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Naked Call
A naked option or uncovered option is an options contract where the option writer (i.e., the seller) does not hold the underlying security position to cover the contract in case of assignment (like in a covered option). Nor does the seller hold any option of the same class on the same underlying security that could protect against potential losses (like in an options spread). A naked option involving a "call" is called a "naked call" or "uncovered call", while one involving a " put" is a "naked put" or "uncovered put". The naked option is one of riskiest options strategies, and therefore most brokers restrict them to only those traders that have the highest options level approval and have a margin account. Naked option are attractive because the seller receives the premium cost of the option without buying a corresponding position to hedge against potential losses. In the case of a naked put, the seller hopes that the underlying equity or stock price stays the same or rises. In t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Short Put Option
Short may refer to: Places * Short (crater), a lunar impact crater on the near side of the Moon * Short, Mississippi, an unincorporated community * Short, Oklahoma, a census-designated place People * Short (surname) * List of people known as the Short Arts, entertainment, and media * Short film, a cinema format (also called film short or short subject) * Short story, prose generally readable in one sitting * '' The Short-Timers'', a 1979 semi-autobiographical novel by Gustav Hasford, about military short-timers in Vietnam Brands and enterprises * Short Brothers, a British aerospace company * Short Brothers of Sunderland, former English shipbuilder Computing and technology * Short circuit, an accidental connection between two nodes of an electrical circuit * Short integer, a computer datatype Finance * Short (finance), stock-trading position * Short snorter, a banknote signed by fellow travelers, common during World War II Foodstuffs * Short pastry, one which is rich in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Short Call Option
Short may refer to: Places * Short (crater), a lunar impact crater on the near side of the Moon * Short, Mississippi, an unincorporated community * Short, Oklahoma, a census-designated place People * Short (surname) * List of people known as the Short Arts, entertainment, and media * Short film, a cinema format (also called film short or short subject) * Short story, prose generally readable in one sitting * '' The Short-Timers'', a 1979 semi-autobiographical novel by Gustav Hasford, about military short-timers in Vietnam Brands and enterprises * Short Brothers, a British aerospace company * Short Brothers of Sunderland, former English shipbuilder Computing and technology * Short circuit, an accidental connection between two nodes of an electrical circuit * Short integer, a computer datatype Finance * Short (finance), stock-trading position * Short snorter, a banknote signed by fellow travelers, common during World War II Foodstuffs * Short pastry, one which is rich in b ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Option (finance)
In finance, an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option. Options are typically acquired by purchase, as a form of compensation, or as part of a complex financial transaction. Thus, they are also a form of asset and have a valuation that may depend on a complex relationship between underlying asset price, time until expiration, market volatility, the risk-free rate of interest, and the strike price of the option. Options may be traded between private parties in ''over-the-counter'' (OTC) transactions, or they may be exchange-traded in live, public markets in the form of standardized contracts. Definition and application An option is a contract that allows the holder the right to buy or sell an underlying asset or financial instrument at a specified st ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Security (finance)
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and Fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants. Securities may be represented by a certificate or, more typically, they may be "non-certificated", that is in electronic ( dematerialized) or "book entry only" form. Certificates may be ''bearer'', meaning they entitle the holder to rights under the security merely by holding the security, or ''registered'', meaning they entitle the holder to rights only if they appear on a secur ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Covered Option
A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a " call" or a " put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however, the act of selling a covered option also limits their profit potential to the upside. One covered option is sold for every hundred shares the seller wishes to cover. A covered option constructed with a call is called a "covered call", while one constructed with a put is a "covered put". This strategy is generally considered conservative because the seller of a covered option reduces both their risk and their return. Characteristics Covered calls are bullish by nature, while covered puts are bearish. The payoff from selling a covered call is identical to selling a short naked put. Both variants are a short implied volatility strategy. Covered ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Options Spread
Options spreads are the basic building blocks of many options trading strategies. A spread position is entered by buying and selling options of the same class on the same underlying security but with different strike prices or expiration dates. An option spread shouldn't be confused with a spread option. The three main classes of spreads are the horizontal spread, the vertical spread and the diagonal spread. They are grouped by the relationships between the strike price and expiration dates of the options involved - *Vertical spreads, or money spreads, are spreads involving options of the same underlying security, same expiration month, but at different strike prices. *Horizontal, calendar spreads, or time spreads are created using options of the same underlying security, same strike prices but with different expiration dates. *Diagonal spreads are constructed using options of the same underlying security but different strike prices and expiration dates. They are called diago ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Call Option
In finance, a call option, often simply labeled a "call", is a contract between the buyer and the seller of the call option to exchange a security at a set price. The buyer of the call option has the right, but not the obligation, to buy an agreed quantity of a particular commodity or financial instrument (the underlying) from the seller of the option at a certain time (the expiration date) for a certain price (the strike price). This effectively gives the owner a ''long'' position in the given asset. The seller (or "writer") is obliged to sell the commodity or financial instrument to the buyer if the buyer so decides. This effectively gives the seller a ''short'' position in the given asset. The buyer pays a fee (called a premium) for this right. The term "call" comes from the fact that the owner has the right to "call the stock away" from the seller. Price of options Option values vary with the value of the underlying instrument over time. The price of the call cont ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Put Option
In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the ''underlying''), at a specified price (the ''strike''), by (or at) a specified date (the '' expiry'' or ''maturity'') to the ''writer'' (i.e. seller) of the put. The purchase of a put option is interpreted as a negative sentiment about the future value of the underlying stock. page 15 , 4.2.3 Positive and negative sentiment The term "put" comes from the fact that the owner has the right to "put up for sale" the stock or index. Puts may also be combined with other derivatives as part of more complex investment strategies, and in particular, may be useful for hedging. Holding a European put option is equivalent to holding the corresponding call option and selling an appropriate forward contract. This equivalence is called " put-call parity". Put options are most commonly used in the stock market to pr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Options Strategies
Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. Call options, simply known as Calls, give the buyer a right to buy a particular stock at that option's strike price. Opposite to that are Put options, simply known as Puts, which give the buyer the right to sell a particular stock at the option's strike price. This is often done to gain exposure to a specific type of opportunity or risk while eliminating other risks as part of a trading strategy. A very straightforward strategy might simply be the buying or selling of a single option; however, option strategies often refer to a combination of simultaneous buying and or selling of options. Options strategies allow traders to profit from movements in the underlying assets based on market sentiment (i.e., bullish, bearish or neutral). In the case of neutral strategies, they can be further classified into those that are bullish on ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Margin (finance)
In finance, margin is the collateral that a holder of a financial instrument has to deposit with a counterparty (most often their broker or an exchange) to cover some or all of the credit risk the holder poses for the counterparty. This risk can arise if the holder has done any of the following: * Borrowed cash from the counterparty to buy financial instruments, * Borrowed financial instruments to sell them short, * Entered into a derivative contract. The collateral for a margin account can be the cash deposited in the account or securities provided, and represents the funds available to the account holder for further share trading. On United States futures exchanges, margins were formerly called performance bonds. Most of the exchanges today use SPAN ("Standard Portfolio Analysis of Risk") methodology, which was developed by the Chicago Mercantile Exchange in 1988, for calculating margins for options and futures. Margin account A margin account is a loan account with ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Moneyness
In finance, moneyness is the relative position of the current price (or future price) of an underlying asset (e.g., a stock) with respect to the strike price of a derivative, most commonly a call option or a put option. Moneyness is firstly a three-fold classification: * If the derivative would have positive intrinsic value if it were to expire today, it is said to be in the money; * If the derivative would be worthless if expiring with the underlying at its current price, it is said to be out of the money; * And if the current underlying price and strike price are equal, the derivative is said to be at the money. There are two slightly different definitions, according to whether one uses the current price (spot) or future price (forward), specified as "at the money spot" or "at the money forward", etc. This rough classification can be quantified by various definitions to express the moneyness as a number, measuring how far the asset is in the money or out of the money with re ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Limit Order
An order is an instruction to buy or sell on a trading venue such as a stock market, bond market, commodity market, financial derivative market or cryptocurrency exchange. These instructions can be simple or complicated, and can be sent to either a broker or directly to a trading venue via direct market access. There are some standard instructions for such orders. Market order A market order is a buy or sell order to be executed immediately at the ''current'' ''market'' prices. As long as there are willing sellers and buyers, market orders are filled. Market orders are used when certainty of execution is a priority over the price of execution. A market order is the simplest of the order types. This order type does not allow any control over the price received. The order is filled at the best price available at the relevant time. In fast-moving markets, the price paid or received may be quite different from the last price quoted before the order was entered. A market order may ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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