Glossary 979 
Roll Forward: close out options at a near-term expiration date and open options at 
a longer-term expiration date. 
Roll Up: close out options at a lower strike and open options at a higher strike. 
Rotation: a trading procedure on the open exchanges whereby bids and offers, but 
not necessarily trades, are made sequentially for each series of options on an 
underlying stock or index. 
Secondary M~ket: any market in which securities can be readily bought and sold 
after their initial issuance. The national listed option exchanges provided, for the 
first time, a secondary market in stock options. 
Serial Option: a futures option for which there is no corresponding futures contract 
expiring in the same month. The underlying futures contract is the next futures 
contract out in time. Example: There is no March gold futures contract, but there 
is an April gold futures contract, so March gold options, which are serial options, 
are options on April gold futures. 
Series: all op,tion contracts on the same underlying stock having the same striking 
price, expiration date, and unit of trading. 
Skew: See Volatility Skew. 
Specialist: an exchange member whose function it is both to make markets-buy 
and sell for his own account in the absence of public orders-and to keep the book 
of public orders. Most stock exchanges and some option exchanges utilize the spe­
cialist system of trading 
Spread Order: an order to simultaneously transact two or more option trades. 
Typically, one option would be bought while another would simultaneously be 
sold. Spread orders may be limit orders, not held orders, or orders with discretion. 
They cannot be stop orders, however. The spread order may be either a debit or a 
credit. 
Spread Strategy: any option position having both long options and short options of 
the same type on the same underlying security. 
Standard Deviation: a measure of the volatility of a stock. It is a statistical quanti­
ty measuring the magnitude of the daily price changes of that stock. See also, 
Volatility. 
Stop Order: an order, placed away from the current market, that becomes a market 
order if the security trades at the price specified on the stop order. Buy stop orders 
are placed above the market, while sell stop orders are placed below.