Glossary
Here’s a glossary of the most commonly used terms you will encounter in the world of options.
A
American Style Option Ask/Asked Price/Asking Price Assignment At The Money / ATM Automatic Exercise
B
Back Months Bear Spread Bear Straddle Bid / Bid Price Bid/Ask Spread Black-Scholes Option Pricing Model Break-even Point Bull Spread Bull Straddle Butterfly Spread Buy Write Buy To Cover
C
Calendar Spread Call / Call Option Call Ratio Backspread Called Away CBOE / Chicago Board Options Exchange Class Close To The Money Closing Transaction Collar Combination Condor Contract Size Covered Call Covered Option Covered Put Credit Spread
D
Debit Spread Deep In The Money Deep Out of The Money Delta Delta Neutral Diagonal Spread Double Witching Hour Downside Protection
E
Early Exercise Elasticity Equity Option European Style Option Exercise Exercise Assignment Exercise Notice Exercise Price Expiration Cycle Expiration Date
F
Far Month Far Option Farther Out Furthest Month
G
H
Hedge Historical Volatility Horizontal Spread
I
Implied Volatility In The Money Index Option Intrinsic Value Iron Butterfly
L
Lapsed Option Last Trading Day Leaps / Long Term Equity Anticipation Securities Leg Limited Risk Long / Long Position Long Put Long Straddle
M
N
Naked Call Naked Put Near Option Nearest Month
O
Offering Price / Offer Open Interest Open Outcry Opening Transaction OPRA / Option Prices Reporting Authority Option Option Chain Option Class Option Series Options Clearing Corporation Out Of The Money
P
Premium Protective Put Put Put-Call Parity
R
Ratio Spread Roll Down Roll Forward / Roll Out Roll Up
S
Securities And Exchange Commission Selling The Spread Series Short Call Option Short Covering Short Leg Short Straddle Spread Option Statistical Volatility Straddle Strangle Strike Price Synthetic Put Synthetic Stock
T
Theoretical Value Theta / Time Decay Time Premium / Time Value Time Spread Triple Witching Type
U
Uncovered Option Underlying Unlimited Risk Underwater
V
Vega Vertical Spread Volatility Risk
