This article is from the Investing Articles: Stocks and Options series.
The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract. Time value is whatever value the option has in addition to its intrinsic value. This is often referred to as premium.
Describes either a put or call.
A short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts.
A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put.
The security subject to being purchased or sold upon exercise of the option contract.
A measure of the fluctuation in the market price of the underlying security. Mathematically, volatility is the annualized standard deviation of returns. See the sections in 'Options' which describes implied and historical volatility.