Block Trade

This is when you buy a Put and sell another Put with a lower strike price. You would only use this spread if you are expecting the underlying stock to move up moderately because it will help you to benefit from the time decay. For example, let’s say you are anticipating a moderate rise in…

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…

This is also known as a Crossed Trade and it is basically a transaction/trade that is done from one broker to another ( broker to broker) rather than in the open market place. See Also Option Conversion

The cap interval is a constant established by the options market on which a series of capped options is traded. The exercise price for a capped-style option plus the cap interval (in the case of a call), or minus the cap interval (in the case of a put), equals the cap price for the option….

The holder of a physical delivery XYZ call option has the right to purchase shares of XYZ Corporation stock at the specified exercise price upon exercise prior to the expiration of the option. The holder of a physical delivery XYZ put option has the right to sell shares of XYZ Corporation at the specified exercise…

This is basically a combination of Bull Spread and Bear Spread. The main feature of this strategy us that your risk is fixed and your upside/profit is capped. Selling options with the same strike price and also buying options with the same expiration months, but higher and lower strike prices. Generally, the butterfly is in…