American-style option
An American-style option is a put or call option that may be exercised on or before its expiration date. more...
http://www.investorglossary.com/american-style-option.htm
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bid
In practical terms, the bid is the available price at which an investor can sell shares of stock. The ask more...
http://www.investorglossary.com/bid.htm
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bid/ask spread
The bid/ask spread is the difference between the price sellers are asking for and the price that buyers are willing more...
http://www.investorglossary.com/bid-ask-spread.htm
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Black-Scholes Option Pricing Model
The Black-Scholes Option Pricing Model predicts an option’s price given the strike price, expiration date, risk-free rate of return, stock more...
http://www.investorglossary.com/black-scholes-option-pricing-model.htm
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break-even point
The break-even point for any investment is the price at which an investor neither makes nor loses money on that more...
http://www.investorglossary.com/break-even-point.htm
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call
A call is a type of option contract. A call option gives the call owner the right (but not more...
http://www.investorglossary.com/call.htm
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call option
A call option is an option contract that gives the owner (also called the buyer or holder) the right to more...
http://www.investorglossary.com/call-option.htm
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CBOE
The CBOE, or Chicago Board Options Exchange, was founded in 1973 as an exchange devoted entirely to trading options contracts. more...
http://www.investorglossary.com/cboe.htm
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CBOT
The CBOT, or Chicago Board of Trade, is the world’s oldest exchange for trading commodity futures and options. The more...
http://www.investorglossary.com/cbot.htm
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COMEX
Commodity Exchange Inc. (COMEX) was established in 1933 through the merger of four smaller exchanges based in New York: the more...
http://www.investorglossary.com/comex.htm
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Commodity Exchange
A commodity exchange is a market organized to allow for the selling and buying of commodities. Commodities, which are more...
http://www.investorglossary.com/commodity-exchange.htm
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contract size
Contract size is the deliverable amount on a contract. The quantity of goods or commodities deliverable on any future, more...
http://www.investorglossary.com/contract-size.htm
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covered call
A covered call is a short call option which is backed -- or covered -- by sufficient pre-purchased shares of more...
http://www.investorglossary.com/covered-call.htm
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covered option
A covered option is either a put or a call option which is covered (backed) by sufficient shares of the more...
http://www.investorglossary.com/covered-option.htm
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covered put
A covered put is a put option which is sold by an investor and which is covered (backed) by a more...
http://www.investorglossary.com/covered-put.htm
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CUSIP
CUSIP is an abbreviation for Committee on Uniform Securities Identification Procedures of the American Bankers Association. CUSIP numbers are more...
http://www.investorglossary.com/cusip.htm
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deep in the money
A deep in the money option is one that is presently very profitable.
An option is commonly said to be deep more...
http://www.investorglossary.com/deep-in-the-money.htm
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deep out of the money
A deep out of the money option is presently worthless.
An option is said to be deep out of the money more...
http://www.investorglossary.com/deep-out-of-the-money.htm
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denomination
The word denomination has three distinct but closely related uses in a financial context. First, in a given currency, more...
http://www.investorglossary.com/denomination.htm
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derivative
A derivative, or derivative security, is an asset whose price is based on the value of an underlying asset. more...
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derivative security
A derivative security is an asset whose price is based on the value of some other underlying asset. An option more...
http://www.investorglossary.com/derivative-security.htm
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double witching hour
Double witching hour refers to the final hour of the stock market trading session where two classes of options or more...
http://www.investorglossary.com/double-witching-hour.htm
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downgrade
A downgrade is a reduction in the rating awarded a debt or equity security. A major credit agency downgrades the more...
http://www.investorglossary.com/downgrade.htm
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downside protection
Downside protection is a cushion against the potential loss resulting from a price decline in a security or market. The more...
http://www.investorglossary.com/downside-protection.htm
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Employee Stock Ownership Plan
Employee stock ownership plan (ESOP), also known as stock purchase plan, is a program designed to promote purchasing of company more...
http://www.investorglossary.com/employee-stock-ownership-plan.htm
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European-style option
A European-style option is an option that may be exercised only at expiration, or maturity. The European-style option is more...
http://www.investorglossary.com/european-style-option.htm
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exercise price
The exercise price, or strike price, is the price at which the owner can exercise an option. A call more...
http://www.investorglossary.com/exercise-price.htm
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expiration date
In derivatives markets, the expiration date is the date that a security with a finite life, such as a futures more...
http://www.investorglossary.com/expiration-date.htm
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face value
Face value is the nominal, or stated, amount of security. The face value of a bond is the amount the more...
http://www.investorglossary.com/face-value.htm
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futures option
A futures option is an option on a futures contract. The futures option is common for both commodity futures such more...
http://www.investorglossary.com/futures-option.htm
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implied volatility
The implied volatility of an asset is an estimate of volatility, or rate of price change, for the asset. more...
http://www.investorglossary.com/implied-volatility.htm
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in escrow
An item of value is in escrow when that item is transferred to a third party (an escrow agent) for more...
http://www.investorglossary.com/in-escrow.htm
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intrinsic value
The actual value of a security, as opposed to its market or book value, is the intrinsic value of more...
http://www.investorglossary.com/intrinsic-value.htm
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LEAPS
LEAPS, or Long-Term Equity Anticipation Securities, are equity or index options that have a long-term expiration date. LEAPS can more...
http://www.investorglossary.com/leaps.htm
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long position
A long position in the stock market means that an investor has purchased a stock with the expectation that its more...
http://www.investorglossary.com/long-position.htm
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Merc
The Merc commonly refers to Chicago Mercantile Exchange (CME). The Merc facilitates trading and exchange of tangible commodities futures, more...
http://www.investorglossary.com/merc.htm
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naked option
A naked option is an option contract that creates potentially significant exposure because the option writer does not have an more...
http://www.investorglossary.com/naked-option.htm
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New York Stock Exchange
The New York Stock Exchange (NYSE) is a for-profit organization that enables trading and listing of securities on the stock more...
http://www.investorglossary.com/new-york-stock-exchange.htm
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OEX
OEX is the ticker symbol for the S&P 100 stock index, which is a capitalization-weighted index. Standard & Poor’s more...
http://www.investorglossary.com/oex.htm
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option account
An option account is an account opened with an options or securities firm that permits a customer to trade options. more...
http://www.investorglossary.com/option-account.htm
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option chain
An option chain is a listing of available option strike prices and expiration dates for both put and call options more...
http://www.investorglossary.com/option-chain.htm
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option contract
An option contract, sometimes simply called an option, is an exchange-traded derivative instrument that gives the option holder the right, more...
http://www.investorglossary.com/option-contract.htm
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option holder
An option holder is an individual or entity that has purchased an option. Depending upon the type of option, more...
http://www.investorglossary.com/option-holder.htm
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option premium
Option premium refers to the per-share amount that a buyer pays for an option - for the right to buy/"call" more...
http://www.investorglossary.com/option-premium.htm
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option writer
An option writer is an individual or entity that has sold an option contract on an exchange to an option more...
http://www.investorglossary.com/option-writer.htm
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OTC Bulletin Board
The OTC Bulletin Board is an automated trading system managed by the National Association of Security Dealers (NASD). more...
http://www.investorglossary.com/otc-bulletin-board.htm
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out of the money
An option is out of the money if it cannot be exercised at a profit given the current price of more...
http://www.investorglossary.com/out-of-the-money.htm
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quote
In the financial markets, a quote is the price at which a security is trading, has recently traded, or both. more...
http://www.investorglossary.com/quote.htm
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rating service
A rating service is an organization that provides assessments of various entities for an interested audience, such as investors. more...
http://www.investorglossary.com/rating-service.htm
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underlying security
Also called an underlier, an underlying security is the security upon which certain others (a call or put option, a more...
http://www.investorglossary.com/underlying-security.htm
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warrant
A warrant, or stock warrant, is a security issued by a corporation that allows the owner to redeem the warrant more...
http://www.investorglossary.com/warrant.htm
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