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Finance GlossaryButterfly Spread
Butterfly Spread
Definition of Butterfly Spread
A butterfly spread is an options strategy that combines bull and bear spreads to generate a small chunk of profit. To achieve this, a butterfly strategy consists of four positions in four options contracts that have the same expiration but different strike prices.
Related Terms
Income Stocks
Income stocks are shares of companies that help you earn a steady income, typically in the form of dividend payouts. At the same time, income stocks are known to have lower risk compared to others and thus, relatively decent returns over a period of time. But the consistently growing dividend yield makes up for the perceived lack of returns.
Book Building
Book building is the process of determining the potential issue price of a financial instrument based on investor demand, generally during an IPO.
Book building is typically done by an underwriter (like an investment bank) who will invite institutional investors like hedge funds, mutual funds, and others to submit bids for the financial instrument.
These bids act as a range that the underwriter can use to fix a price that satisfies the company issuing the security and market participants.
Book building is typically done by an underwriter (like an investment bank) who will invite institutional investors like hedge funds, mutual funds, and others to submit bids for the financial instrument.
These bids act as a range that the underwriter can use to fix a price that satisfies the company issuing the security and market participants.
Bullion
Bullion is used to refer to gold, silver, and other non-ferrous metals that have been designed to have high purity. These metals are generally molded into bars, coins, and other valuable items.
Short Squeeze
A short squeeze takes place when the price of a stock rises sharply, which forces short sellers to buy the shares to keep losses low. This sudden buying results in more upward pressure. This pushes the prices even higher. Often, short squeezes occur in stocks that are heavily shorted, and can lead to volatile price movements.
Free Float Market Capitalization
Full market capitalization is the market value of the total shares outstanding issued by a company, including public and private stock. This includes stock that’s locked-in and unexercised. That’s why full market capitalization is also referred to as total market capitalization.
Quarterly Results
Quarterly Results refer to the financial statements released by publicly listed companies every three months, covering a specific quarter of the fiscal year. These reports include income statements, balance sheets, cash flow statements, and key metrics like revenue, net profit, earnings per share (EPS), expenses, etc. They offer investors and analysts a snapshot of operational performance, growth trends, and future guidance, enabling better assessment of the company’s financial health and strategic direction compared to annual reports.
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