36 lines
2.5 KiB
Plaintext
36 lines
2.5 KiB
Plaintext
Glossary 917
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Program Trading: the act of buying or selling a particular portfolio of stocks and
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hedging with an offsetting position in index futures. The portfolio of stocks may be
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small or large, but it is not the makeup of any stock index. See also Index Arbitrage.
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Protected Strategy: a position that has limited risk. A protected short sale (short
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stock, long call) has limited risk, as does a protected straddle write ( short straddle,
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long out-of-the-money combination). See also Combination, Straddle.
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Public Book (of orders): the orders to buy or sell, entered by the public, that are
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away from the current market. The board broker or specialist keeps the public
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book. Market-makers on the CBOE can see the highest bid and lowest offer at any
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time. The specialist's book is closed ( only he knows at what price and in what quan
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tity the nearest public orders are). See also Board Broker, Market-Maker,
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Specialist.
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Put: an option granting the holder the right to sell the underlying security at a cer
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tain price for a specified period of time. See also Call.
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Put-Call Ratio: the ratio of put trading volume divided by call trading volume;
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sometime~ calculated with open interest or total dollars instead of trading volume.
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Can be calculated daily, weekly, monthly, etc. Moving averages are often used to
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smooth out short-term, daily figures.
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Ratio Calendar Combination: a strategy consisting of a simultaneous position of a
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ratio calendar spread using calls and a similar position using puts, where the strik
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ing price of the calls is greater than the striking price of the puts.
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Ratio Calendar Spread: selling more near-term options than longer-term ones
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purchased, all with the same strike, either puts or calls.
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Ratio Spread: constructed with either puts or calls, the strategy consists of buying a
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certain amount of options and then selling a larger quantity of out-of-the-money
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options.
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Ratio Strategy: a strategy in which one has an unequal number of long securities
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and short securities. Normally, it implies a preponderance of short options over
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either long options or long stock.
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Ratio Write: buying stock and selling a preponderance of calls against the stock that
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is owned. ( Occasionally constructed as shorting stock and selling puts.)
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Redemption Price: the price at which a structured product may be redeemed for
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cash. This is distinctly different from a "call price," which is the price at which an
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issue may be called away by the issuer. See also Call Price, PERCS, Structured
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Product. |