Posts by ivtrades

Fixed Return Options (FROS) are basically a type of Option contract with a set outcome. These are similar to binary options contracts that would pay out $100 if the contract…

The expiration cycle basically refers to the months available for a set of options. An example of an expiration cycle is March, June, September and December.

In the index market, it is the value of the index at expiration. For many indexes, the settlement value is computed on Friday morning and, for that reason, the last…

This is also known as the Strike Price, it is the price at which a call buyer can call/buy the underlying Stock/ETF or a put buyer can sell the underlying…

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.…

This is a type of options contract that can only be exercised at expiration. Most, but not all, index options settle European Style. The American Style Option has a different…

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…

The price change in an option for every point move in the underlying Stock/ETF. Put options have negative deltas.  See Also: Delta Neutral

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…

This is the process of satisfying put exercise or call assignment. In either case, stock is delivered. In the case of indexes, delivery involves the transfer of cash equal to…