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: Delta
This is basically the level of volatility reflected in the current options prices. Each options contract has a unique level of implied volatility that is computed using an options pricing model. The Implied Volatility (IV) is fluid and consistently changing. When the IV is high, it indicates that the option premiums are expensive. When the…
A range option is a European-style, cash-settled option that has a payout if the value of the underlying interest falls within a specific range of values (the range length) at expiration. As the underlying interest value increases throughout the range length, the amount of the payout (i.e., the cash settlement amount) of the range option…
The option writer is obligated—if and when assigned an exercise—to perform according to the terms of the option. The option writer is sometimes referred to as the option seller. An option writer who has been assigned an exercise is known as an assigned writer. Example:If a physical delivery XYZ call option is exercised by the…
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…
There are some options settle for cash rather than shares. Indexes like the S&P 500 Index (.SPX) and the S&P 100 Index (.OEX) are examples of cash settled options.
This is when you sell a call and buy a call with a higher strike price. A Bear Call Spread is used when you have a bearish outlook on a stock and you want to bet against it by going short but you don’t want to shirt the stock because it theoretically has unlimited risk….
