970 Glossary 
Expiration Date: the day on which an option contract becomes void. The expiration 
date for listed stock options is the Saturday after the third Friday of the expiration 
month. All holders of options must indicate their desire to exercise, if they wish to 
do so, by this date. See also Expiration Time. 
Expiration Time: the time of day by which all exercise notices must be received on 
the expiration date. Technically, the expiration time is currently 5:00 P.M. on the 
expiration date, but public holders of option contracts must indicate their desire 
to exercise no later than 5:30 P.M. on the business day preceding the expiration 
date. The times are Eastern Time. See also Expiration Date. 
Facilitation: the process of providing a market for a security. Normally, this refers 
to bids and offers made for large blocks of securities, such as those traded by insti­
tutions. Listed options may be used to offset part of the risk assumed by the trad­
er who is facilitating the large block order. See also Hedge Ratio. 
Fair Value: normally, a term used to describe the worth of an option or futures con­
tract as determined by a mathematical model. Also sometimes used to indicate 
intrinsic value. See also Intrinsic Value, Model. 
First Notice Day: the first day upon which the buyer of a futures contract can be 
called upon to take delivery. See also Notice Period. 
Float: the number of shares outstanding of a particular common stock. 
Floor Broker: a trader on the exchange floor who executes the orders of public cus­
tomers or other investors who do not have physical access to the trading area. 
Follow-Up Action: any trading in an option position after the position is established. 
Generally, to limit losses or to take profits. 
Fundamental Analysis: a method of analyzing the prospects of a security by observ­
ing accepted accounting measures such as earnings, sales, assets, and so on. See 
also Technical Analysis. 
Futures Contract: a standardized contract calling for the delivery of a specified 
quantity of a commodity at a specified date in the future. 
Gamma: a measure of risk of an option that measures the amount by which the delta 
changes for a I-point change in the stock price; alternatively, when referring to an 
entire option position, the amount of change of the delta of the entire position 
when the stock changes in price by one point. 
Gamma of the Gamma: a mathematical measure of risk that measures by how 
much the gamma will change for a I-point move in the stock price. See Gamma.