A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
D
An order instructing the broker to cancel any orders which have not been filled by the close of the trading day.
An order which is entered and closed out during the same trading period.
A Bull Call Spread and a Bear Put Spread are considered Debit Spreads as they require the trader to pay out cash in order to enter the trade. You have to wait to collect your money later.
Options are an eroding instrument and their value decays with time. This is reflected on the option chain by Theta. See Time Decay.
Delta is the measure of the rate of change in an option's premium for every 1 dollar change in the price of the underlying security. For example: a delta of .50 generally means that for every 1 dollar change in the stock price the premium of the option should change by .50.
Options are considered a derivative. Derivatives obtain (derive) their value (existence) from the value and characteristics of another underlying security.
An option strategy that involves buying an option further out in time and then selling an equal number of contracts expiring at a time prior to the purchased options. For example: Buy 1 MIKI Feb 50 call (longer time until expiration) and Sell 1 MIKI Jan 55 call (shorter time until expiration). See Horizontal spread, Calendar Spread.
E
ETFs are index funds or trusts listed and traded on an exchange just like other equity security. A trader or investor can buy and sell shares in the ETF just like a stock. More and more ETFs are offering options to traders to trade just like you would trade a stock.
An option holder has the right to buy or sell the underlying security at any time before expiration. When the trader decides to invoke that right, to buy or sell, is considered as exercising the option.
The price at which the owner of the option being exercised must pay or receive for the underlying stock. See Strike Price.
The date that an option terminates and the holder can no longer exercise his/her right. For monthly options that day corresponds to the 3rd Saturday (Friday) of the month, and for weekly options it is the Friday of that week.
F
The Financial Industry Regulatory Authority is a private corporation and is the largest independent regulator for all securities firms in the United States. It's mission is to protect investors and insure that the industry operates fairly.
A trader on the floor of the exchange who executes orders for other people.
A floor trader is an exchange member on the trading floor, but he buys and sells for his/her own account.
A method of predicting stock movement and potential trades or investments based on the study of the fundamentals of the corporation such as earnings, sales, dividends, etc.
