What Is a Bull Put Spread? A bull put spread is an options trading strategy. Investors use it when they expect a moderate rise in the price of the underlying asset. The strategy employs two put options to form a range. One sets the high strike price and the other, […]
What Does Sell To Open Mean? Sell to open is a brokerage instruction to open a short position in an options transaction. When trading options (calls or puts) there really are only two choices when placing an order. Traders can either open a position or close a position. If traders […]
What is an NSF Fee for Non-Sufficient Funds? An NSF fee describes the fee charged when a check is presented but cannot be covered by the balance in the account. The term NSF stands for non-sufficient funds or insufficient funds. It refers to the status of a checking account that […]
What Is Market Risk Premium? The market risk premium is the difference between the expected return on an investment and the risk-free rate. The market risk premium is part of the Capital Asset Pricing Model (CAPM). Analysts and investors use it to calculate the acceptable rate of return for an investment. […]
What are Common Size Financial Statements? Common size financial statements display items as a percentage of a common base figure, total sales revenue, for example. This type of financial statement allows for easy analysis between companies, or between periods, for the same company. However, if companies use different accounting methods, […]
What Is the Operating Cash Flow Ratio? The operating cash flow ratio is a measure of how well cash flows generated from a company’s operations are covering current liabilities. The ratio can reveal a company’s liquidity in the short term. Using cash flow as opposed to net income is considered […]