Cyber*School

option strategy consisting of four options (similar to butterfly long condor: purchase of call and put out of the money (= long strangle) and sale of call und put with strikes more out of the money (= short strangle) short condor: sale of call and put out of the money (= short strangle) and purchase of call and put more out of the money (= long strangle)

confidence interval is a notion from probability. For a given confidence level, it represents an interval such a specified random variable will fall within that interval with the given level of confidence. Confidence intervals are often used to define statistical risk measures. For example, the 95% one-month value at risk (VAR) for a portfolio is just the amount of money such that there is a 95% probability that the portfolio will lose less than that amount over the next month.

Under bank regulatory regimes, firms are obligated to calculate capital requirements for an entire financial group rather than for an individual firm or business unit (see also sub-consolidation).

basis swap in which one variable interest rate is a short-term one e.g. 6-months LIBOR and the other is a long-term e.g. 5-years IRS-rate. Depending on the shape of the interest rate curve the long-term interest rate is quoted at premium (if yield curve is inverse) or at a discount (if yield curve is normal).

Law for the protection of consumers. This Act shall usually be applicable if a lay person acquires something from an expert. E.g. A customer buys securities from a financial services provider.

Contango is a market condition where forward rates exceed spot rates. The term is common in commodity markets and corresponds with the term premium in FX-markets. In the energy markets, the prevailing condition may reflect supply and demand. For example, if the crude oil market is contango, it may indicate a glut of immediately available supply. Backwardation is the opposite.

A security similar to a traditional convertible bond in respect of there is a strike price (the cost of the stock when the bond converts into stock). What differs is the price, even higher than the strike price, which the company's stock price must reach before an investor has the right to make that conversion (known as the "upside contingency"). Issuing contingent bonds is more advantageous to companies than issuing regular convertibles. Until an investor exercises the option, the company does not need to count shares in its calculation of diluted earnings.

see option transaction

Continuous fulfillment of all orders that match price and quantity. i.e. during the entire trading time orders can be granted and transactions can be completed.

Term for the termination unit prescribed in the forward markets for options and futures transactions.

An arrangement made in a futures contract whereby differences in settlement are made through cash payments, rather than the delivery of physical goods or securities. This is generally an easier method of settlement because losses and gains are paid in cash. CFDs provide investors with the all the benefits and risks of owning a security without actually owning it. Trading with CFDs as an alternative to actual trading with the underlying basic values become increasingly popular.

The minimum size prescribed for an option contract. The contract size from stocks traded on the Vienna Stock Exchange stock options is 50 pieces of the underlying. For options on the ATX 100 index points are the minimum size.

The contract specifications define the contractual arrangements of futures and options (in terms of underlying, maturity, strike price, contract size, delivery, etc.).

The contract value of a forward contract describes the actual underlying values. The contract value is calculated as follows: Number of contracts multiplied by the contract size and the price of the underlying.

Number of contracts traded.

A positive contribution covers all direct costs (centralized and decentralized).

Conversion of a debt security into a new one with modified conditions.

Factor, which will be announced for each deliverable bond and the conversion of the bond's price on the ideal type of the underlying and vice versa is used.

This refers to the corrected conversion price using the current bond price.

Upon exercise of the conversion the executing participant is obliged to pay a premium. (conversion premium)