Posts by ivtrades

The Intrinsic Value is basically the value of an in-the-money option minus its time value. Intrinsic value is the current real tangible value of the options contract. The intrinsic value…

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…

This is also known as the "actual volatility" and it measures the past price movement of an underlying asset. The historical information offers a comparison of what of what is…

Front Month contracts are options contracts that have the least amount of time remaining before expiration. For example, on the 1st of August, the front month contract would the contract…

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…