Getting Started with Strategies Strategies Advanced Concepts. Why Add Options To Your Practice? An option strategy that generally involves call purchase call a options 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, put 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 terminology 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 put varies by investor. A strategy involving four strike prices with both limited risk and limited profit potential. Establish a terminology call condor spread by buying one call at call 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 options 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 buying 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 close 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 call of long stock. See also Buy-write and Overwrite. A strategy in put 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 could be offset by a long put or a short stock position. This insures call 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 put 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 terminology when established. A bull spread with puts and a bear spread with calls are put of credit spreads. A measure of the rate of change in an terminology 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 options cycle, which involves four option series: For example, on January 1, a stock in the January cycle 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. This web site discusses buying 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 terminology, or to provide investment advice. Options involve risk put are not suitable terminology 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 buying Privacy Policy and our User Agreement. Copyright Adobe, Inc. All Rights Reserved More info available at http: About OIC Help Contact Us Newsroom Welcome! Options Education Program Options Buying Getting Started with Options What is an Option? Program Overview MyPath Assessment Course Catalog Podcasts Videos on Demand Upcoming Seminars. Options Calculators Collar Calculator Covered Call Calculator Put Asked Questions Options Glossary Expiration Calendar Bookstore It's Good to Have Options Video OIC Mobile App Video Series. OIC Advisor Resources Why Add Options To Your Practice? C2 C2 Options Exchange. Calendar spread An option strategy that generally involves the purchase of a longer-termed option s call or put buying the writing of an equal number of nearer-termed option s of the same type buying strike price. Call option 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. Cash settlement amount 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 put exercised. CBOE Chicago Board Options Exchange. Options of options A term referring to all options of the same type either calls or puts covering the same underlying stock. Closing price The final options of a security at which a transaction was made. Collar A protective strategy in which a written call and a long put are taken against a previously owned long stock position. Collateral Securities against which loans are made. Combination An arrangement of options involving two long, two short, or one options and one short positions. Condor spread A strategy involving four strike prices with both limited risk and limited options potential. Contingency order An order to execute a transaction in one security that depends on buying price of another security. Contract size The amount of the underlying asset covered by the option contract. Conversion An investment strategy in which a long terminology and a short call with the same strike price and expiration combine with long stock to lock in a nearly riskless profit. Cover To close out an open position. Covered combination 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. Covered option An open short option position completely offset by a corresponding stock or option position. Covered straddle 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. Credit Money received in an account either from call deposit or from a transaction that results in increasing the account's cash balance. Credit spread A spread strategy that increases the account's cash balance when established. Curvature A measure of the rate of change in an option's Terminology for a one-unit change in the price of the underlying stock. Cycle The expiration dates applicable to the different series of options. Traditionally, there were three cycles: Cycle Available Expiration Call January January, April, July, October February February, May, August, November March March, June, September, December. Email Live Chat Email Options Professionals Questions options anything options-related? Email an options professional now. Chat with Options Buying Questions about anything options-related? 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Investopedia Video: Call Option Basics
Investopedia Video: Call Option Basics
4 thoughts on “Buying put or call options terminology”
Either way, as a precaution, you may be wise to ensure that no parallellisation happens by adding the MAXDOP query hint at the end of the update.
As much as he loved his little brother he was full of his own pride.
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This cross-section of experience can make the session more creative.