What Is the Delivery Price? The delivery price is the price at which one party agrees to deliver the underlying commodity and at which the counter-party agrees to accept delivery. The delivery price is defined in a futures contract traded on a registered exchange or in an over-the-counter forward agreement. The delivery price is set
What Is Delta? Delta (Δ) is a risk metric that estimates the change in price of a derivative, such as an options contract, given a $1 change in its underlying security. The delta also tells options traders the hedging ratio to become delta neutral. A third interpretation of an option’s delta is the probability that
What Is Delta Hedging? Delta hedging is an options trading strategy that aims to reduce, or hedge, the directional risk associated with price movements in the underlying asset. The approach uses options to offset the risk to either a single other option holding or an entire portfolio of holdings. The investor tries to reach a
What Is Demand? Demand is an economic concept that relates to a consumer’s desire to purchase goods and services and willingness to pay a specific price for them. An increase in the price of a good or service tends to decrease the quantity demanded. Likewise, a decrease in the price of a good or service
What is Demand for Labor When producing goods and services, businesses require labor and capital as inputs to their production process. The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more
What Is a Demand Deposit? A demand deposit account (DDA) is a bank account from which deposited funds can be withdrawn at any time, without advance notice. DDA accounts can pay interest on the deposited funds but aren’t required to. Checking accounts and savings accounts are common types of DDAs. Key Takeaways Demand deposit accounts
What Is a Demand Draft? A demand draft is a method used by an individual to make a transfer payment from one bank account to another. Demand drafts differ from regular normal checks in that they do not require signatures to be cashed. In 2005, due to the increasing fraudulent use of demand drafts, the
What Is a Demand Note? A demand note is a loan with no fixed term or repayment schedule. It can be recalled upon the lender’s request, assuming the notice required by the provisions of the loan are met. Given its relative informality, a demand loan (or note) is most common among family, friends, and close
What Is Demand-Pull Inflation? Inflation is a general rise in the price of goods in an economy. Demand-pull inflation causes upward pressure on prices due to shortages in supply, a condition that economists describe as “too many dollars chasing too few goods.” An increase in aggregate demand can also lead to this type of inflation.
What Is a Demand Schedule? In economics, a demand schedule is a table that shows the quantity demanded of a good or service at different price levels. A demand schedule can be graphed as a continuous demand curve on a chart where the Y-axis represents price and the X-axis represents quantity. Key Takeaways Analysts can
