Session II Flashcards

Descripción

Options Trading Fichas sobre Session II Flashcards, creado por ELITE IIVII el 24/04/2018.
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Fichas por ELITE IIVII, actualizado hace más de 1 año
ELITE IIVII
Creado por ELITE IIVII hace más de 6 años
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Resumen del Recurso

Pregunta Respuesta
At-The-Money (ATM) A term that describes an option with a strike price that is equal to the current market price of the underlying stock.
Time Decay A term used to describe how the theoretical value of an option erodes or declines with the passage of time. Time decay is specifically quantified by Theta.
In-The-Money A term used to describe an option with intrinsic value. For standard options, 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.
Intrinsic Value The in-the-money portion of an option's premium.
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%, for example, the option might double in value. Conversely, a 10% stock price decline might result in the total loss of the purchase price of the option.
Out-of-the-Money A term used to describe an option that has no intrinsic value. The option’s premium consists entirely of time value. For standard contracts, 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.
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 or exercise price.
Extrinsic Value The part of an option's total price that exceeds its intrinsic value. The premium of an out-of-the-money option consists entirely of time value. Aka Time Value
Option Chain An option chain is a matrix listing for a single underlying asset listing all puts, calls, strike prices, and pricing information for a given maturity period. The majority of online brokers and stock trading platforms display option quotes in the form of an option chain using real-time or delayed data.
Moneyness 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.
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