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