In finance, the degree of money (moneyness) is a measure of the degree to which a financial derivative is likely to have a positive value at its expiration date. An option is at-the-money if the exercise price (strike price), ie the price that the owner must pay to exercise the right, is the same as the price of the underlying asset on which the option is based.
This type of strategy is characterized by a very low correlation with other types – most of the strategies depend on some common factors, the strategies that are neutral to the market. On the contrary, market-neutral strategies are allocated separately from the common components according to the Best Forex Hosting market participants.
One option is out-of-the -money if no intrinsic value, it would be the case of a call option (call) for which the underlying asset price is less than the exercise price of the option. One option in-the-money, however, has intrinsic value, for example in the case of an option to purchase the underlying asset price is greater than the exercise price of the option.
Noting the formula can be concluded that the degree of money is zero when the derivative and the underlying are the same price after deducting the risk. It will have a postive value in the options in the money and a negative value in the options out of the money.
Collective investment vehicle that is privately organized, administered by professional societies (investment banks or fund managers ) who charge commissions on results and not available to the general public as it requires minimum investment amount too high. They pursue absolute returns rather than relative returns based on a benchmark.
They use no financial investment techniques permitted for traditional funds: short selling or short-selling (shorting: bet on future stock price declines). Use of derivatives (credit default swap (CDS ) or certain defaults; swaps, futures contract, financial options) and purchase of securities by aggressive leverage on the Best Forex Hosting .
Subject to limited reporting requirements and should not provide liquidity on a daily basis. Already in 2007 the size or volume of funds managed by hedge funds was huge, which meant that any decision to purchase or sell off just affecting the stock market, currency or bonds. In summer 2007, hedge funds began to sell shares in bulk, possibly caused the surprising collapse of stock markets in August 2007. Analyzing sales volumes in late 2007 could be said also that were clearly hedge funds who initiated the stock market declines of 2008.
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