Ask Definition

DTE means Days To Expiration. This is basically the number of days left until your Option contracts expire.  As an options trader you will want to play very close attention to the DTE when you are selecting which contract to buy or sell. The number of days to expiration can impact the profitability of a…

This is an options contract, put or call, that can be exercised at any time prior to expiration. Stock, exchange-traded funds, and some index options also settle American-style. The alternative is the European Style Option which can only be exercised at expiration.

An Iron Butterfly is a trade that is created by putting on a Short Straddle (selling at the money puts and calls) and a Long Straddle (buying out of the money puts and calls). These types of trades limit the amount of money that you can make and it also limits the potential loss. But…

A capped option will be automatically exercised prior to expiration if the options market on which the option is trading determines that the value of the underlying interest at a specified time on a trading day “hits the cap price” for the option. Capped options may also be exercised, like European-style options, during a specified…

A block trade is, as the name suggests, a single large order that hits the Unusual Options Activity Tape all at once.  A Sweep is a large order that is broken up and hits the tape in many different small orders.  Here is an example of Block Trade:  And here is an example of a…

What is an Option Sweep? An option sweep is basically when a big trader breaks up a large order into small individual trades. This is usually done in order to get filled fast or to conceal a large order.  The common thinking is that a sweep usually means a big trader knows something and is…