American Style Option

When an option seller or writer receives an exercise notice, assignment has occurred. When assigned, writers must deliver the goods (shares or cash). For example, let’s say you sold 1 AAPL 145.00 CALL and the buyer decides to exercise the contract at expiration because AAPL is now trading at 146, you would need to deliver…

101 Arch Street, Suite 601 Boston, Massachusetts 02110 BOX Exchange LLC (BOX) is a national securities exchange registered with the Securities and Exchange Commission (SEC) under Section 6 of the Securities Exchange Act of 1934. It is a fully electronic options exchange that offers trading in U.S. equity options. BOX Exchange is operated by BZX…

This is an Options position where the total delta exposure is zero. For example, you can create a delta neutral position like this: Since 100 shares has a delta of +1.00, if you go long 100 shares and long two Puts that have a delta of -.50 each, the position is delta neutral. See Also:…

This is an order that you would place to offset an existing long position. For example, If you buy a call option to open a new position, you would then need to offset or close that position with a closing order. This is an order to sell-to-close.

This is the combination of a Bull Put Spread and a Bear Call Spread. The trade is created by selling a Put and buying a lower strike price Put and also selling a Call and buying a Call with a higher strike price. The short options have consecutive strike prices (short strangle).

If you sell a certain type of option and you already have or get the thing you’re supposed to sell through that option, you’re called a covered call writer. EXAMPLE: An individual owns 100 shares of XYZ common stock. If she writes one physical delivery XYZ call option—giving the call holder the right to purchase…