- This topic has 1 reply, 2 voices, and was last updated 1 year ago by
Ken Garrett.
Ken Garrett.-
Posts
-
maximus07
- Topics: 374
- Replies: 379
- ☆☆☆☆
Sir what is Option deposits? I tried to google but found nothing except IQ option deposit mobile application.
Can you please help me understand?
Ken Garrett
- Topics: 10
- Replies: 9977
- ☆☆☆☆☆
It normally means the payment of a cash deposit (by a buyer) in conjunction with a contract committing a seller to deliver goods, provide a service etc at a specified time.
Its relevance to investing surplus funds is that it might be used to allow the company to fix a rate of interest for a deposit made in the future.
Eg interest if rates are now 3%, paying an option deposit could guarantee you that rate in 3 months’ time when you have a cash surplus. Even if interest rates fell to 2% you could insist on 3%. If they rose to 4% you could simply ignore your option and invest at 3%
All rather complicated for MA2!
maximus07
Ken Garrett- You must be logged in to reply to this topic.