Option Terminology
Volatilite: uncertainty coefficients on the instrument. These coefficients affects premium rates.
Date: day of process can be done.
Submit date: day of the expire of option maturity. Option closes at 17.00 according to New York clock.
Amount: it shows the volume of instrument to be traded. If the wolume increase, risk would also increase, hence profit or loss would increase
Single: A put or call option by itself, as opposed to multiple options as used in a spread or straddle.
Spread: The purchase of one option and the simultaneous sale of a related option, such as two options of the same class but different strike prices and/or expiration dates. also called spread.
Straddle: The purchase or sale of an equal number of puts and calls, with the same strike price and expiration dates. A straddle provides the opportunity to profit from a prediction about the future volatility of the market. Long straddles are used to profit from high volatility. Long straddles can be effective when an investor is confident that a stock price will change dramatically, but cannot predict the direction of the move. Short straddles represent the opposite prediction, that a stock price will not change.
Strangle: An options strategy involving a put option and a call option with the same expiration dates and strike prices which are out of the money. The investor profits only if the underlier moves dramatically in either direction.
Call: shows buy right
Put: shows sell right
Strike: the price which based on the position being or not being spot transaction at the maturity.
Expiry: the day which is option will be end. The markets closes at 17.00 according to New York.
Cut off Time: means the time of options will be evaluated on expirey day.
Price: there are pips and percent choises. Pips provides shaping profit and loss according to denominator, percent provides shaping profit and loss according to numerator.
Premium: defines the amount of money which pays or earns for buying and selling options.opening price of options defines the value of option.
Call Buy: means buying call right of option at a price. The invester pays premium for this transaction.
Call Sell: means selling of put right. The invester who sells the call right earns premium. If the call buyer wants, the seller has to do the transaction.
Put Buy: means buying put option at a price. The invester pays premium for this transaction.
Put Sell: means selling put right. The invester who sells the put right earns premium. If the put option buyer wants, the seller has to do the transaction.
