Option Delta

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…

Time value is whatever the premium of the option is in addition to its intrinsic value. Time value is that part of the premium that reflects the time remaining before expiration. An American-style option may ordinarily be expected to trade for no less than its intrinsic value prior to its expiration, although occasionally an American-style…

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This is the process of carrying out the terms of an options contract. A call buyer can exercise his or her right to buy the stock at the strike price. A put owner can exercise his or her right to sell the contract. See also: Exercise Price, Exercise Settlement Value, Automatic Exercise

A Calendar spread is when you sell an option and buy another one with a more distant expiration date. This can be created with either puts or calls. For example, let’s say you wanted to play Netflix with calendar spread because you figure that the stock has dropped too far too quickly and will bounce…

This is when you sell Put options with the intention or to take delivery of the underlying shares. Cash is deposited in the account and, if the stock price falls to the strike price of the put option, you get the delivery of the shares into the account once the Options expire.