What is the possibility of a scream?
The possibility of screaming is the type of investment that provides the investor a certain level of warranty. The investor may shout at different points before the investment injury and block any current profit to protect from possible losses. Because of this possibility, the possibility of cries is generally used for investment opportunities that are considered high risk.
The investor can also apply a scream to make further regulations of the investment before it reaches maturity. For example, the possibility can reset the price of a strike or exercise investment and change the amount of money that the investor can charge for the sale of a financial instrument once the investment has reached maturity. The scream can even allow the investor to change the time before the investment achieves maturity.
Both parties, investor and party looking for investment funds, agree to the conditions of the scream to establish an investment opportunity. All shout conditions, including the TimeVestor, may decide to apply its possibility of scream and at what time it is in detail to POPs in detailana in an investment agreement. The rules governing the use of shouts before the investment can be either little and simple, or much and very complex.
In many cases, she has shouted the possibility of cries to investors and at the same time increases the risks she has invested. In the event that the basic asset or financial instrument supporting the investment, they notice a reduction in value from the beginning of the investment after the investment maturity, the investor may use a cry. However, an investment or party that originally offered an investment opportunity will lose money in such a transaction.
The cost of the crushing option is more than for the traditional option. Increase in price is higher if the investment is perceived as volatile, because such an investment is likely to provoke investors to apply the possibility of screaming. Of course, this means that investors are likely to make a profit from the investment than if they had no shout. Other cries for youThe investment further increases the costs of investment.
According to the definition, the possibility of shout is classified as an exotic option. Unlike US or European options that have direct investment contracts, they may have exotic possibilities of complex contractual terms that change on the basis of multiple variables. Given their complex contracts, shouts and other exotic possibilities do not deal with the stock exchange, such as the New York Stock Exchange, but instead trades on the market on the market like Nasdaq.