This article is from the Investing Articles: Stocks and Options series.
An order that is placed for execution during only one trading session. If the order cannot be executed that day, it is automatically cancelled.
Establishing and liquidating the same position or positions within one day's trading. The day is ended with no established position in the market.
Another term for "back months." Delivery The tender and receipt of an actual commodity or financial instrument, or cash in settlement of a futures contract.
A financial security whose value is determined in part from the value and characteristics of another security. The other security is referred to as the underlying security.
Options on shares of an individual common stock.
An option contract that may be exercised only during a specified period of time just prior to its expiration.
To implement the right under which the holder of an option is entitled to buy (in the case of a call) or sell (in the case of a put) the underlying security.
The difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered, multiplied by the index multiplier.
An expiration cycle relates to the dates on which options on a particular underlying security expire. A given option, will be assigned to one of three cycles, the January cycle, the February cycle or the March cycle. LEAPS are not included in this cycle.
Date on which an option and the right to exercise it, cease to exist.
The time of day by which all exercise notices must be received on the expiration date.