If the stock price(spot Price,S) at expiration is above the exercise price(X) by more than the premium (price) paid P, he will profit i.e.

If the stock price at expiration is below the exercise price by more than the premium paid, he will profit.

Net settlement system ( NSS ) a funds transfer system , the settlement operations of which are completed on a bilateral or multilateral net basis .

The labour force comprises both employed and unemployed persons . Leading indicators economic variables which anticipate or contain useful information for predicting future developments in other variables .

Long call A trader who believes that a stock's price will increase might buy the right to purchase the stock (a call option) at a fixed price, rather than just purchase the stock itself.

Repo operation a liquidity providing reverse transaction based on a repurchase agreement .

Repurchase price the price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement .

Net external assets of the MFI sector external assets held by euro area monetary financial institutions ( MFIs ) minus external liabilities of the euro area MFI sector . External assets held by euro area MFIs mainly include gold , holdings of non euro banknotes , holdings of securities issued by non euro area residents and loans granted to non euro area residents ( including deposits held with banks resident outside the euro area ) .

225 Key ECB interest rates the interest rates , set by the Governing Council , which reflect the monetary policy stance of the ECB .

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used .

Purchase date the date on which the sale of purchased assets by the seller to the buyer becomes effective .

Repurchase price the price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement .

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used ,

Reserve base the sum of the balance sheet items which constitute the basis for calculating the reserve requirement of a credit institution .

The price agreed upon is called the delivery price, which is equal to the forward price at the time the contract is entered into.

If the stock price rises above the exercise price, the call will be exercised and the trader will get a fixed profit.

Such an agreement is similar to collateralised borrowing , with the exception that ownership of the securities is not retained by the seller .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation .

cECB The implementation of monetary policy in the euro area February 2005 83

On the assets side of the balance sheet , holdings of securities may be recorded using market price , purchase price , the lower of market or purchase price or redemption value in accordance with standard accounting practice .

If delivery does take place , the purchase or sale entry shall be made at market price .

( 13 ) Limit order means an order to buy or sell a financial instrument at its specified limit or better

Options are contracts that give the owner the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an asset.

For example , the holder of a call ( put ) option has the right , but not the obligation , to buy ( sell ) a financial instrument ( e.g. a bond or share ) at a given price at a specified time in the future .

If delivery does take place , the purchase of sale entry shall be made at market price .

A payment balance leading to an inflow shall affect the average cost of the currency when the payment is due .

( 12 ) Market order means an order to buy or sell a financial instrument at the best available price

If delivery does take place , the purchase or sale entry shall be made at market price .

Repurchase price the price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation . Reserve account an account with the central bank on which a counterparty 's reserve holdings are maintained .

Similarly , if the market value of the underlying assets , following their revaluation , were to exceed the amount owed by a counterparty plus the variation margin , the central bank would return excess assets ( or cash ) to the counterparty .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation . Reserve account an account with the national central bank on which a counterparty 's reserve holdings are maintained .

Pre fixed coupon a coupon on floating rate instruments which is determined on the basis of the values taken by the reference index on a certain date ( or dates ) before the start of the coupon accrual period . Purchase date the date on which the sale of purchased assets by the seller to the buyer becomes effective .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation . Reserve account an account with the national central bank on which a coun terparty 's reserve holdings are maintained .

Balance of payments ( b.o.p. ) a statistical statement that summarises , for a specific period of time , the economic transactions of an economy with the rest of the world .

The size of the bid offer spread in a security is one measure of the liquidity of the market and of the size of the transaction cost.

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A reverse sale and repurchase agreement ( reverse repo ) is a contract under which a holder of cash agrees to the purchase of an asset and , simultaneously , agrees to resell the asset for an agreed price on demand , or after a stated time , or in the event of a particular contingency . Sometimes a repo transaction is agreed via a third party ( triparty repo ) .

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The difference between the purchase price and the repurchase price in a repurchase agreement corresponds to the interest due on the amount of money borrowed or lent over the maturity of the operation , i.e. the repurchase price includes the respective interest to be paid .

Pooling system see collateral pooling system . Post fixed coupon a coupon on floating rate instruments which is determined on the basis of the values taken by the reference index on a certain date ( or dates ) during the coupon accrual period .