Cash. It’s what your uncle stashes in his walls because he doesn’t trust banks. He also believes that the Illuminati are influencing your music taste and are constantly spying on him from the local water tower. Remember, the eyeball hovering on the back of the Dollar Bill is always watching...
Cash has many other uses aside from becoming kindling in your uncle’s walls. You can use some money to settle options trades depending on the type of contract you hold. A cash-settled option does not require you to take or offer delivery of a physical commodity or related underlying asset. You can just settle the payment in straight cash.
If your contacts go up in value, you receive the difference between what you paid for them and what you sold them for. If they fall in price, you would owe the difference.
Some people claim cash-settled options avoid the need to pay transportation fees or other associated transaction costs. But let’s be serious…if you are using cash-settled options, you were just betting on the rise and fall of the asset price against a counterparty.
There’s a reason they call the stock market the World’s Largest Casino.
Related or Semi-related Video
Finance: What is an Annualized Return?36 Views
Finance, a la shmoop. What is an annualized return? Alright people, well
when you invest a dollar you hope or even expect to get more than a dollar [ATM machine]
back, at some point. And let's say you invested that dollar in Terminators
Closet -a leading dealer in cybernetic body enhancements. And it went from $1 a
share to a dollar ten six months later. Alright, nice return.
You made 10% in just six months but in most investing discussions ,investment [spreadsheet shown]
returns are discussed in the form of annual returns, not monthly or daily or
biannual numbers, so you need to convert your six-month return into an annualized [angelic glow]
one, and you can do the process here of computing that number that is if you made
10% in six months well then in a year presumably you could notion that you'd
have made 20%. It's not that you would have guaranteedly made 20% it's just [spreadsheet shown]
the math saying that well if you had compounded at that rate then you'd have
made 20%, so what if she made 10% in a month? Well the stock went from a buck a
share Jan 1 to a buck ten a share by Feb 1 .Well if you impute so that you can [calendar shown]
compute that month's gain of 10% would carry a compound rate of a hundred
twenty percent. Right ? You're multiplying 12 months times 10 there, that'd be
annualizing it meaning, that at that rate you are more than doubling your money on [spreadsheet shown]
an annualized return basis. And that's more than enough dough to keep
terminators closet popping out those Wi-Fi enabled contact lenses faster than [woman watches TV]
people can wear them.
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