35 lines
2.3 KiB
Plaintext
35 lines
2.3 KiB
Plaintext
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. |