This is a spread where the premium received from selling part of the spread is greater than the premium paid for the other part of the spread.
For instance, if you sold the AAPL 140.00 Calls @ 4.00 and bought the AAPL 142.00 Calls for 2.00 you have a credit of 2.00.
See also Bear Call Spread, Bear Put Spread, Calendar Spread etc
Fixed Return Options (FROS) are basically a type of Option contract with a set outcome. These are similar to binary options contracts that would pay out $100 if the contract is in-the-money at expiration and zero if the contract is out-of-the-money.
Options Ratio is basically the number of puts traded divided by the number of calls. It can be applied to an individual stock, a sector, an index, or an entire market. Put/call ratios are generally used in contrary manner. For example, when ratios reach extremely high levels, put buying is unusually high and it could…
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…
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
This is a measure of a stock’s volatility relative to the S&P 500 Index. High Beta stocks have high volatility. Stocks that have a beta reading of 1.00 or greater tend to move faster or are more volatile than the S&P index. And stocks that have a beta less than 1.00 tend to move slower…
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…
