What is a cash-settled option?

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 exercise price setting formula for a series of delayed start options is the formula used by the options market on which the series is traded to set the exercise price for the series on the exercise price setting date. The exercise price setting formula is specified before the commencement of trading of each series…

This is when you own shares in a particular stock and then you sell Calls against it and then buy Puts. You would use this strategy when you think that the stock rice is a little overdone and you are expecting some downside. This has limited risk due to the long put option, but also…

This is basically a big change in Implied Volatility [IV]. IV gaps higher when the market expects the underlying Stock/ETF to make a big move in the short term. IV can gap lower when an important event, like an earnings report, has passed. The big gap up in the IV can cause the premium of…

This is when you sell an options contract and simultaneously buy one with a later expiration date and a higher or lower strike price. For example, if your sell to open the AAPL NOV 145.00 Call and then buy to open the AAPL DEC 150.00 Call , you have created a diagonal spread. See also:…

A block trade is, as the name suggests, a single large order that hits the Unusual Options Activity Tape all at once.  A Sweep is a large order that is broken up and hits the tape in many different small orders.  Here is an example of Block Trade:  And here is an example of a…