Thursday, September 30, 2010

Cruise TIME!!

Getting tickets next week for cruise, will post Itniee here am very excited about trip!! I've been on about 40 yup FORTY of them but this time its with a woman that for one is not that bitch from hell(ex wife) its Lady M and bro I kid you not I'm gonna make love to her for 5 days and 5 nights, yea we already did the 7 day everyday thing for a week few months ago. Yet that time she was a work this time that fine ass is mine to tap all week long as long as I want or rather we? LMAO!! RIGHT!!!!!!!!!!!!!!

Sunday Update: Cruise Ticket . Super Deal!! got a trip for two for about a Grand!! Last cruise I was on was in xmas in 2007 for $4 GRAND each! What difference a mini nationwide depression can make huh? Yea.


as of 10/01/10
We can't wait to welcome you onboard.
BOOKING NO:
SAILING: CARNIVAL SPIRIT 10/17/10
SAILING DURATION: 5 days
STATEROOM:
CATEGORY: 8K BALCONY
GUEST: MR
DINING WAITLISTED: EARLYDINING /Steakhouse- 06:00 PM  
   

DAY PORT OF CALL ARRIVE DEPART
  Sun San Diego, CA
4:00 PM
  Mon Fun Day At Sea

  Tue Cabo San Lucas, Mexico 8:00 AM 5:00 PM
  Wed Fun Day At Sea

  Thu Ensenada, Mexico 9:00 AM 5:00 PM
  Fri San Diego, CA 7:00 AM    
EMAIL:
BOOKED BY:
LOS ANGELES, CA 90034
 
 
 
View Cruise Details
Check-in ( FunPass )
Plan Activities
View Cruise Documents

 
 
  CRUISE CHARGES
  CRUISE RATE $ 958.00  
  FEDERAL TAXES/FEES $ 124.18  
 
  SUMMARY CHARGES
  PAYMENTS RECEIVED $ 1082.18  

Wednesday, September 29, 2010

Please let the Cat Out.

Ok all!! If you followed my emailed newsletter you all invested about 5k in Starbucks, hold onto you shares here comes the ride now. After this we move onto Plan B. You paid your investment management fees and I am grateful for them, now share in my vision. Like I promised you I would make you rich, so be it written so be it done. If others want into this last slice before I take off on a 5 day cruise with Lady M on October email me now.

Keep in mind in November we do a huge ass covered call on Plan B that's like a 48% return on your money and that's guaranteed btw.  Do not forget I make 10% on everything you make. Have a great week all. Am now helping Lady M get her book published as a hardcover. Please get book below before emailing or calling  me, as my threshold for folks that dont even know what a share is nearing its end.

Trading For Dummies

Tuesday, September 28, 2010

28 WEEKS LATER

Ou TV connected to laptop with a movie I downloaded from Amazon.com. Keep in mind you cant find this movie at DVD rent stores or at Best Buy. Amazon has them all.

28 Weeks Later (Widescreen Edition)

Did you see movie 28 weeks later? WOW it was scary dam unpredictable and well just a awesome movie.
The teenage girl played by Imogen Poots IS MADLY HOT.

Cast

  (Cast overview, first billed only)
Robert Carlyle... Don
Rose Byrne... Scarlet
Jeremy Renner... Doyle
Harold Perrineau... Flynn
Catherine McCormack... Alice
Idris Elba... Stone
Imogen Poots... Tammy
Mackintosh Muggleton... Andy
Amanda Walker... Sally
Shahid Ahmed... Jacob
Garfield Morgan... Geoff
Emily Beecham... Karen
Beans El-Balawi... Boy in Cottage (as Beans Balawi)
Meghan Popiel... DLR Soldier
Stewart Alexander... Military Officer

Saturday, September 25, 2010

HEY POOR TWITTER PERSON READ NOW.

I WAS FUCKING RIGHT OK!!! I predicted that today on Friday the STOCK market would rally hard...and it did. Did we profit from it? OF COURSE WE DID. Want to know how? I bet you do. Ok I'll show you how to make exactly 2-500.00 a day!!! Will send screenshots of my accounts to only those that email me. Also the spreadsheet I designed to follow the stock its intense and borders on GENIUS... Yea bitch I be PROUD!!!.

Water! 

EMAIL ME stop being Poor. Mexgger is here baby, it here now.
 


Friday, September 24, 2010

How does one fall in love?

I have loved and been heavily loved. Will Lady M have the genius to keep me here or will she be overwhelmed by her fragile emotions and let me go. If she does I will suffer greatly,even though I have a couple sweeties lined up to play the "rebound" game. I would miss M more than anybody even more than Sandy.

Wednesday, September 22, 2010

Soon I will know my Fate

This girl has for almost 7 months let me live with her. She has literally sexed me out daily be it oral or inside he goodness. I have fallen in love with her. So tomorrow I save her 401 and had it rolled into a IRA Money market account and buying some stock Starbucks and Kraft's food she should be about a few grand richer by Friday.

 I intend to ask her after she gets money if she wants me to stay or not, if she says no I will not love her less ,but I will will fly out to Italy by Monday. See I'm finally free from my ex wife and all her court maneuvers to jail me. The Judge last week told me literally, "go my friend you are a Mans man". Goodbye my children I'll be in Rome if you need me. I take my place amongst my Order and kids I sent you my pictures of my Knighthood dress this week via blackberry. I love you little Monkeys but its time I take my place among my kind and when I knell before the Pope I will ask his payers of love and parenting for you babies. I am ready my Lord thy Will be Done.

To every Muslim on this Earth know that my kind will not rest until we have destroyed you. On the Grave of Saint Pete I have sworn this as thousands of my Holy Order have done for Centuries before me. It rocks not to be able to die.

Saturday, September 18, 2010

Now I can leave to Italy.

 Dear Robby I write this so a record exisits of what I did and who I became and still am turning into. Please know this my Son when it comes down to a Woman always be in control and never believe "her" more than yourself. You're Mom, my now defeated ex wife of 30 years, was RIGHT. I planned this victory and self defense about a few years ago. One of those plans you fantasize as you cruise on the seas as we did my Son

Boy all those time you and your Sister would see me on ships balcony lol we had lots of Fun huh kid lol. Well anyways sometimes as you would play with your little friends on ship. Your mind wanders as mine did. Your Mom would usually be shopping on ship your sister who knows what she was doing on other side of ship. Yet on the last cruise, I think it was right off Sicily and stayed with me especially around south of France. It finally hit me as it sunk into your Mom at Paris right under the Eiffel tower.

Our Marriage was over. So lets fast forwad my Prince to now and why your Mom was finally defeated. I had won the War. she HAD LOST HER CHANCE TO SEND ME TO prison OR WHATEVER SHE PLANNED. kid I CAN ONLY WONDER AT WHAT I KNOW THAT SHE SO DESPOTICALLY WANTS ME TO DISAPPEAR BE IT IN prison OR DEATH,BUT IT MUST BE ONE hell of a kernel of knowledge I posses.

So the facts are and where this: On July 4 2009, ex wife called me and said she had some light kind of one night stand with Jimmy about 30 years ago.. LOL MAN! Now Jimmy back then was tying to hook up with my MOM and they eventually did. LOL these folks are like 59 and 69 now lmao!! So I tell the ex wife on phone, ok" I'll bite so what you want? After all I had just finished 2 months prior to her call, filling for divorce after 30 years of a 24/7 marriage and well 2 grown kids and lifetime later it was finally over. So on July 5th I jokingly tell Jimmy what ex wife had told me the day before. I figured it would laugh it away or make his usual satirical, but sometimes very funny remarks. Instead he wigged out as my Mom as in same room. It dawned on me what ex had said was true. I guess to some degree, after all I wasn't there and your mom is not to believed every word she speaks.

Thursday, September 16, 2010

101 Twitter Resources

Am checking all of them see if they all are current will do my best to keep them updated.If you HAVE NEW ONES please post in comment section and I will add to list.


101 Twitter Resources (taken from, heheh. from http://traffikd.com/resources/101-twitter-resources

It seems like every day I see more and more being written about Twitter. I have to admit that I don’t really get the fascination with micro blogging, but it’s becoming more and more common, and many bloggers find the services to be extremely useful for connecting with their audience. With all of the information that I’ve been seeing on Twitter, I decided to put together this collection of resources.
Getting Started:
The Big Juicy Twitter Guide – An in-depth look at Twitter.
Twictionary – A dictionary for Twitter.
TwitDir – Another Twitter directory.
The Twitter Blog – Follow their official blog.

Explore Twitter – Learn more about Twitter.
Interacting with Friends:
FriendFeed – Discover what your friends are sharing.
Twitter Karma – View your friends.
TweetWheel – Find out which of your Twitter friends know each other.
Who Should I Follow? – Twitter Friend Recommendations.
Intwition – What’s being linked to on Twitter?
CrowdStatus – Create a crowd.
My Tweeple – Manage your following and followers.
GroupTweet – Group message broadcasting for Twitter.
Twitter 100 – See your followers at a glance.
Quotably – Follow Twitter conversations.
TwitterLocal – Follow tweets from a certain area.
TwitterVerse – What is Twitter doing lately?
Twemes – Twitter memes.
Tweetmeme – Twitter meme.
TwitterWho – Batch people search.
Protecting Yourself:
The Twitter Blacklist – Identify the spammers.
Twitter Twerp Scan – Find users who are following too many people in attempt to get followers.
Twitter Snooze – Hit the snooze button on your verbose friends.
Organization:
Socialthing – Get your digital life together.
Twittercal – Tweet your Google calendar.
Twitter Digest – Read updates in a more manageable fashion.
Twitku – Read posts on Twitter, Jaiku and Pownce.
Twitter Timer – Set an alarm for things you need to remember.
Twitt.icio.us – Send links from Twitter to del.icio.us.
Twitter Where – Subscribe to Twitter feeds around a certain geographical location.
Stats & Tracking:
TweetBurner – Track what happens with the links you share.
Twitt(url)y – Tracks what URLs Twitter users are talking about.
Twitter Charts – View the number of tweets by a user according to time of day and day of the week.
Twitstat – Real time Twitter analytics.
TweetStats – Graphin’ your stats.
TwitterBuzz – What people are linking to.
Twittermeter – Monitor word frequency.
Tweet Volume – Enter words or phrases and see how often they appear on Twitter.
Twitter Vision – A real-time geographic visualization of posts to Twitter.

Twitterholic – Shows popular Twitter feeds.
Search:

Summize – Search Twitter in real time.
Twitter Search – A customized search engine for Twitter.
Maps:
YouTwit – Put Twitter status on Google maps.
TwittEarth – Live Twitts all over the world.
Desktop Clients:

Twhirl – A desktop client for Twitter.
Snitter – Desktop client for Mac and Windows.
Twitterific – Desktop client for Mac.
gTwitter – Desktop client for Linux.
Witty – Desktop client for Vista.
Twitteroo – Desktop client for the PC.
TwitterPod – Desktop client for Mac.
Twitux – Desktop client for Gnome.
Mobile Clients:
Twitterberry – Mobile client for Blackberry.
Email Twitter – Mobile client.
Twoble – Mobile client for Windows Mobile Pocket PCs.
Email:
TwitterMail – Tweet via email.
OutTwit – Use Twitter from Outlook.
IM:

TwitterIM – Tweet via IM.
Widgets:
Twitter Opera Widget – Widget for Opera.
Twitter Widget – From Widgetbox.
Twadget – The Twitter Vista sidebar gadget.
Voice:

TwitterFone – Send messages to Twitter with voice.
Development:

Twitter Development Talk – Google group.
Twitter Bots – Google code.
Blogging:
Twitter Feed – Feed your blog to Twitter.
Photos and File Sharing:
TweetPic – Share photos.
Twitxr - Share photos.
Twittershare – Share files.
SnapTweet – Send Flickr photos to Twitter.
Audio & Video:

Twiddeo – Twitter plus video.
TwitterGram – Share audio.
TwitSay – Give your Twitter account a voice.
Other Resources:
Twibler – Automatically post your new eBay listings on Twitter.
Tweet Clouds – Make word clouds from public streams.
BBC News – Get BBC headlines via Twitter.
Articles About Twitter
Twitter 101: Clarifying the Rules for Newbies – SheGeeks
Posting and Replying with Images and Links with Twitter – Etienne Teo
5 Tips to Grow Your Twitter Presence – ProBlogger
13 Odd Ways to Use Twitter – Social Media Trader
Get Into Twitter or Get Outta Public Relations – PR Squared
Twitter Feeds Made Simple – ClickPopMedia
Video: Twitter in Plain English – Common Craft
Twitter: What’s the Point? – Newsvine
Tweeting for Companies 101 – HorsePigCow
How to Use Twitter to Build Brand Integrity – Marketing Vox
Twitter and Business: The Conclusion – Business and Blogging
How We Use Twitter for Journalism – ReadWriteWeb
10 Things Twitter Users Should Not Do – Valley Wag
Twitter Hashtags and Groups – American Pai
8 Awesome Firefox Plugins for Twitter – Mashable
10 Ways Twitter Can Boost Your Social News Profile – ReadWriteWeb
Copyright and Twitter – Blog Herald
My Essential Twitter Tools – Web-Strategist.com
Twitter Can Be Liberated – Here’s How – TechCrunch
Twitter May Not Have to Worry About Uptime Anymore – TechCrunch
RFC: OpenTweets – Why is MicroBlogging Centralized? – Scott Hanselman
Why Decentralizing Twitter is so Important – Scripting.com
Decentralized Twitter’s Time Has Come – BroadbandMechanics.com
Home Tweet Home: Energy-Savvy House Broadcasts on Twitter – Wired.com
If you’re a Twitter user feel free to leave your username or a link to your profile below. Mine is stevensnell.

Sunday, September 12, 2010

Beta fo Twitter

Wednesday, June 25, 2008


What is Beta Value of Stocks?

Beta value is a measure of a stock’s volatility with respect to market volatility. It is a popular indicator used by many traders and investors to facilitate their trades. The market volatility is taken as 1, and beta values of a stock are calculated as a measure of how much the stock price moved from this market volatility.

Beta value of a stock can take one of the following forms.
  1. Negative Beta – This is a rarity, and means the stock is moving just reverse to the market.
  2. Zero (0) Beta – This means the value of the stock stays same irrespective of market movement. Again a rarity.
  3. Beta between 0 and 1 – This means the stock price swing less compared to market movements. Many blue chip company stocks and high-liquidity stocks have beta less than one. In a long-term prospective these stocks fall under low-risk low-profit category.
  4. Beta of 1 – This means the stock price moves in the same relation with the market. This can be the case with many index-related products.
  5. Beta greater than 1 – This means the stock price swings more compared to market movements. Many growing companies and technology companies have beta greater than one. Most of these stocks fall under high-return high-risk category. Also remember, beta at very high levels probably indicates high price volatility because of low-liquidity.
Beta value of stocks is important for traders following Capital Asset Pricing Model (CAPM). Many value investors ignore beta value. Beta values are based on past performances, may not accurate to predict the future, and market volatility and time period of beta are important factors to consider before making a trading decision.

BrowserMob

http://www.dpbolvw.net/click-4019781-10813408

Friday, September 10, 2010

FUCK YOU ISLAM AND DIE!!!

✈ ▌▌',  Kill every Muslim on this god-dam Earth before its too late. Rape the Jackals they call women, breed this filthy spawn of Satan out of Mankind's Blood. Fuck you Bush you had the Chance to Nuke this filthy religion and you failed.

Options make Money!

Equity call option: 
In-the-money = strike price less than stock price
At-the-money = strike price same as stock price
Out-of-the-money = strike price greater than stock price

 Options Glossary

Adjustments
Certain events such as a stock split or a stock dividend (e.g., a 3-for-2 stock split). An adjusted option may cover more than the usual one hundred shares. For example, after a 3-for-2 stock split, the adjusted option will represent 150 shares. For such options, the premium must be multiplied by a corresponding factor. Example: buying 1 call (covering 150 shares) at 4 would cost $600. See also Strike price interval
All-or-none order (AON)
A type of option order which requires that the order be executed completely or not at all. An AON order may be either a day order or a GTC (good til cancel) order.
American-style option
An option that can be exercised at any time prior to its expiration date. See also European-style option
Arbitrage
A trading technique that involves the simultaneous purchase and sale of identical assets or of equivalent assets in two different markets with the intent of profiting by the price discrepancy.
Ask / ask price
The price at which a seller is offering to sell an option or a stock. See also Assignment
Assigned (an exercise)
Received notification of an assignment by The Options Clearing Corporation. See also Assignment
Assignment
Notification by The Options Clearing Corporation to a clearing member that an owner of an option has exercised his or her rights there under. For equity and index options, assignments are made on a random basis by The Options Clearing Corporation. See also Delivery and Exercise
At-The-Money
A term that describes an option with a strike price that is equal to the current market price of the underlying stock.
Averaging down
Buying more of a stock or an option at a lower price than the original purchase so as to reduce the average cost.
Backspread
A delta-neutral spread composed of more long options than short options on the same underlying instrument. This position generally profits from a large movement in either direction in the underlying instrument.
Bear (or bearish) spread
One of a variety of strategies involving two or more options (or options combined with a position in the underlying stock) that can potentially profit from a fall in the price of the underlying stock.
Bear spread (call)
The simultaneous writing of one call option with a lower strike price and the purchase of another call option with a higher strike price. Example: writing 1 XYZ May 60 call, and buying 1 XYZ May 65 call.
Bear spread (put)
The simultaneous purchase of one put option with a higher strike price and the writing of another put option with a lower strike price. Example: buying 1 XYZ May 60 put, and writing 1 XYZ May 55 put.
Bearish
An adjective describing the opinion that a stock, or a market in general, will decline in price -- a negative or pessimistic outlook.
Beta
A measure of how closely the movement of an individual stock tracks the movement of the entire stock market.
Bid / Bid Price
The price at which a buyer is willing to buy an option or a stock.
Black-Scholes formula
The first widely-used model for option pricing. This formula can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is still often used in the valuation and trading of options.
Box spread
A four-sided option spread that involves a long call and a short put at one strike price as well as a short call and a long put at another strike price. Example: buying 1 XYZ May 60 call, and writing 1 XYZ May 65 call; simultaneously buying 1 XYZ May 65 put, and writing 1 May 60 put.
Break-even point(s)
The stock price(s) at which an option strategy results in neither a profit nor a loss. While a strategy's break-even point(s) are normally stated as of the option's expiration date, a theoretical option pricing model can be used to determine the strategy's break-even point(s) for other dates as well.
Broker
A person acting as an agent for making securities transactions. An 'Account Executive' or a 'broker' at a brokerage firm deals directly with customers. A 'Floor Broker' on the trading floor of an exchange actually executes someone else's trading orders.
Bull (or bullish) spread
One of a variety of strategies involving two or more options (or options combined with an underlying stock position) that may potentially profit from a rise in the price of the underlying stock.
Bull spread (call)
The simultaneous purchase of one call option with a lower strike price and the writing of another call option with a higher strike price. Example: buying 1 XYZ May 60 call, and writing 1 XYZ May 65 call.
Bull spread (put)
The simultaneous writing of one put option with a higher strike price and the purchase of another put option with a lower strike price. Example: writing 1 XYZ May 60 put, and buying 1 XYZ May 55 put.
Bullish
An adjective describing the opinion that a stock, or the market in general, will rise in price -- a positive or optimistic outlook.
Butterfly spread
A strategy involving three strike prices that has both limited risk and limited profit potential. A long call butterfly is established by: buying one call at the lowest strike price, writing two calls at the middle strike price, and buying one call at the highest strike price. A long put butterfly is established by: buying one put at the highest strike price, writing two puts at the middle strike price, and buying one put at the lowest strike price. For example, a long call butterfly might be: buying 1 XYZ May 55 call, writing 2 XYZ May 60 calls and buying 1 XYZ May 65 call.
Buy-write
A covered call position in which stock is purchased and an equivalent number of calls written at the same time. This position may be transacted as a combined order, with both sides (buying stock and writing calls) being executed simultaneously. Example: buying 500 shares XYZ stock, and writing 5 XYZ May 60 calls. See also Covered call / covered call writing
Calendar spread
An option strategy which generally involves the purchase of a farther-term option (call or put) and the writing of an equal number of nearer-term options of the same type and strike price. Example: buying 1 XYZ May 60 call (far-term portion of the spread) and writing 1 XYZ March 60 call (near-term portion of the spread). See also Horizontal spread
Call option
An option contract that gives the owner the right to buy the underlying security at a specified price (its strike price) for a certain, fixed period of time (until its expiration). For the writer of a call option, the contract represents an obligation to sell the underlying stock if the option is assigned.
Carry / carrying cost
The interest expense on money borrowed to finance a securities position.
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 is exercised. See also Exercise settlement amount
CBOE
The Chicago Board Options Exchange.
Class of options
A term referring to all options of the same type -- either calls or puts -- covering the same underlying stock.
Close/Closing transaction
A reduction or an elimination of an open position by the appropriate offsetting purchase or sale. An existing long option position is closed by a selling transaction. An existing short option position is closed by a purchase transaction. This transaction will reduce the open interest for the specific option involved.
Closing price
The final price of a security at which a transaction was made. See also Settlement price
Collar
A protective strategy in which a written call and a long put are taken against a previously owned long stock position. The options may have the same strike price or different strike prices and the expiration months may or may not be the same. For example, if the investor previously purchased XYZ Corporation at $46 and it rose to $62, a 'collar' involving the purchase of a May 60 put and the writing of a May 65 call could be established as a way of protecting some of the unrealized profit in the XYZ Corporation stock position. The reverse -- a long call combined with a written put -- might also be used if the investor has previously established a short stock position in XYZ Corporation. See also Fence
Collateral
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.
Combination
A trading position involving out-of-the-money puts and calls on a one-to-one basis. The puts and calls have different strike prices, but the same expiration and underlying stock. A long combination is when both options are owned, and a short combination is when both options are written. Example: a long combination might be buying 1 XYZ May 60 call, and buying 1 XYZ May 55 put.
Condor spread
A strategy involving four strike prices that has both limited risk and limited profit potential. A long call condor spread is established by buying one call at the 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.'
Contingency order
An order to execute a transaction in one security that depends on the price of another security. An example might be: 'Sell the XYZ May 60 call at 2, contingent upon XYZ stock being at or below $59 1/2.'
Contract size
The amount of the underlying asset covered by the option contract. This is 100 shares for one equity option unless adjusted for a special event, such as a stock split or a stock dividend, or otherwise special by the listing exchange.
Conversion
An investment strategy in which a long put and a short call with the same strike price and expiration are combined with long stock to lock in a nearly riskless profit. For example, buying 100 shares of XYZ stock, writing 1 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.' See also Reversal / reverse conversion
Cover
To close out an open position. This term is used most frequently to describe the purchase of an option or stock to close out an existing short position for either a profit or loss.
Covered call / covered call writing
An option strategy in which a call option is written against an equivalent amount of long stock. Example: writing 2 XYZ May 60 calls while owning 200 shares or more of XYZ stock. See also Buy-write and Overwrite
Covered combination
A strategy in which one call and one put with the same expiration, but different strike prices, are written against each 100 shares of the underlying stock. Example: writing 1 XYZ May 60 call and writing 1 XYZ May 55 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully 'covered' strategy because assignment on the short put would require purchase of additional stock.
Covered option
An open short option position that is fully offset by a corresponding stock or option position. That is, 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 that 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
Covered put / Covered cash-secured put
Cash secured put is an option stategy in which a put option is written against a sufficient amount of cash (or T-bills to pay for the stock purchase if the short option is assigned).
Covered straddle
An option strategy in which one call and one put with the same strike price and expiration are written against each 100 shares of the underlying stock. Example: writing 1 XYZ May 60 call and 1 XYZ May 60 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully 'covered' strategy because assignment on the short put would require purchase of additional stock.
Credit
Money received in an account either from a deposit or a transaction that results in increasing the account's cash balance.
Credit spread
A spread strategy that increases the account's cash balance when it is established. A bull spread with puts and a bear spread with calls are examples of credit spreads.
Curvature
A measure of the rate of change in an option's delta for a one-unit change in the price of the underlying stock. See also Delta
Cycle
The expiration dates applicable to the different series of options. Traditionally, there were three cycles:
Cycle Available expiration months
January January / April / July / October
February February / May / August / November
March March / June / September / December
Today, equity options expire on a hybrid cycle which involves a total of four option series: the two nearest-term calendar months and the next two months from the traditional cycle to which that class of options has been assigned. 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.
Day order
A type of option order which instructs the broker to cancel any unfilled portion of the order at the close of trading on the day the order is first entered.
Day trade
A position (stock or option) that is opened and closed on the same day.
Debit
Money paid out from an account either from a withdrawal or a transaction that results in decreasing the cash balance.
Debit spread
A spread strategy that decreases the account's cash balance when it is established. A bull spread with calls and a bear spread with puts are examples of debit spreads.
Decay
A term used to describe how the theoretical value of an option 'erodes' or reduces with the passage of time. Time decay is specifically quantified by theta.
Delivery
The process of meeting the terms of a written option contract when notification of assignment has been received. In the case of a short equity call, the writer must deliver stock and in return receives cash for the stock sold. In the case of a short equity put, the writer pays cash and in return receives the stock.
Delta
A measure of the rate of change in an option's theoretical value for a one-unit change in the price of the underlying stock.
Derivative / derivative security
A financial security whose value is determined in part from the value and characteristics of another security, the underlying security.
Diagonal spread
A strategy involving the simultaneous purchase and writing of two options of the same type that have different strike prices and different expiration dates. Example: buying 1 May 60 call and writing 1 March 65 call.
Discount
An adjective used to describe an option that is trading at a price less than its intrinsic value (i.e., trading below parity).
Discretion
Freedom given by an investor through his or her Account Executive to use judgment regarding the execution of an order. Discretion can be limited, as in the case of a limit order which gives the Floor Broker 1/8 or 1/4 point from the stated limit price to use his or her judgment in executing the order. Discretion can also be unlimited, as in the case of a market-not-held-order.
Early exercise
A feature of American-style options that allows the owner to exercise an option at any time prior to its expiration date.
Equity
In a margin account, this is the difference between the securities owned and the margin loans owed. It is the amount the investor would keep after all positions have been closed and all margin loans paid off.
Equity option
An option on shares of an individual common stock or exchange traded fund.
Equivalent strategy
A strategy which has the same risk-reward profile as another strategy. For example, a long May 60-65 call vertical spread is equivalent to a short May 60-65 put vertical spread. See also Synthetic position
European-style option
An option that can be exercised only during a specified period of time just prior to its expiration. See also American-style option
Ex-date / Ex-dividend date
The day before which an investor must have purchased the stock in order to receive the dividend. On the ex-dividend date, the previous day's closing price is reduced by the amount of the dividend (rounded up to the nearest eighth) because purchasers of the stock on the ex-dividend date will not receive the dividend payment. This date is sometimes referred to simply as the 'ex-date,' and can apply to other situations; for example, splits and distributions. If you purchase a stock on the ex-date for a split or distribution you are not entitled to the split stock or that distribution. However, the opening price for the stock will have been reduced by an appropriate amount, as on the ex-dividend date. Weekly financial publications, such as Barron's, often include a stock's upcoming 'ex-date' as part of their stock tables.
Exchange traded funds (ETFs)
Exchange traded funds (ETFs) are index funds or trusts that are listed on an exchange and can be traded in a similar fashion as a single equity. The first ETF came about in 1993 with the AMEX's concept of a tradable basket of stocks -- the Standard & Poor's Depositary Receipt (SPDR). Today, the number of ETFs that trade options continues to grow and diversify. Investors can buy or sell shares in the collective performance of an entire stock portfolio - or a bond portfolio -- as a single security. Exchange traded funds allow some of the more favorable features of stock trading, such as liquidity and ease of equity style features to more traditional index investing.
Exercise
To invoke the rights granted to the owner of an option contract. In the case of a call, the option owner buys the underlying stock. In the case of a put, the option owner sells the underlying stock.
Exercise by exception processing
A procedure used by The Options Clearing Corporation as an operational convenience for it's clearing members. Under these proceedings, a clearing member is deeming to have tendered exercise notices for options that are in-the-money by threshold amounts, unless specifically instructed not to do so. This procedure protects the owner from losing the intrinsic value of the option because of failure to exercise. Unless instructed not to do so, all expiring equity options that are held in customer accounts will be exercised if they are in the money by a specified amount.
Exercise price
The price at which the owner of an option can purchase (call) or sell (put) the underlying stock. Used interchangeably with striking price, strike, or exercise price.
Exercise 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 is exercised.
Expiration cycle
The expiration dates applicable to the different series of options. Traditionally, there were three cycles:
Cycle Available expiration months
January January / April / July / October
February February / May / August / November
March March / June / September / December
Today, equity options expire on a hybrid cycle which involves a total of four option series: the two nearest-term calendar months and the next two months from the traditional cycle to which that class of options has been assigned. 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.
Expiration date
The date on which an option and the right to exercise it cease to exist.
Expiration Friday
The last business day prior to the option's expiration date during which purchases and sales of options can be made. For equity options, this is generally the third Friday of the expiration month. Note: If the third Friday of the month is an exchange holiday, the last trading day will be the Thursday immediately preceding the third Friday.
Expiration month
The month during which the expiration date occurs.
Fence
A protective strategy in which a written call and a long put are taken against a previously owned long stock position. The options may have the same strike price or different strike prices and the expiration months may or may not be the same. For example, if the investor previously purchased XYZ Corporation at $46 and it rose to $62, a 'collar' involving the purchase of a May 60 put and the writing of a May 65 call could be established as a way of protecting some of the unrealized profit in the XYZ Corporation stock position. The reverse -- a long call combined with a written put -- might also be used if the investor has previously established a short stock position in XYZ Corporation.
Fill-or-kill order (FOK)
A type of option order which requires that the order be executed completely or not at all. A fill-or-kill order is similar to an all-or-none (AON) order. The difference is that if the order cannot be completely executed (i.e., filled in its entirety) as soon as it is announced in the trading crowd, it is to be 'killed' (i.e., cancelled) immediately. Unlike an AON order, a FOK order cannot be used as part of a GTC order.
FINRA (Financial Industry Regulatory Authority)
The Financial Industry Regulatory Authority (FINRA), is the largest independent regulator for all securities firms doing business in the United States.
Floor broker
A trader on an exchange floor who executes trading orders for other people.
Floor trader
An exchange member on the trading floor who buys and sells for his or her own account.
Fundamental analysis
A method of predicting stock prices based on the study of earnings, sales, dividends, and so on.
Fungibility
Interchangeability resulting from standardization. Options listed on national exchanges are fungible, while over-the-counter options generally are not. Classes of options listed and traded on more than one national exchange are referred to as multiple-listed / multiple-traded options.
Gamma
A measure of the rate of change in an option's delta for a one-unit change in the price of the underlying stock. See also Delta
Good-'til-cancelled (GTC) order
A type of limit order that remains in effect until it is either executed (filled) or cancelled, as opposed to a day order, which expires if not executed by the end of the trading day. A GTC option order is an order which if not executed will be automatically cancelled at the option's expiration.
Hedge / hedged position
A position established with the specific intent of protecting an existing position. For example, an owner of common stock may buy a put option to hedge against a possible stock price decline.
Historic volatility
A measure of actual stock price changes over a specific period of time. See also Standard deviation
Holder
Any person who has made an opening purchase transaction, call or put, and has that position in a brokerage account.
Horizontal spread
An option strategy which generally involves the purchase of a farther-term option (call or put) and the writing of an equal number of nearer-term options of the same type and strike price. Example: buying 1 XYZ May 60 call (far-term portion of the spread) and writing 1 XYZ March 60 call (near-term portion of the spread). See also Calendar spread
Immediate-or-cancel order (IOC)
A type of option order which gives the trading crowd one opportunity to take the other side of the trade. After being announced, the order will be either partially or totally filled with any remaining balance immediately cancelled. An IOC order, which can be considered a type of day order, cannot be used as part of a GTC order since it will be cancelled shortly after being entered. The difference between fill-or-kill (FOK) orders and IOC orders is that a IOC order may be partially executed.
Implied volatility
The volatility percentage that produces the 'best fit' for all underlying option prices on that underlying stock. See also Individual volatility
In-The-Money
An adjective used to describe an option with intrinsic value. A call option is in the money if the stock price is above the strike price. A put option is in the money if the stock price is below the strike price.
In-the-money option
An adjective used to describe an option with intrinsic value. A call option is in the money if the stock price is above the strike price. A put option is in the money if the stock price is below the strike price.
In-The-Money/In-the-money option
An adjective used to describe an option with intrinsic value. A call option is in the money if the stock price is above the strike price. A put option is in the money if the stock price is below the strike price.
Index
A compilation of several stock prices into a single number. Example: the S&P 100 Index.
Index option
An option whose underlying interest is an index. Generally, index options are cash-settled.
Individual volatility
The volatility percentage that justifies an option's price, as opposed to historic or implied volatility. A theoretical option pricing model can be used to generate an option's individual volatility when the five remaining quantifiable factors (stock price, time until expiration, strike price, interest rates, and cash dividends) are entered along with the price of the option itself.
Institution
A professional investment management company. Typically, this term is used to describe large money managers such as banks, pension funds, mutual funds, and insurance companies.
Intrinsic value
The in-the-money portion of an option's price. See also In-the-money option
Iron butterfly
An option strategy with limited risk and limited profit potential that involves both a long (or short) straddle, and a short (or long) combination. An iron butterfly contains four options as is an equivalent strategy to a regular butterfly spread which contains only three options. For example, a short iron butterfly might be: buying 1 XYZ May 60 call and 1 May 60 put, and writing 1 XYZ May 65 call and writing 1 XYZ May 55 put.
ISE
International Securities Exchange.
Kappa
A measure of the rate of change in an option's theoretical value for a one-unit change in the volatility assumption.
Lambda
Least-squares AMBiguity Decorrelation Adjustment.
Last trading day
The last business day prior to the option's expiration date during which purchases and sales of options can be made. For equity options, this is generally the third Friday of the expiration month. Note: If the third Friday of the month is an exchange holiday, the last trading day will be the Thursday immediately preceding the third Friday.
LEAPS® (Long-term Equity AnticiPation Securities)/Long-dated options
In English, this means calls and puts with an expiration as long as thirty-nine months. Currently, equity LEAPS have two series at any time with a January expiration. For example, in October 2008, LEAPS are available with expirations of January 2010 and January 2011.
Leg
A term describing one side of a position with two or more sides. When a trader legs into a spread, he/she establishes one side first, hoping for a favorable price movement so the other side can be executed at a better price. This is, of course, a higher-risk method of establishing a spread position.
Leverage
A term describing the greater percentage of profit or loss potential when a given amount of money controls a security with a much larger face value. For example, a call option enables the owner to assume the upside potential of 100 shares of stock by investing a much smaller amount than that required to buy the stock. If the stock increases by 10 percent, for example, the option might double in value. Conversely, a 10 percent stock price decline might result in the total loss of the purchase price of the option.
Limit order
A trading order placed with a broker to buy or sell stock or options at a specific price.
Liquidity / liquid market
A trading environment characterized by high trading volume, a narrow spread between the bid and ask prices, and the ability to trade larger sized orders without significant price changes.
Listed option
A put or call traded on a national options exchange. In contrast, over-the-counter options usually have non-standard or negotiated terms.
Long option position
The position of an option purchaser (owner) which represents the right to either buy stock (in the case of a call) or to sell stock (in the case of a put) at a specified price (the strike price) at or before some date in the future (the expiration date). It results from an opening purchase transaction -- e.g., long call or long put.
Long stock position
A position in which an investor has purchased and owns stock.
Margin / margin requirement
The minimum equity required to support an investment position. To buy on margin refers to borrowing part of the purchase price of a security from a brokerage firm.
Mark-to-market
An accounting process by which the price of securities held in an account are valued each day to reflect the closing price, or market quote if the last sale is outside of the market quote. The result of this process is that the equity in an account is updated daily to properly reflect current security prices.
Market order
A trading order placed with a broker to immediately buy or sell a stock or option at the best available price.
Market quote
A quotation of the current best bid / ask prices for an option or stock in the marketplace (an exchange trading floor). This information is usually obtained by the investor from someone at a brokerage firm. However, for listed options and stocks, these quotes are widely disseminated and available through various commercial quotation services.
Market-maker
An exchange member on the trading floor who buys and sells options for his or her own account and who has the responsibility of making bids and offers and maintaining a fair and orderly market. See also Specialist / specialist group / specialist system
Market-maker system, (competing)
A method of supplying liquidity in options markets by having market makers in competition with one another. An alternative to a specialist system. They are similarly charged with making fair and orderly markets in a given class of options.
Market-not-held order
A type of market order which allows the investor to give discretion to the floor broker regarding the price and/or time at which a trade is executed.
Market-on-close order (MOC)
A type of option order which requires that an order be executed at or near the close of trading on the day the order is entered. A MOC order, which can be considered a type of day order, cannot be used as part of a GTC order.
Married put strategy
The simultaneous purchase of stock and put options representing an equivalent number of shares. This is a limited risk strategy during the life of the puts because the stock can always be sold for at least the strike price of the purchased puts.
Model
A mathematical formula used to calculate the theoretical value of an option. See also Black-Scholes formula
Multiple-listed / multiple-traded option
Any option contract that is listed and traded on more than one national options exchange. See also Fungibility
Naked Uncovered option
A short option position that is not fully collateralized if notification of assignment is received. A short call position is uncovered if the writer does not have a long stock or long call position. A short put position is uncovered if the writer is not short stock or long another put.
NASDAQ (National Association of Securities Dealers Automated Quotation system.)
Dissemination of quotations from the NASD and/or members thereof.
NASDAQ OMX BOX
Boston Options Exchange Group L.L.C.
NASDAQ OMX PHLX
Philadelphia Stock Exchange.
NASDAQ Options Market
Dissemination of quotations from the NASD and/or members thereof for the options market.
Neutral
An adjective describing the belief that a stock or the market in general will neither rise nor decline significantly.
Neutral strategy
An option strategy (or stock and option position) expected to benefit from a neutral market outcome.
Ninety-ten (90/10) strategy
A conservative option strategy in which an investor buys Treasury bills (or other liquid assets) with 90 percent of his or her funds, and buys call options (or put options or a mixture of both) with the balance. The proportions of this strategy are subject to change based on prevailing interest rates.
Non-equity option
Any option that does not have common stock as the underlying asset. Non-equity options include options on futures, indexes, foreign currencies, Treasury security yields, etc.
Not-held order
A type of order which releases normal obligations implied by the other terms of the order. For example, a limit order designated as 'not-held' allows discretion to the floor trader in filling the order when the market trades at the limit price of the order. In this case, there is no obligation to provide the customer with an execution if the market trades through the limit price on the order. See also Discretion and Market-not-held order
NYSE
New York Stock Exchange.
NYSE AMEX
American Stock Exchange.
Offer / offer price
In the options business this means the same as ask / ask price, or the price at which a seller is offering to sell an option or a stock.
One-cancels-other order (OCO)
A type of option order which treats two or more option orders as a package, whereby the execution of any one of the orders causes all the orders to be reduced by the same amount. For example, the investor would enter an OCO order if he/she wished to buy 10 May 60 calls or 10 June 60 calls or any combination of the two which when summed equaled 10 contracts. An OCO order may be either a day order or a GTC order.
Open interest
The total number of outstanding option contracts on a given series or for a given underlying stock.
Open outcry
The trading method by which competing market makers and Floor Brokers representing public orders make bids and offers on the trading floor.
Opening transaction
An addition to, or creation of, a trading position. An opening purchase transaction adds long options to an investor's total position, and an opening sale transaction adds short options. An opening option transaction increases that option's open interest.
Option
A contract that gives the owner the right, but not the obligation, to buy or sell a particular asset (the underlying stock) at a fixed price (the strike price) for a specific period of time (until expiration) . The contract also obligates the writer to meet the terms of delivery if the contract right is exercised by the owner.
Option period
The time from when an option contract is created by a writer of that option to the expiration date; sometimes referred to as an option's 'lifetime.'
Option pricing curve
A graphical representation of the estimated theoretical value of an option at one point in time, at various prices of the underlying stock.
Option pricing model
The first widely-used model for option pricing is the Black Scholes. This formula can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is still often used in the valuation and trading of options.
Option writer
The seller of an option contract who is obligated to meet the terms of delivery if the option owner exercises his or her right. This seller has made an opening sale transaction, and has not yet closed that position.
Optionable stock
A stock on which listed options are traded.
Options Clearing Corporation, The (OCC)
A registered clearing agency whose shares are owned by the exchanges that trade listed equity options, OCC is an intermediary between option buyers and sellers. OCC issues and guarantees all listed option contracts.
OTC option
An over-the-counter option is one which is traded in the over-the-counter market. OTC options are not listed on an options exchange and do not have standardized terms. These are to be distinguished from exchange-listed and traded equity options with NASD stocks as the underlying equity issue, which are standardized. See also Fungibility
Out-of-the-money
An adjective used to describe an option that has no intrinsic value, i.e., all of its value consists of time value. A call option is out of the money if the stock price is below its strike price. A put option is out of the money if the stock price is above its strike price. See also Intrinsic value and Time value
Out-of-the-money option
An adjective used to describe an option that has no intrinsic value, i.e., all of its value consists of time value. A call option is out of the money if the stock price is below its strike price. A put option is out of the money if the stock price is above its strike price. See also Intrinsic value and Time value
Over-the-counter / Over-the-counter market
A national association having many characteristics of an exchange. Rather than a floor or physically central market place, trading takes place via computer terminals.
Overwrite
An option strategy involving the writing of call options (wholly or partially) against existing long stock positions. This is different from the buy-write strategy which involves the simultaneous purchase of stock and writing of a call. See also Ratio write
Owner
Any person who has made an opening purchase transaction, call or put, and has that position in a brokerage account.
Parity
A term used to describe an option contract's total premium when that premium is the same amount as its intrinsic value. For example, when an option's theoretical value is equal to its intrinsic value, it is said to be 'worth parity.' When an option is trading for only its intrinsic value, it is said to be 'trading for parity.' Parity may be measured against the stock's last sale, bid, or offer.
Payoff diagram
A chart of the profits and losses for a particular options strategy prepared in advance of the execution of the strategy. The diagram is plot of expected profit or loss against the price of the underlying security.
PCX
NYSE Arca
Physical delivery option
An option whose underlying entity is a physical good or commodity, like a common stock or a foreign currency. When that option is exercised by its owner, there is delivery of that physical good or commodity from one brokerage or trading account to another.
Pin risk
The risk to an investor (option writer) that the stock price will exactly equal the strike price of a written option at expiration; i.e., that option will be exactly at the money. The investor will not know how many of his/her written (short) options he/she will be assigned. The risk is that on the following Monday he/she might have an unexpected long (in the case of a written put) or short (in the case of a written call) stock position, and thus be subject to the risk of an adverse price move.
Position
The combined total of an investor's open option contracts (calls and/or puts) and long or short stock.
Position trading
An investing strategy in which open positions are held for an extended period of time.
Premium
  1. Total price of an option: intrinsic value plus time value.
  2. Often (erroneously) this word is used to mean the same as time value.
Primary market
For securities that are traded in more than one market, the primary market is usually the exchange where trading volume in that security is highest.
Profit/loss graph
A graphical presentation of the profit and loss possibilities of an investment strategy at one point in time (usually option expiration), at various stock prices.
Put option
An option contract that gives the owner the right to sell the underlying stock at a specified price (its strike price) for a certain, fixed period of time (until its expiration). For the writer of a put option, the contract represents an obligation to buy the underlying stock from the option owner if the option is assigned.
Ratio spread
A term most commonly used to describe the purchase of an option(s), call or put, and the writing of a greater number of the same type of options that are out-of-the-money with respect to those purchased. All options involved have the same expiration date. For example, buying 5 XYZ May 60 calls and writing 6 XYZ May 65 calls. See also Ratio write
Ratio write
An investment strategy in which stock is purchased and call options are written on a greater than one-for-one basis; i.e., more calls written than the equivalent number of shares purchased. For example, buying 500 shares of XYZ stock, and writing 6 XYZ May 60 calls. See also Ratio spread
Realized gains and losses
The net amount received or paid when a closing transaction is made and matched together with an opening transaction.
Resistance
A term used in technical analysis to describe a price area at which rising prices are expected to stop or meet increased selling activity. This analysis is based on historic price behavior of the stock.
Reversal / reverse conversion
An investment strategy used by professional option traders in which a short put and long call with the same strike price and expiration are combined with short stock to lock in a nearly riskless profit. For example, selling short 100 shares of XYZ stock, buying 1 XYZ May 60 call, and writing 1 XYZ May 60 put at favorable prices. The process of executing these three-sided trades is sometimes called 'reversal arbitrage.' See also Conversion
RHO
A measure of the expected change in an option's theoretical value for a 1 percent change in interest rates.
Rolling
A trading action in which the trader simultaneously closes an open option position and creates a new option position at a different strike price, different expiration, or both. Variations of this include rolling up, rolling down, rolling out and diagonal rolling.
SEC
The Securities and Exchange Commission. The SEC is an agency of the federal government which is in charge of monitoring and regulating the securities industry.
Secondary market
A market where securities are bought and sold after their initial purchase by public investors.
Sector index
An index that measure the performance of a narrow market segment, such as biotechnology or small capitalization stocks.
Secured put / cash-secured put
An option strategy in which a put option is written against a sufficient amount of cash (or T-bills) to pay for the stock purchase if the short option is assigned.
Series of options
Option contracts on the same class having the same strike price and expiration month. For example, all XYZ May 60 calls constitute a series.
Settlement
The process by which the underlying stock is transferred from one brokerage account to another when equity option contracts are exercised by their owners and the inherent obligations assigned to option writers.
Settlement price
The official price at the end of a trading session. This price is established by The Options Clearing Corporation and is used to determine changes in account equity, margin requirements and for other purposes. See also Mark-to-market
Short option position
The position of an option writer which represents an obligation on the part of the option's writer to meet the terms of the option if it is exercised by its owner. The writer can terminate this obligation by buying back (cover or close) the position with a closing purchase transaction.
Short stock position
A strategy that profits from a stock price decline. It is initiated by borrowing stock from a broker-dealer and selling it in the open market. This strategy is closed (covered) at a later date by buying back the stock and returning it to the lending broker-dealer.
Specialist / specialist group / specialist system
One or more exchange members whose function is to maintain a fair and orderly market in a given stock or a given class of options. This is accomplished by managing the limit order book and making bids and offers for his/her/their own account in the absence of opposite market side orders. See also Market-maker and Market-maker system, (competing)
Spin-off
A stock dividend issued by one company in shares of another corporate entity, such as a subsidiary corporation of the company issuing the dividend.
Spread / spread order
A position consisting of two parts, each of which alone would profit from opposite directional price moves. As orders, these opposite parts are entered and executed simultaneously in the hope of (1) limiting risk, or (2) benefiting from a change of price relationship between the two parts.
Standard deviation
A statistical measure of price fluctuation. One use of the standard deviation is to measure how stock price movements are distributed about the mean. See also Volatility
Standardization
Interchangeability resulting from standardization. Options listed on national exchanges are fungible, while over-the-counter options generally are not. Classes of options listed and traded on more than one national exchange are referred to as multiple-listed / multiple-traded options.
Stock dividend
A dividend paid in shares of stock rather than cash. See also Spin-off
Stock split
An increase in the number of outstanding shares by a corporation, through the issuance of a set number of shares to a shareholder for a set number of shares that the shareholder already owns. For example, a corporation might declare a '2-for-1 stock split.' This means that for every share of stock an investor owns, he/she will be given another, thus owning 2 shares instead of 1. There will be a corresponding reduction in equity value per share. In this case, the new shares (post-split) will be worth one-half their previous value but the investor will own twice as many shares. See also Stock dividend
Stop order
A type of contingency order, often erroneously known as a 'stop-loss' order, placed with a broker that becomes a market order when the stock trades, or is bid or offered, at or through a specified price. See also Stop-limit order
Stop-limit order
A type of contingency order placed with a broker that becomes a limit order when the stock trades, or is bid or offered, at or through a specific price.
Straddle
A trading position involving puts and calls on a one-to-one basis in which the puts and calls have the same strike price, expiration, and underlying stock. A long straddle is when both options are owned and a short straddle is when both options are written. Example: a long straddle might be buying 1 XYZ May 60 call, and buying 1 XYZ May 60 put.
Strike / strike price
The price at which the owner of an option can purchase (call) or sell (put) the underlying stock. Used interchangeably with striking price, strike, or exercise price.
Strike price interval
The normal price differential between option strike prices. Equity options generally have $2.50 strike price intervals (if the underlying stock price is below $25), $5.00 intervals (from $25 to $200), and $10 intervals (above $200). LEAPS generally start with one at-the-money, one in-the-money, and one out-of-the-money strike price. The latter two are usually set 20%-25% away from the former.
Suitability
A requirement that any investing strategy fall within the financial means and investment objectives of an investor or trader.
Support
A term used in technical analysis to describe a price area at which falling prices are expected to stop or meet increased buying activity. This analysis is based on previous price behavior of the stock.
Synthetic long call
A long stock position combined with a long put of the same series as that call.
Synthetic long put
A short stock position combined with a long call of the same series as that put.
Synthetic long Stock
A long call position combined with a short put of the same series.
Synthetic position
A strategy involving two or more instruments that has the same risk-reward profile as a strategy involving only one instrument.
Synthetic short call
A short stock position combined with a short put of the same series as that call.
Synthetic short put
A long stock position combined with a short call of the same series as that put.
Synthetic short Stock
A short call position combined with a long put of the same series.
Technical analysis
A method of predicting future stock price movements based on the study of historical market data such as (among others) the prices themselves, trading volume, open interest, the relation of advancing issues to declining issues, and short selling volume.
Theoretical option pricing model
The first widely-used model for option pricing. This formula can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is still often used in the valuation and trading of options.
Theoretical value
The estimated value of an option derived from a mathematical model. See also Model and Black-Scholes formula
Theta
A measure of the rate of change in an option's theoretical value for a one-unit change in time to the option's expiration date. See also Time decay
Tick
The smallest unit price change allowed in trading a security. For listed stock, this is generally 1/8th of a point. For a listed option under $3 in price, this is generally 1/16th of a point. For a listed option over $3, this is generally 1/8th of a point.
Time decay
A term used to describe how the theoretical value of an option 'erodes' or reduces with the passage of time. Time decay is specifically quantified by theta.
Time spread
An option strategy which generally involves the purchase of a farther-term option (call or put) and the writing of an equal number of nearer-term options of the same type and strike price. Example: buying 1 XYZ May 60 call (far-term portion of the spread) and writing 1 XYZ March 60 call (near-term portion of the spread). Also known as calendar spread or horizontal spread.
Time value
The part of an option's total price that exceeds its intrinsic value. The price of an out-of-the-money option consists entirely of time value.
Trader
  1. Any investor who makes frequent purchases and sales.
  2. A member of an exchange who conducts his or her buying and selling on the trading floor of the exchange.
Trading pit/Pit
A specific location on the trading floor of an exchange designated for the trading of a specific option class or stock.
Transaction costs
All of the charges associated with executing a trade and maintaining a position. These include brokerage commissions, fees for exercise and/or assignment, exchange fees, SEC fees, and margin interest. In academic studies, the spread between bid and ask is taken into account as a transaction cost.
Type of options
The classification of an option contract as either a put or a call.
Uncovered call option writing
A short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts.
Uncovered put option writing
A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put.
Underlying security
The security subject to being purchased or sold upon exercise of the option contract.
Vega
A measure of the rate of change in an option's theoretical value for a one-unit change in the volatility assumption. See also Kappa and Delta
Vertical spread
Most commonly used to describe the purchase of one option and writing of another where both are of the same type and of same expiration month, but have different strike prices. Example: buying 1 XYZ May 60 call and writing 1 XYZ May 65 call. See also Bull (or bullish) spread and Bear (or bearish) spread
Volatility
A measure of stock price fluctuation. Mathematically, volatility is the annualized standard deviation of a stock's daily price changes. See also Historic volatility and Individual volatility and Implied volatility
Write / writer
To sell an option that is not owned through an opening sale transaction. While this position remains open, the writer is subject to fulfilling the obligations of that option contract; i.e., to sell stock (in the case of a call) or buy stock (in the case of a put) if that option is assigned. An investor who so sells an option is called the writer, regardless of whether the option is covered or uncovered.
XYZ / XYZ Corporation
A fictitious company used as the underlying stock throughout The Options Toolbox.