In a financial sense, obligations are any outstanding debts or payment commitments someone has made. Obligation is a very broad term that encompasses bank loans, bonds, mortgages, credit card debt, money itself (an obligation to be credited with the value of the note or coin), and many other forms of liabilities.
Oil trading is the buying and selling of oil or oil-based financial instruments in order to make a profit. Few oil traders actually trade in the physical commodity itself; rather, they gain exposure to oil through derivatives like contracts for difference (CFDs), options, and futures.
An oil future, for example, is an agreement to sell a set amount of oil at a fixed price on a given date in the future. Most traders who buy oil futures sell them before they expire so they avoid having to deal with the commodity itself. But the price of futures moves with the price of oil itself, allowing traders to profit from these movements.
The prices of commodities like oil are often very volatile, providing ample opportunities for traders to profit (or incur losses) from swings.
Online banking refers to banking services that are carried out remotely using home banking web platforms or mobile banking apps. These services, also called web banking or internet banking, allow a range of banking transactions to be carried out digitally, such as online transfers or web-based utility bill payments.
Through online banking, you don’t need to go to a bank branch to make a transaction, you can do everything remotely from anywhere and at any time, 24 hours a day. To use online banking, all you need is an internet connection and a connected electronic device, such as a notebook, desktop PC or smartphone. Online banking services are more convenient than traditional methods, with reduced costs and increased ease-of-use.
An option is a financial arrangement under which someone has a right (but not an obligation) to buy or sell an underlying asset (a commodity, security, or currency) at a certain price and on a certain date. Options are divided into call options (the right to buy an asset) and put options (the right to sell an asset).
For example, an investor might purchase a 3-month call option on stock in Company A at a strike price of $1000 and with a premium of $20. After three months, the stock is worth $1100, and the investor exercises the call option and takes delivery of the stock. The investor’s profit is the current value of the stock minus the strike price and premium ($1100-$1000-$20), or $80. Options traders usually sell options at their market price before they expire, thus cashing in on price changes but avoiding having to handle the underlying asset.
Options on futures
Options on futures, also referred to as futures options, are a right but not an obligation to buy or sell futures contracts on a certain date for a pre-established price. Like any other options, futures are divided into calls and puts. Options are less risky and less volatile than trading directly in futures contracts. Since futures themselves are derivative instruments, which means they are based on the value of an underlying asset and are not the asset itself, options on futures are second derivatives, adding an additional degree of complexity.
An order is a request to trade a financial instrument. It is an instruction that a trader or investor gives to a bank or broker to buy or sell a particular security. In the past, orders were placed in person or over the phone, whereas today they are placed online via modern desktop, web and mobile investment platforms.
There are different categories of orders.
A market order is an instruction to a broker to make a sale or purchase at the best possible price. A stop order is an instruction to the broker to sell a financial instrument if the price falls below a certain threshold. A limit order is an instruction to buy or sell an asset at a certain price or better value. Orders also help to manage risk by setting automatic orders to buy or sell assets.
OTC trading stands for over-the-counter trading, which is a system where securities are exchanged directly through broker/dealer networks without being channelled through an official exchange that supervises the transaction, a method known as exchange trading. OTC trading is also known as off-exchange trading.
Securities that trade over-the-counter include stocks of small companies that do not meet the requirements to be listed on an exchange, as well as bonds, which are issued directly by corporations or government institutions. Some investors view OTC trading as risky. The OTC market gives smaller firms access to financing they would not be able to achieve otherwise.