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Position diagram |
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Position diagramDiagram showing the possible payoffs from a derivative investment.Position diagram Similar MatchesModigliani and Miller Proposition IModigliani and Miller Proposition IA proposition by Modigliani and Miller which states that a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. Also called the irrelevance proposition. Discretionary PropositionDiscretionary PropositionA proposal on a proxy card that brokers can cast in favor of management if they have not yet heard from the beneficial holder ten days before the annual meeting. See: Ten-Day Rule Synthetic positionSynthetic positionA hedging strategy combining futures and futures options for price protection and increased profit potential. For example, by buying a put option and selling (writing) a call option, a trader can construct a position that is similar to a short futures position. This position is known as a synthetic short futures position, and shows a profit if the futures prices decline, and receives margin calls if prices rise. Synthetic positions are a form of arbitrage. Net positionNet positionThe value of the position subtracting the initial cost of setting up the position. For example, if 100 options where purchased for $1 each and the option is currently trading for $9, the value of the net position is $900 - $100 = $800. Clear a positionClear a positionTo eliminate a long or short position, leaving no ownership or obligation. Further SuggestionsTake a positionCovered position Disposition of Real Estate Statement Interpositioning long position Short position Spread position Positioning position limit Foreign asset position Core propositions Heckscher-Ohlin Core Propositions Miller and Modiglianis irrelevance proposition Covered position Equilibrium position Position sheet Net foreign asset position Long position Long position in an option Open position Position limits Synthetic forward position Open position Position trader Welfare proposition |
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