An issue of rights is an invitation to existing shareholders to purchase additional new shares in the company.
In the rights offering, each shareholder is entitled to a proportional distribution of additional shares at a certain price and within a certain period (usually 16 to 30 days).
Shareholders are not obliged to use this right.
Cash-strapped companies can turn to entitlement issues to raise money when they really need it.
A horizontal spread is a simultaneous long and short position in derivatives for the same underlying asset and strike price, but with different expiration dates.
Boundary conditions were used to establish the minimum and maximum possible values of call and put options prior to the introduction of binomial tree and Black-Scholes pricing models.
Deep-in-the-money options have strike prices that are significantly above or below the market price of the underlying asset and thus contain mostly intrinsic value.
Delta hedging is an options strategy that aims to be directional neutral by establishing compensating long and short positions in the same underlying asset.
The extrinsic value is the difference between the market price of an option, also known as its premium, and its intrinsic price, which is the difference between the strike price of the option and the price of the underlying asset.