Term
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Definition
| Owner has right to purchase asset at specified price |
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Term
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Definition
| Price to purchase asset for on or before expiry |
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Term
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Definition
| Owner has right to sell asset at specified price |
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Term
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Definition
| In the money yields profits, out yields loss, at is break even |
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Term
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Definition
| Allows holder to exercise option on or before expiry date |
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Term
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Definition
| Owner can only exercise option at expiry date |
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Term
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Definition
| Buy a put option on owned stock, if it drops below a certain level, exercise the put |
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Term
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Definition
| Sell a call option on owned stock, if it drops or stays flat you collect premium, if it rises your gains are capped at option price |
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Term
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Definition
| Buy a put and a call on stock you own, expecting the stock to go up or down a lot soon |
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Term
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Definition
| Buying 2 calls or 2 puts, either of varying exercise prices or expiry dates |
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Term
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Definition
| Brackets value of portfolio between two bounds, sell a call to buy a put, protected if stock drops but limited if it gains |
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Term
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Definition
| Like a call option, firms issue these, when exercised stock is created rather than cash |
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Term
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Definition
| Lookback, currency translated, digital, asian, barrier |
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Term
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Definition
| Made up of time value, intrinsic (in the money), volatility |
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Term
| Options Clearing Corporation |
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Definition
| Deals with the clearing of old options and issuance of new options |
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Term
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Definition
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Term
| Naked Call vs. Covered Call |
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Definition
| Naked has no stock, covered equals amount of stock owned |
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Term
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Definition
| Third Friday of march, June, September, December; options, futures, indexes all expire at the same time |
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Term
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Definition
| Derivative is option, primitive is stock |
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