Glossary 917 
Program Trading: the act of buying or selling a particular portfolio of stocks and 
hedging with an offsetting position in index futures. The portfolio of stocks may be 
small or large, but it is not the makeup of any stock index. See also Index Arbitrage. 
Protected Strategy: a position that has limited risk. A protected short sale (short 
stock, long call) has limited risk, as does a protected straddle write ( short straddle, 
long out-of-the-money combination). See also Combination, Straddle. 
Public Book (of orders): the orders to buy or sell, entered by the public, that are 
away from the current market. The board broker or specialist keeps the public 
book. Market-makers on the CBOE can see the highest bid and lowest offer at any 
time. The specialist's book is closed ( only he knows at what price and in what quan­
tity the nearest public orders are). See also Board Broker, Market-Maker, 
Specialist. 
Put: an option granting the holder the right to sell the underlying security at a cer­
tain price for a specified period of time. See also Call. 
Put-Call Ratio: the ratio of put trading volume divided by call trading volume; 
sometime~ calculated with open interest or total dollars instead of trading volume. 
Can be calculated daily, weekly, monthly, etc. Moving averages are often used to 
smooth out short-term, daily figures. 
Ratio Calendar Combination: a strategy consisting of a simultaneous position of a 
ratio calendar spread using calls and a similar position using puts, where the strik­
ing price of the calls is greater than the striking price of the puts. 
Ratio Calendar Spread: selling more near-term options than longer-term ones 
purchased, all with the same strike, either puts or calls. 
Ratio Spread: constructed with either puts or calls, the strategy consists of buying a 
certain amount of options and then selling a larger quantity of out-of-the-money 
options. 
Ratio Strategy: a strategy in which one has an unequal number of long securities 
and short securities. Normally, it implies a preponderance of short options over 
either long options or long stock. 
Ratio Write: buying stock and selling a preponderance of calls against the stock that 
is owned. ( Occasionally constructed as shorting stock and selling puts.) 
Redemption Price: the price at which a structured product may be redeemed for 
cash. This is distinctly different from a "call price," which is the price at which an 
issue may be called away by the issuer. See also Call Price, PERCS, Structured 
Product.