
What are the three types of large-scale precipitation? How does each occur?
What are the three types of large-scale precipitation? How does each occur?
What are the two types of cell division? How does each type affect individual genetic variation?
What are the two types of cell division? How does each type affect individual genetic variation?
1. How does the degree of liquidity risk differ for different types of financial institutions?
1. How does the degree of liquidity risk differ for different types of financial institutions?
List the three types of unemployment and explain what causes each type.
List the three types of unemployment and explain what causes each type.
What are the three types of RNA and how do those types differ? How do they...
What are the three types of RNA and how do those types differ? How do they differ in prokaryotes versus eukaryotes? What role do these different RNAs play in translation
(15 pts) What are the three types of merger? For each type, define such, and give...
(15 pts) What are the three types of merger? For each type, define such, and give one reason or justification for that type of merger.
What type of radiation is used in radar, and how does it compare to other types...
What type of radiation is used in radar, and how does it compare to other types of radiation? Why is this type of radiation better than others in radar imaging?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT