Glossary of options trading in india
The fluctuation, up or down, in the price of a stock. A closing sell transaction eliminates or reduces a long position. The Options Playbook Featuring 40 options strategies for bulls, bears, rookies, all-stars and everyone in between. Multiple leg options strategies involve additional risksand may result in complex tax treatments.
Unlimited losses are possible when taking a short stock position. Implied volatility represents the consensus of the marketplace as to the future level of stock price volatility or the probability of reaching a specific price point. A transaction that creates or increases an open option position. The price paid or received for an option in the marketplace.
Content, research, tools, and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For equity options, this is the Saturday following the third Friday of the expiration month. Ally Invest provides self-directed investors with discount brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice. Glossary of options trading in india a data set, the mean is the sum of the observations divided by the number of observations. If the option is out-of-the-money, the extrinsic value is equal to the entire premium.
By definition, the premium of at- and out-of-the-money options consists only of time value. An equity call option is out-of-the-money glossary of options trading in india its strike price is greater than the current underlying glossary of options trading in india price. An equity option that gives its buyer the right to sell shares of the underlying stock at the strike price per share at any time before it expires. A spread order is executed as a package, with both parts legs traded simultaneously, at a net debit, net credit, or for even money. For more information, please review the Characteristics and Risks of Standardized Options brochure before you begin trading options.
The result is that a normal distribution would theoretically allow negative stock prices. Any cash received in an account from the sale of an option or stock position. A transaction that eliminates or reduces an open option position.
An equity option that gives its buyer the right to sell shares of the underlying stock at the strike price per share at any time before it expires. A settlement style that is generally characteristic of index options. Equity LEAPS calls and puts can have expirations up to three years into the future and expire in January of their expiration years.
A term of any equity option contract, it is the price per share at which shares of glossary of options trading in india will change hands after an option is exercised or assigned. But here we present the standard textbook definitions for a whole slew of options terminology without any jokes, interjections or unnecessary asides. The Options Playbook Featuring 40 options strategies for bulls, bears, rookies, all-stars and everyone in between. Stock prices are unlimited to the upside, but in the real world a stock can only decline to zero.