Bear Put Spread

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…

Are Call Sweeps Bullish? The short answer is not always. I have been tracking and trading Unusual Options Activity for many years and I have seen both Bullish & Bearish sweeps on the Call side. What this means is that you can have a sweep order to sell Calls which is essentially taking a bearish…

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:…

The cap price is the level that the automatic exercise value of a capped option must reach in order for the option to be automatically exercised. The cap price of a call option is above, and of a put option below, the exercise price of the option.

This is basically the amount of intrinsic value that an options contract has. In other words, it is the relationship between the strike price of the option and the price of the underlying asset. See at-the-money and Deep in-the-money.

This is the difference between the current bid price and the current asking, or offering price. For example, if you see a quote that looks like this: 2.05 x 3.10 – what this means is that the bid is 2.05 and the ask is 3.10. Therefore the bid-ask thread is 1.05 i.e the difference between…