Getting Started with Strategies Strategies Advanced Concepts. Why Add Options To Your Practice? A change to contract terms due to a corporate action e. Depending on the corporate action, different contract terms including strike price, deliverable, expiration date, multiplier etc. An adjusted option may cover more or less than the usual shares. For example, after a 3-for-2 stock split, the adjusted option will represent shares. For such options, the premium must be multiplied by a corresponding factor. A type of option order which requires that the order be executed completely or not at all. An option that can be exercised at any time prior to its expiration date. See also European-style option. A trading technique that involves the simultaneous purchase and sale of identical assets or equivalent assets in two different markets with the intent of profiting by the price discrepancy. The price at which a seller is offering to sell an option or a stock. Received notification of an assignment by OCC. Notification by OCC to a clearing member that an owner of an option has exercised their rights. For equity and index options, Definitions makes assignments on a random basis. See also Delivery and Exercise. A term that describes an option with a strike price that is equal to the current market price of the underlying stock. Buying more of a stock or an option at a lower price than the original purchase to reduce the average cost. A Delta-neutral spread composed of more long options than short options on the same underlying instrument. This position generally profits from a large movement in either direction in the underlying instrument. One of a variety of strategies involving two or more options or options combined with a position in the underlying stock that can potentially profit from a fall in the price of the underlying stock. The simultaneous writing of one call option with a lower strike price and the purchase of another call option with a higher strike price. The simultaneous purchase of one put option with a higher strike price and the writing of another put definitions with a lower strike price. An adjective describing the opinion that a stock, or a market in general, will decline in price; a negative or pessimistic outlook. A measure of how closely the movement of an individual stock tracks the movement of the entire stock market. The first widely used model for option pricing. This formula is used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is often used in the valuation and trading of options. A four-sided option spread that involves a long call and a short put at one strike price in addition to a short call and a long put at another strike price. The stock price s at which an option strategy results in neither a profit nor a options. While a strategy's break-even point s are normally stated as of the option's expiration date, a theoretical option pricing model can be used to determine the strategy's break-even point s for other dates as well. A person acting as an agent for making securities transactions. An account executive or a broker at a brokerage firm who deals directly with customers. A floor broker on the trading floor of an exchange actually executes someone else's trading orders. One of a variety of strategies involving two or more options or options combined with an underlying stock position that may potentially profit from a rise in the price of the underlying stock. The simultaneous purchase of one call option with a lower strike price and puts writing of another call option with a higher strike price. The simultaneous writing of one put option with a higher strike price and the purchase of another put option with a lower strike price. An adjective describing the opinion that dow stock, or the market in general, will rise in price; a positive or optimistic outlook. A strategy involving three strike prices with both limited risk and limited profit potential. Establish a long call butterfly by buying one call at the lowest strike price, writing two calls at the middle strike price and buying one call at the highest strike price. Establish a long put butterfly by buying one put at the highest strike price, writing two puts at the middle strike dow and buying one put at the lowest strike price. For example, a long call butterfly might include buying 1 XYZ May 55 call, writing 2 XYZ May 60 calls and buying 1 XYZ May 65 call. A covered call position that includes a stock purchase and an equivalent number of calls written at the same time. This position may be a combined order with both sides buying stock and writing calls executed simultaneously. An option strategy that generally involves the purchase of a longer-termed option s call or put and the writing of an equal number of nearer-termed option s of the same type and strike price. See also Horizontal spread. An option contract that gives the owner the right but not the obligation to buy the underlying security at a specified price its strike price for a certain, fixed period until its expiration. For the writer of a call option, the contract represents an obligation to sell the underlying product if the option is assigned. The difference between the exercise price of the option being exercised and the exercise settlement value of the index on the day the index option is exercised. See also Exercise settlement amount. A term referring to all options of the same type either calls or puts covering the same underlying stock. A reduction or an elimination of an open position by the appropriate offsetting purchase or sale. A selling transaction closes an existing long option position. A purchase transaction closes an existing short option position. This transaction reduces the open interest for the specific option involved. The final price of a security at which a transaction was made. See also Settlement price. A protective strategy in which a written call and a long put are taken against a previously owned long stock position. The options typically have different strike prices put strike lower than call strike. Expiration months may or may not be the same. The investor may also use the reverse a long call combined with a written put if he has previously established a short stock position in XYZ Corporation. Securities against which loans are made. If the value of the securities relative to the loan declines to an unacceptable level, this triggers a margin call. As such, the investor is asked to post additional collateral or the securities are sold to repay the loan. An arrangement of options involving two long, two short, or one long and one short positions. The positions can have different strikes or expiration months. The term combination varies by investor. A strategy involving four strike prices with both limited risk and limited profit potential. Establish a long call condor spread by buying one call at the lowest strike, writing one call at the second strike, writing another call at the third strike, and buying one call at the fourth highest strike. This spread is also referred to as a flat-top butterfly. An order to execute a transaction in one security that depends on the price of another security. The amount of the underlying asset covered by the option contract. This is shares for 1 equity option unless adjusted for a special event. An investment strategy in which a long put and a short call with the same strike price and expiration combine with long stock to lock in a nearly riskless profit. For example, buying shares of XYZ stock, writing 1 XYZ May 60 call and buying 1 XYZ May 60 put at desirable prices. The process of executing these three-sided trades is sometimes called conversion arbitrage. To definitions out an open position. This term most often describes the purchase of an option or stock to close out an existing short position for either a profit or loss. An option strategy in which a call option is written against an equivalent amount of long stock. See also Buy-write and Overwrite. A strategy in which one call and one put with the same expiration, but different strike prices, are written against each shares of the underlying stock. In actuality, this is not a fully covered strategy because assignment on the short put requires purchase of additional stock. An open short option position completely offset by a corresponding stock or option position. A covered call could be offset by long stock or a long call, while a covered put options be offset by a long put or a short stock position. This insures that if the owner of the option exercises, the writer of the option will not have a problem fulfilling the delivery requirements. See also Uncovered call option writing and Uncovered put option writing. The cash-secured put is an option strategy in which a put option is written against a sufficient amount of cash or Treasury bills to pay for the stock purchase if the short option is assigned. An option strategy in which one call and one put with the same strike price and expiration are written against each shares of the underlying stock. Money received in an account either from a deposit or from a transaction that results in increasing the account's cash balance. A spread strategy that increases the account's cash balance when established. A bull spread with puts and a bear spread with calls are examples of credit spreads. A measure of the rate of change in an option's Delta for a one-unit change in the price of the underlying stock. The expiration dates applicable to the different series of options. Traditionally, there were three cycles:. Today, most equity options expire on a hybrid cycle, which involves four option series: For example, on January 1, a stock in the January dow will be trading options expiring in these months: January, February, April and July. After the January expiration, the months outstanding will be February, March, April and July. A type of option order that instructs the broker to cancel any unfilled portion of the order at the close of trading on the day the order was first entered. Money paid out from an account from either a withdrawal or a transaction that results in decreasing the cash balance. A spread strategy that decreases the account's cash balance when established. A bull spread with calls and a bear spread with puts are examples of debit spreads. A term used to describe how the theoretical value of an option erodes or declines with the passage of time. Time decay is specifically quantified by Theta. The process of meeting the terms of a written option contract when notification of assignment has been received. In the case of a short equity call, the writer must deliver stock and in return receives cash for the stock sold. In the case of a short equity put, the writer pays cash and in return receives the stock. A measure of the rate of change in an option's theoretical value for a one-unit change in the price of the underlying stock. A financial security whose value is determined in part from the value and characteristics of another security known as the underlying security. A strategy involving the simultaneous purchase and writing of two options of the same type that have different strike prices and different expiration dates. An adjective used to describe an option that is trading at a price less than its intrinsic value i. Freedom given by an investor to his or her account executive to use judgment regarding the execution of an order. Discretion can be limited, as in the case of a limit order that gives the floor broker price flexibility beyond the stated limit price to use his or her judgment in executing the order. Discretion can also be unlimited, as in the case of a market-not-held order. A feature of American-style options that allows the owner to exercise an option at any time prior to expiration. In a margin account, equity is the difference between the securities owned and the margin loans owed. Definitions investor keeps this amount after all positions are closed and all margin loans paid off. A strategy that has the same risk-reward profile as another strategy. For example, a long May call vertical spread is equivalent to a short May put vertical spread. See also Synthetic position. An option that can be exercised only during a specified period just prior to expiration. See also American-style option. The day before the date that an investor must have purchased the stock in order to receive the dividend. On the ex-dividend date, the previous day's closing price is reduced by the amount of the dividend because purchasers of the stock on the ex-dividend date will not receive the dividend payment. This date is sometimes referred to dow as puts ex-date, and can apply to other situations e. If you purchase a stock on the ex-date for a split or distribution, you are not entitled to the split stock or that distribution. However, the opening price for the stock will have been reduced by an appropriate amount, as on the ex-dividend date. Weekly financial publications, such as Barron's, often include a stock's upcoming ex-date as part of their stock tables. Exchange traded funds ETFs are index funds or trusts listed on an exchange and traded in a similar fashion as a single equity. Today, the number of ETFs that trade options continues to grow and diversify. Investors can buy or sell shares in the collective performance of an entire stock portfolio or a bond portfolio as a single security. Exchange traded funds allow investors to enjoy some of the more favorable features of definitions trading, such as liquidity and ease of equity style, in an environment of more traditional index investing. To invoke the rights granted to the owner of an option contract. In the case of a call, the option owner buys the underlying stock. In the case of a put, the option owner sells the underlying stock. A procedure used by OCC as an operational convenience for clearing members. Under these proceedings, OCC assumes a clearing member tendered exercise notices for options that are in-the-money by threshold amounts, unless specifically instructed not to do so. This procedure protects the owner from losing the intrinsic value of the option because of failure to exercise. Unless instructed not to do so, all expiring equity options held in customer accounts are exercised if they are in-the-money by a specified amount. The price that the owner of an option can purchase call or sell put the underlying stock. Used interchangeably with strike or strike price. Today, equity options expire on a hybrid cycle that involves four option series: The last business day prior to the option's expiration date during which purchases and sales of options can be made. For equity options, this is generally the third Friday of the expiration month. If the third Friday of the options is an exchange holiday, the last trading day is the Thursday immediately preceding the third Friday. A protective strategy in which a written call and a long put are added to a previously owned long stock position, also referred to as a collar. The options may have the same strike price or different strike prices. The expiration months may or may not be the same. An investor might also use the reverse a long call combined with a written put if he has previously established a short stock position in XYZ Corporation. A type of option order that requires that the order be executed completely or not at all. A fill-or-kill order is similar to an all-or-none AON order. The difference is that if the order cannot be completely executed i. Interchangeability resulting from standardization. Options listed on national exchanges are fungible, while over-the-counter options generally are not. A type of limit order that remains in effect until it is either executed filled or cancelled. This is unlike a day order, which expires if not executed by the end of the trading day. If not executed, a GTC option order is automatically cancelled at the option's expiration. A position established with the specific intent of protecting an existing position. For example, an owner of common stock may buy a put option to hedge against a possible stock price decline. A measure of actual stock price changes over a specific period. See also Standard deviation. Any person who has made an opening purchase transaction, call or put, and has that position in a brokerage account. An option strategy that generally puts the purchase of a farther-term option call or put and the writing of an equal number of nearer-term options of the same type and strike price. See also Calendar spread. A type of option order that gives the trading crowd one opportunity to take the other side of the trade. After announcement, the order is either partially or totally filled with any remaining balance immediately cancelled. The difference between fill-or-kill FOK orders and IOC orders is that an IOC order may be partially executed. The volatility percentage that produces the best fit for all underlying option prices on that underlying stock. See also Individual volatility. A term used to describe an option with intrinsic value. For standard options, a call option puts in-the-money if the stock price is above the strike price. A put option is in-the-money if the stock price is below the strike price. The volatility percentage that justifies an option's price, as puts to historic volatility or implied volatility. A theoretical pricing model can be used to generate an option's individual volatility when the five remaining quantifiable factors stock price, time until expiration, strike price, interest rates and cash dividends are entered along with the price of the option itself. A professional investment management company. Typically, this term describes money managers such as banks, pension funds, mutual funds and insurance companies. The in-the-money portion of an option's premium. An option strategy with limited risk and limited profit potential that involves both a long or short straddleand a short or long strangle. An iron butterfly contains four options. Puts is equivalent to a regular butterfly spread that contains only three options. For example, a short iron butterfly might include buying 1 XYZ May 60 call and 1 May 60 put, and writing 1 XYZ May 65 call and writing 1 XYZ May 55 put. A measure of the rate of change in an option's theoretical value for a one-unit change in the volatility assumption. A measure of leverage. The last business day before the option's expiration date during which purchases and sales of options can be made. Calls and puts with an expiration of over nine months when listed. Currently, equity LEAPS have two series at any time with a January expiration. A term describing one side of a position with two or more sides. When a trader legs into a spread, they establish one side first, hoping for a favorable price movement in order to execute the other side at a better price. This is a higher-risk method of establishing a spread position. A term describing the greater percentage of profit or loss potential when a given amount of money controls a security with a much larger face value. For example, a call option enables the owner to assume the upside potential of shares of stock by investing a much smaller amount than that required to buy the stock. Trading environments characterized by high trading volume, a narrow spread between the bid and ask prices, and the ability to trade larger sized orders without significant price changes. A put or call traded on a national options exchange. In contrast, over-the-counter options usually have non-standard or negotiated terms. The position of an option purchaser owner which represents the right to either buy stock in the case of a call or to sell stock in the case of a dow at a specified price strike price at or before some date in the future the expiration date. This position results from an opening purchase transaction long call or long put. The minimum equity required to support an investment position. To buy on margin refers to borrowing part of the purchase price of a security from a brokerage firm. An accounting process by which the price of securities held in an account are valued each day to reflect the closing price or closing market quotes. As a result, the equity in an account is updated daily to reflect current security prices properly. A trading order placed with a broker to immediately buy or sell a stock or option at the best available price. The investor usually obtains this information from a brokerage firm. However, for listed options and stocks, these quotes are widely disseminated and available through various commercial quotation services. An exchange member on the trading floor who buys and sells options for their own account and who has the responsibility of making bids and offers and maintaining a fair and orderly market. A method of supplying liquidity in options markets by having market makers in competition with one another. As an alternative to a specialist system, they are also responsible for making fair and orderly markets in a given class of options. A type of option order that requires that an order be executed at or near the close of trading on the day the order is entered. The simultaneous purchase of stock and put options representing an equivalent number of shares. This is a limited risk strategy during the life of the puts because the stock can always be sold for at least the strike price of the purchased puts. A mathematical formula used to calculate the theoretical value of an option. See also Black-Scholes formula. Any option contract listed and traded on more than one national options exchange. A short option position that is not fully collateralized if notification of assignment is received. A short call position is uncovered if the writer does not have a long stock or deeper-in-the-money long call position. A short put position is uncovered if the writer is not short stock or long another deeper-in-the-money put. Money received in an account either from a deposit or a transaction that results in increasing the account's cash balance. Money paid from an account either from a withdrawal or a transaction that results in decreasing the cash balance. An adjective describing the belief that a stock or the market in general will neither rise nor decline significantly. An option strategy Or stock and option position expected to benefit from a neutral market outcome. The proportions of this strategy are subject to change based on prevailing interest rates. Any option that does not have common stock as the underlying asset. Non-equity options include options on futures, indexes, foreign currencies, Treasury security yields, etc. A type of order that releases normal obligations implied by the dow terms of the order. For example, a limit order designated as not-held allows discretion to the floor broker in filling the order when the market trades at the limit price of the order. In this case, there is no obligation to provide the customer with an execution if the market trades through the limit price on the order. See options Discretion and Market-not-held order. Nasdaq Options Market, LLC. Please update the www. Participant Exchanges and Naming Convention. Wednesday, March 08, 3: ISE exchanges name changes. Thanks for the info! There were some emails floating around last week on ISE's name change. We'll have some development as well as content work to be done to accommodate the change. With regards to NASDAQ vs. Nasdaq, the website uses both the exchange's legal name and trading facility names. The approved NASDAQ ones were originally provided to us by Legal back in We should reach out to Legal to have them revalidate the list. They had last reviewed and certified it in January I've attached the document that you were referring to in your email. I'm also attaching a spreadsheet where we in conjunction with Product Development track the exchange identifiers used on our various systems. FW ISE name changes. Also known as ask or ask price. A type of option order that treats two or more option orders as a package, whereby the execution of any one of the orders causes all the orders to be reduced by the same amount. For example, the investor would enter an OCO order if they wished to buy 10 May 60 calls or 10 June 60 calls or any combination of the two which when summed equaled 10 contracts. The total number of outstanding option contracts on a given series or for a given underlying stock. The trading method by which competing market makers and floor brokers representing public orders make bids and offers on the trading floor. An addition to, or creation of, a trading position. An opening purchase transaction adds long options to an investor's total position, and an opening sale transaction adds short options. An opening option transaction increases that option's open interest. A contract that gives the owner the right, but not the obligation, to buy or sell a particular asset the underlying stock at a fixed price the strike price for a specific period of time until expiration. The contract also obligates the writer to meet the terms of delivery if the owner exercises the contract right. The time from when a buyer or writer of an option creates an option contract to the expiration date; sometimes referred to as an option's lifetime. A graphical representation of the estimated theoretical value of an option at one point in time, at various prices of the underlying stock. The first widely used model for option pricing was the Black Scholes. This formula can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is still often used in the valuation and trading of options. The seller of an option contract who is obligated to meet the terms of delivery if the option owner exercises his or her right. This seller has made an opening sale transaction, and has not yet closed that position. OCC is the world's largest equity derivatives clearing organization. Founded inOCC operates under the jurisdiction of both the Securities and Exchange Commission SEC as a Registered Clearing Agency and the Commodity Futures Trading Commission CFTC as a Derivatives Clearing Organization. OCC provides central counterparty Definitions clearing and settlement services to 16 exchanges and trading platforms for options, financial futures, security futures and securities lending transactions. An over-the-counter option is traded in the over-the-counter market. OTC options are not listed on an options exchange and do not have standardized terms. These are to be distinguished from exchange-listed and traded equity options, which are standardized. A term used to describe an option that has no intrinsic value. For standard contracts, a call option is out-of-the-money if the stock price is below its strike price. A put option is out-of-the-money if the stock price is above its strike price. See also Intrinsic value and Time value. A decentralized association of market participants, with many characteristics of options exchange, where trading takes place via an electronic network. An option strategy involving the writing of call options wholly or partially against existing long stock definitions. This is different from the buy-write strategy that involves the simultaneous definitions of stock and writing of a call. See also Ratio write. A term used to describe an option contract's total premium when that premium is the same amount as its intrinsic value. Parity may be measured against the stocks last sale, bid or offer. A chart of the profits and losses for a particular options strategy prepared in advance of the execution of the strategy. The diagram is a plot of expected profits or losses against the price of options underlying security. An option whose underlying entity is a physical good or commodity, like a common stock or a foreign currency. When its owner exercises that option, there is delivery of that physical good or commodity from one brokerage or trading account to another. The risk to an investor option writer that the stock price will exactly equal the strike price at expiration that option will be exactly at-the-money. The investor will not know how many of their written short options will be assigned or whether a last second move in the underlying will leave any long options in- or out-of-the-money. The risk is that on the following Monday the option writer might have an unexpected long in the case of a written put or short in the case of a written call stock position, and thus be subject to the risk of an adverse price move. Total price of an option: Often Erroneously this word is used to mean the same as time value. For securities traded in more than one market, the primary market is usually the exchange where trading volume in that security is highest. A graphical presentation of the profit and loss possibilities of an investment strategy at one point in time usually option expirationat various stock prices. An option contract that gives the owner the right to sell the underlying stock at a specified price its strike price for a certain, fixed period until its expiration. For the writer of a put option, the contract represents an obligation to buy the underlying stock from the option owner if the option is assigned. A term most commonly used to describe the purchase of an option scall or put, and the writing of a greater number of the same type of options that are out-of-the-money with respect to those purchased. All options involved have the same expiration date. For example, buying 5 XYZ May 60 calls and writing 6 XYZ May 65 calls. An investment strategy in which stock is purchased and call options are written on a greater than one-for-one basis more calls written than the equivalent number of shares purchased. For example, buying shares of XYZ stock, and writing 6 XYZ May 60 calls. See also Ratio spread. The net amount received or paid when a closing transaction is made and matched with an opening transaction. A term used in technical analysis to describe a price area at which rising prices are expected to stop or meet increased selling activity. This analysis is based on historic price behavior of the stock. An investment strategy used mostly by professional option traders in which a short put and long call with the same strike price and expiration combine with short stock to lock in a nearly riskless profit. For example, selling short shares of XYZ stock, buying 1 XYZ May 60 call, and writing 1 XYZ May 60 put at favorable prices. The process of executing these three-sided dow is sometimes called reversal arbitrage. A trading action in which the trader simultaneously closes an open option position and creates a new option position at a different strike price, different expiration, or both. Variations of this include rolling up, rolling down, rolling out and diagonal rolling. The Securities and Exchange Commission. The SEC is an agency of the federal puts that is in charge of monitoring and regulating the securities industry. An index that measures the performance of a narrow market segment, such as biotechnology or small capitalization stocks. An option strategy in which a put option is written against a sufficient amount of cash or Treasury bills to pay for the stock purchase if the short option is assigned. Option contracts on the same class having the same strike price and expiration month. For example, all XYZ May 60 calls constitute a series. The process by which the underlying stock is transferred from one brokerage account to another when equity option contracts are exercised by their owners and the inherent obligations assigned to option writers. The official price at the end of a trading session. OCC establishes this price and uses it to determine changes in account equity, margin requirements and for other purposes. The position of an option writer that represents an obligation on the part of the option's writer to meet the terms of the option if its owner exercises it. The writer can terminate this obligation by buying back cover or close the position with a closing purchase transaction. A strategy that profits from a stock price decline. It is initiated by borrowing stock from a broker-dealer and selling it in the open market. This strategy is closed covered later by buying back the stock and returning it to the lending broker-dealer. One or more exchange members whose function is to maintain a fair and orderly market in a given stock or a given class of options. This is accomplished by managing the limit order book and making bids and offers for their own account in the absence of opposite market side orders. See also Market maker and Market maker system competing. A stock dividend issued by one company in shares of another corporate entity, such as a subsidiary corporation of the company issuing the dividend. A position consisting of two parts, each of which alone would profit from opposite directional price moves. As orders, these opposite parts are entered and executed simultaneously in the hope of 1 limiting risk, or 2 benefiting from a change of price relationship between the two parts. A statistical measure of price fluctuation. One use of the standard deviation is to measure dow stock price movements are distributed about the mean. A dividend paid in shares of stock rather than cash. An increase in the number of outstanding shares by a corporation through the issuance of a set number of shares to a shareholder for a set number of shares that the shareholder already owns. For example, a corporation might declare a 2-for-1 stock split. There will be a corresponding reduction in equity value per share. In this case, the new shares post-split will be worth one-half their previous value but the investor will own twice as many shares. A type of contingency order, often erroneously known as a stop-loss order, placed with a broker. It becomes a market order when the stock trades, or is bid or offered, at or through a specified price. See also Stop-limit order. A type of contingency order placed with a broker that becomes a limit order when the stock trades, or is bid or offered, at or through a specific price. A trading position involving puts and calls on a one-to-one basis in which the puts and calls have the same strike price, expiration and underlying stock. When both options are owned, the position is called a long straddle. When both options are written, it is puts short straddle. The price at which the owner of an option can purchase call or sell put the underlying stock. Used interchangeably with striking price or exercise price. The normal price differential between option strike prices. As mentioned, many stocks are now exempt from standard listing procedures and strike increments will vary. A requirement that any investing strategy fall within the financial means and investment objectives of an investor or trader. A term used in technical analysis to describe a price area at which falling prices are expected to stop options meet increased buying activity. This analysis is based on previous price behavior of the stock. A strategy options two or more instruments that have the same risk-reward profile as a strategy involving only one instrument. A method of predicting future stock price movements based on the study of historical market data such as the prices themselves, trading volume, open interest, the relation of advancing issues to declining issues, short selling volume and others. A formula that can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. The estimated value of an option derived from a mathematical model. See also Model and Black-Scholes formula. A measure of the rate of change in an option's theoretical value for a one-unit change in time to the option's expiration date. See also Time decay. A term used to describe how the theoretical value of an option erodes or reduces with the passage of time. Also known as calendar spread or horizontal spread. The part of an option's total price that exceeds its intrinsic value. The premium of an out-of-the-money option consists entirely of time value. Any investor who makes frequent purchases and sales. A member of an exchange who conducts his or her buying and selling on the trading floor of the exchange. A specific location on the trading floor of an exchange designated for the trading of a specific option class or stock. All of the charges associated with executing a trade and maintaining a position. In academic studies, the spread between bid and ask is taken into account as a transaction cost. A short call option position in which the writer does not own an equivalent position in the underlying security represented by his or her option contracts. A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put. See also Kappa and Delta. Most commonly used to describe the purchase of one option and writing of another where both are of the same type and of same expiration month, but have different strike prices. See also Bull or bullish spread and Bear or bearish spread. A measure of stock price fluctuation. Mathematically, volatility is the annualized standard deviation of a stock's daily price changes. See also Historic volatilityIndividual volatility and Implied volatility. To sell an option that is not owned through an opening sale transaction. While this position remains open, the writer is subject to fulfilling the obligations of that option contract; i. An investor who so sells an option is called the writer, regardless of whether the option is covered or uncovered. This web site discusses exchange-traded options issued by The Options Clearing Corporation. No statement in this web site is to be construed as a recommendation to purchase or sell a security, or to provide investment advice. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr. Please view our Privacy Policy and our User Agreement. Copyright Adobe, Inc. All Rights Reserved More info available at http: About OIC Help Contact Us Newsroom Welcome! 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At first, I was told this issue was because of a lack of vitamin B-12 since many vegetarians are deficient in this vitamin that is mainly found in animal foods.
Many view our refusal to accept the label either as an act of betrayal or as a sign of insufficient ideological growth.
At first, I was told this issue was because of a lack of vitamin B-12 since many vegetarians are deficient in this vitamin that is mainly found in animal foods.
Lets say that my light meter has her at ISO 100, F5.6, at 125 I want to add some fill so I set my flash manually to give me a reading of F4.