Abbreviation for the German stock index (Deutscher Aktienindex). The DAX consists of 30 shares of German companies.
A day trader tries to profit from short term fluctuations in the stock market or in individual stocks within one day. Day traders sell (liquidate) all their positions at the end of each day.
Delta is one of the dynamic coefficients related to derivatives. The delta of an option indicates how sharply the option’s value in absolute terms changes when the price of the underlying moves by one monetary unit. At the same time the exchange ratio must be taken into account if it is not equal to 1. Whereas the delta for call options is between 0 and 1, for put options it is between -1 and 0.
Positions are, where possible, combined in such a way that a charge in the price of the underlying does not result in any immediate change in the portfolio’s value. This succeeds when the portfolio is kept delta-neutral by means of delta hedging.
Artificially created financial instrument whose value can be derived from the price of one or more underlying assets. A derivative is created by contractual agreement between two parties. Warrants and structured products count among the securitized derivatives. As securities they are more accessible to private investors than unsecuritized derivatives such as futures or options.
Here, unsecuritized derivatives are traded, including in particular options and futures. One of the world’s best-known derivatives exchanges is EUREX.
Difference to barrier
Determines the risk buffer against an option’s premature expiry. The closer the underlying’s price to the barrier, the greater the risk of losing the conditional capital protection or the possibility of participating in falling prices.
Difference to stop-loss
Found in mini-futures and, like the financing level, adjusted at periodic intervals. If the stop-loss level is touched or breached, the product expires prematurely. Unlike the knock-out, the position is liquidated, whereby a residual amount is paid out. The difference to stop-loss determines the risk buffer against the mini-future’s early expiry.
Difference to strike
Allows estimation of the gap between the underlying’s price and the exercise price of the option on which the product is based.
The price reduction compared with a direct investment in the underlying.
Here the underlying assets are rearranged based on the investment manager’s assessment of the market.
The distribution of wealth among various investment objects with the aim of decreasing the portfolio’s overall risk.
Down and in call
Call option that is activated only after the lower barrier is touched or breached.
Down and in put
Put option that is activated only after the lower barrier is touched or breached.
Down and out call
Call option that immediately becomes worthless if the lower barrier is touched or breached.
Down and out put
Put option that immediately becomes worthless if the lower barrier is touched or breached.
Coefficient for a bond’s sensitivity to changes in the interest rate. Duration represents the average period of capital commitment of a fixed-interest security. A zero bond’s duration corresponds to its term.
Unlike static strategies, with dynamic strategies the composition or weighting of the underlyings change. A distinction is made between rule-based and discretionary strategies.