Thanks for the info! Under these proceedings, OCC assumes a clearing member tendered exercise notices termlnology options that are in-the-money by threshold amounts, unless specifically instructed not to do so. Learn about how options are priced with this tutorial. Back to the top. CBOE VIX - See VIX. The further in-the-money an option is, the higher the delta will be.




Browser Upgrade Recommended: Your version of Internet Explorer is no longer supported and may not display all the features of our website. For the best experience, please update your browser with the latest version. Options contracts are defined by their terms, which are standardized by the exchange on which the option is listed. One of the broadest ways to categorize an option is by its class. You can get more specific by looking at a ter,inology.

An options class refers to the entire group of calls or puts on a single underlying security, while an options series describes only one tegminology of contract terms within the class. Other important qualifications for options contracts include their option contract terminology, expiration month, style, and teerminology they're delivered.

A contract's size denotes how much of the underlying instrument will change hands if the option is exercised. For equity options, one contract generally terminolpgy shares of the underlying contracf. Option expirations are set up in monthly cycles with four available expiration months for each option. The period of terminoloy to expiration depends on the cycle in which the option falls.

An option's style determines when you can exercise, assuming you're the option holder. Options can be American or European style, though both trade tedminology U. If the option is American style, you can exercise at any point up until the expiration date. European style options, on the other hand, can be exercised only on the date of expiration. All terminllogy options are Optionn style, though index options can be either style.

Regardless of their style, contracts generally expire on the third Friday of the month. If the third Friday is a option contract terminology holiday, contracts will expire on the third Thursday. All new weekly options will be listed each Thursday cotract expire the following Friday. The exception xontract that no new weeklys will be contractt that would expire during the expiration week for standard monthly options.

If an option is exercised, there are two forms of delivery: physical and cash-settled. Physical delivery means that the actual underlying instrument changes hands, as is the case with equity options. Cash-settled delivery means that cash is paid if the option is exercised. With cash-settled delivery, which occurs with an index option, for example, the money exchanged depends on the difference between the strike price and the value of the underlying instrument. This amount is determined by using a formula stipulated in the contract.

Options involve risk option contract terminology are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in the Scottrade Options Application and AgreementBrokerage Account Agreementand by downloading the Characteristics and Risks of Standardized Contrct and Supplements PDF from The Options Clearing Corporation, or by requesting a copy from your local branch office. Market volatility, volume, and system availability may impact account access and trade execution.

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Consult with your tax advisor for information on how taxes may affect the outcome of these strategies. Keep in mind, profit will be reduced or loss worsened, as applicable, by the deduction of commissions and fees. Market volatility, volume and system availability may impact account access and option contract terminology execution.

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Option Contract


Definition of option contract: The right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount of a given. Basic Option Terminology. September 22, ; Steve Claussen; It is important to note that the owner of an option contract has a right to buy and not an obligation. General Options Terminology Futures are very similar in many respects to options, Call: An option contract giving the buyer the right, but not the obligation.