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vocabulary

Vocabulary terms

Feel free to add terms you find useful

  • Call a contract allowing the holder to purchase 100 shares of a security for a fixed agreed upon price at any point until it expires.
  • Put a contract allowing the holder to sell 100 shares of a security for a fixed price at any point until it expires.
  • Strike the agreed upon price for an option contract.
  • Expiry the expiration date of the contract.
  • Underlying the security that the contract refers to.
  • Implied Volatility a forward looking one-year standard deviation of underlying price movement implied by the option price https://www.tradeking.com/education/options/what-is-implied-volatility
  • Delta change in the per-share options price for a one dollar move in the underlying security price. (think Dollar)
  • Theta change in the per-share options price for each trading day that passes. (think Time)
  • Vega change in the per-share options price for a 1% change in the implied volatility. (think Volatility)
  • Rho change in the per-share options price for a 1% change in the interest rate. (think Rate)
  • Gamma the change in delta for a one dollar move in the underlying. (think Curvature (the third letter of the greek alphabet))
vocabulary.txt · Last modified: 2015/04/17 15:28 by andynovo