I understand that some of my colleagues, in the finance industry find it challenging to pass the regulatory exam, M9A.

Thus, I will like to make a small contribution here. I will be writing a few blog posts, to help explain in a simple, easy to understand manner, concepts that you need to know, when you undertake the M9A exams.  If you find it helpful, do share my blog post around! :)

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In this blog post, I’m going to share more about buying a derivative instrument called options. :)

Most of us are familiar, that when we first get married, and want to buy a BTO house, we paid $2000 to “reserve” the house. This is an example of buying a “call option”.

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When you buy (long) a call option, you attain the right but not the obligation to BUY the underlying assets (house) at