35 lines
2.3 KiB
Plaintext
35 lines
2.3 KiB
Plaintext
Glossary 971
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Good Until Canceled (GTC): a designation applied to some types of orders, mean
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ing that the order remains in effect until it is either filled or canceled. See also
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Limit, Stop-Limit Order, Stop Order.
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Hedge Ratio: the mathematical quantity that is equal to the delta of an option. It is
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useful in facilitation in that a theoretically riskless hedge can be established by tak
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ing offsetting positions in the underlying stock and its call options. See also Delta,
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Facilitation.
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Historic Volatility: See Volatility.
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Holder: the owner of a security.
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Horizontal Spread: an option strategy in which the options have the same striking
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price, but different expiration dates.
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Implied Volatility: a prediction of the volatility of the underlying stock, it is deter
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mined by using prices currently existing in the option market at the time, rather
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than using historical data on the price changes of the underlying stock See also
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Volatility.
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Incremental Return Concept: a strategy of covered call writing in which the
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investor is striving to earn an additional return from option writing against a stock
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position that he is targeted to sell, possibly at substantially higher prices.
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Index: a compilation of the prices of several common entities into a single number.
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See also Capitalization-Weighted Index, Price-Weighted Index.
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Index Arbitrage: a form of arbitraging index futures against stock If futures are
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trading at prices significantly higher than fair value, the arbitrager sells futures and
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buys the exact stocks that make up the index being arbitraged; if futures are at a
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discount to fair value, the arbitrage entails buying futures and selling stocks.
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Index Fund: a mutual fund whose components exactly match the stocks that make
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up a widely disseminated index, such as the S&P 500, Dow-Jones, Russell 2000, or
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NASDAQ-100. See also Exchange-Traded Fund.
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Index Option: an option whose underlying entity is an index. Most index options are
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cash-based.
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Institution: an organization, probably very large, engaged in investing in securities.
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Normally a bank, insurance company, or mutual fund.
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Intermarket Spread: a futures spread in which futures contracts in one market are
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spread against futures contracts trading in another market. Examples: Currency
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spreads (yen vs. deutsche mark) or TED spread (T-Bills vs. Eurodollars). |