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This article is from the Investing Articles: Stocks and Options series.

Glossary of Options And Futures Related Terms: S

Scalp

To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within the same day, hour or even just a few minutes.

Secondary Market

A market that provides for the purchase or sale of previously sold or bought options through closing transactions. Stock exchanges and the Over The Counter market are examples of the secondary market.

Series

All option contracts of the same class that also have the same unit of trade, expiration date and strike price.

Settlement Price (futures)

A figure determined by the closing range that is used to calculate gains and losses in futures market accounts. Settlement prices are used to determine gains, losses, margin calls, and invoice prices for deliveries.

Short Hedge

The sale of a futures contract in anticipation of a later cash market sale. Used to eliminate or lessen the possible decline in value of ownership of an approximately equal amount of the cash financial instrument or physical commodity.

Short Position

An investors position where the number of contracts sold exceeds the number of contracts bought. The person is a net seller.

Stop Order (Stop)

An order to buy or sell at the market when and if a specified price is reached.

Strike price

The stated price per share for which the underlying security may be purchased in the case of a call, or sold in the case of a put, by the option holder upon exercise of the option contract.

 

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