What happens if a physical delivery put option is exercised?

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:…

This is the difference between the current bid price and the current asking, or offering price. For example, if you see a quote that looks like this: 2.05 x 3.10 – what this means is that the bid is 2.05 and the ask is 3.10. Therefore the bid-ask thread is 1.05 i.e the difference between…

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…

This is when you sell a straddle against shares that you already own. It is important to note that the covered straddle is not really fully covered since only the calls are covered. The strategy has a bullish bias.

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…

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…