Options Flashcards

1
Q

Buyers - Calls

A

Have the right to buy
Want the stock price to go up
Bullish

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2
Q

Buyers - Puts

A

Have the right to sell
Want stock price to fall
Bearish

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3
Q

Sellers - Calls

A

Have the obligation to sell
Want stock price to fall
Bearish

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4
Q

Sellers - Puts

A

Have the obligation to buy
Want stock price to rise
Bullish

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5
Q

What Does each part of this order this mean:

BUY 1 XYZ JUNE 50 CALL @ 7

A
  • Action to be taken
  • # of contracts (100 shares per contract)
  • Security Name
  • Expiration Month
  • Stroke Price
  • type of options call or put
  • premium per share
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6
Q

Calls - in the money

A

Stock price is higher than the strike price

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7
Q

Calls - at the money

A

Stock price is equal to the strike price

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8
Q

Calls - out the money

A

Stock price Less than Strike Price

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9
Q

Puts - in the money

A

Stock Price is lower than the strike price

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10
Q

Puts - at the money

A

Stock price is equal to the strike price

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11
Q

Puts - out the money

A

Stock price higher than the strike price

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12
Q

Intrinsic Value

A

The in the money amount

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13
Q

Time Value

A

The amount by which the premium exceeds the intrinsic value

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