Flashcards
Session II Flashcards
Flashcards do conjunto (10)
- 1At-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.
- 2Time DecayA 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.
- 3In-The-MoneyA 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.
- 4Intrinsic ValueThe in-the-money portion of an option's premium.
- 5LeverageA 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.
- 6Out-of-the-MoneyA 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.
- 7Strike PriceThe 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.
- 8Extrinsic ValueThe 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 - 9Option ChainAn 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.
- 10Moneynessthe 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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- Options Trading FlashCards sobre Session II Flashcards, criado por ELITE IIVII em 24-04-2018.
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