35 lines
2.0 KiB
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35 lines
2.0 KiB
Plaintext
Glossary 981
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Terms: the collective name denoting the expiration date, striking price, and under
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lying stock of an option contract.
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Theoretical Value: the price of an option, or a spread, as computed by a mathe
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matical model.
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Theta: the measure of how much an option's price decays for each day of time that
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passes.
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Time Spread: see Calendar Spread.
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Time Value Premium: the amount by which an option's total premium exceeds its
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intrinsic value.
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Total Return Concept: a covered call writing strategy in which one views the
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potential profit of the strategy as the sum of capital gains, dividends, and option
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premium.income, rather than viewing each one of the three separately.
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Tracking Error: the amount of difference between the performance of a specific
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portfolio of stocks and a broad-based index with which they are being compared.
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See Market Basket.
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Trader: a speculative investor or professional who makes frequent purchases and
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sales.
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Trading Limit: the exchange-imposed maximum daily price change that a futures
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contract or futures option contract can undergo.
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Treasury BilVOption Strategy: a method of investment in which one places
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approximately 90% of his funds in risk-free, interest-bearing assets such as
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Treasury bills, and buys options with the remainder of his assets.
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Type: the designation to distinguish between a put or call option.
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Uncovered Option: a written option is considered to be uncovered if the investor
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does not have a corresponding position in the underlying security. See also
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Covered.
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Underlying Security: the security that one has the right to buy or sell via the terms
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of a listed option contract.
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Undervalued: describing a security that is trading at a lower price than it logically
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should. Usually determined by the use of a mathematical model. See also Fair
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Value, Overvalued.
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Variable Ratio Write: an option strategy in which the investor owns 100 shares of
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the underlying security and writes two call options against it, each option having a
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different striking price. |