What Is A Ratio Spread?

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…

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…

This is a large equity trade consisting of 100,000 or more shares.

Combination positions are positions in more than one option at the same time. Spreads and straddles are two types of combination positions. A spread involves being both the buyer and writer of the same type of option (puts or calls) on the same underlying interest, with the options having different exercise prices and/or expiration dates….

A delayed start option is an option that does not have an exercise price when first introduced for trading but instead has an exercise price setting formula pursuant to which the exercise price will be fixed on a specified future date. 

Adjustments may be made to some of the standardized terms of outstanding options upon the occurrence of certain events related to the underlying security. The determination of whether to adjust outstanding options in response to a particular event, and, if so, what the adjustment should be, is made by OCC, taking into consideration policies established…