The strategy of a Butterfly is used in a poorly volatile market. The underlying fact in the absence of volatility allows you to get the maximum pay-off ( the profit of the strategy ) , which is reached when the strike price.

The butterfly produces a limited loss equal to the cost of the strategy (in fact the person who puts into practice the Butterfly pay for the purchase of two call options and receives an award for the sale of two call options, the difference determines the cost of the operation).

A butterfly (short) has the same characteristics of a butterfly (long), but it is built with a composition of call or put options symmetrical to long. If we build a butterfly short call options with it.

Although the graph is symmetrical to that seen for the butterfly long and one can easily deduce that this strategy aims to gain ( positive payoff ) by an increase in volatility, however, the gain is limited in the case of large movement in the Crypto Margin Trading market.

The call or the call option is a contract that allows the holder to purchase a financial instrument concerned, then called underlying at a price fixed in advance (exercise price, also called strike) and a specific date called maturity date of the call.

There is a European call if the purchaser can exercise his right only to the date of maturity and an American call if he can exercise at any time before the maturity date. The Bermuda call may be exercised at several pre-defined periods between the issue date and the maturity date of the option.

The primary purpose of these options is to protect against the rising price of the underlying. For example, an airline buys a call whose underlying is kerosene which protects against a rise above the exercise price and thus to ensure maximum supply price. The call therefore acts as insurance. This purchase in Crypto Margin Trading is known to provide real security.

The purchase of call options also allows the buyer to speculate on rising underlying, limiting risk, since only the premium is engaged. In contrast, the speculator who wants to sell a call option believes that the price of the underlying will not rise above the exercise price at the horizon of the due date.

Finally, the purchase or sale of an option, call or put, is a way to speculate on the volatility of the underlying: the buyer believes that it will go up, and , conversely, the seller anticipates a decline.

A stock index or stock market index is an index used to measure the progress of a selected number of shares. If the index rises, it means that the total value of all the underlying shares has increased.

The main difference between the price index and the return index. The former index type reflects the price performance of the underlying shares, while the latter also includes the shares’ dividend to reflect the actual rate of return that the investor receives. Most indices are capitalization-weighted, ie, the larger the market capitalization of a company, the greater the weight gets it in the index. There is also the underlying index in some indexes, such as list indices and sector indices.

Graphical analysis includes all studies or tools that are applied directly to the graph of the price without the need for quantitative analysis. A support level is below the current price, where demand will exceed supply, and therefore the price will start to rise again. Graphically, it is represented by a horizontal line below the current price which is expected to contain any bearish momentum, and therefore the price rise.

A resistor is the opposite concept to a support : a level above the current price where supply is expected to exceed demand, and therefore prices to fall. Graphically, it is a horizontal line above the current price level which should contain any upward momentum.

A trend is the general direction of the peaks and valleys that reflects price action on the chart. It is the life cycle of a company in which its growth is much faster than the economy as a whole to find the value of any non-constant growth stock when the growth rate is stabilized through.

Tracking stock

Tracking stock are stocks that relate only to a particular division of a company. The owner of this usually listed shares have the same rights as the holders of other shares but they all relate to a business.

The owners of the tracking stock are shareholders of the parent company, subsidiaries, or a second generation company meaning their economic destiny is likely to be closely linked to the issuer – for example, in case of imminent insolvency. The individual rights of the owners partially deviate from each other, usually tracking stock are equipped with profit participation rights that reflect the earnings generated in the specified areas.

To give the correct dividends to shareholders, a separate accounting is required. However, the management remains the same. If the shares of the combined company listed on the Kenya Stock Market are undervalued, then tracking stocks can emit a successful business unit or a subsidiary to acquire more equity.