Options Key Terms Flashcards
1
Q
Call
A
a right to buy
2
Q
put
A
a right to sell
3
Q
Strike Price
A
agreed price at which asset will be bought / sold
4
Q
Holder
A
Buyer or long of the option
5
Q
Writer
A
Seller or short of the option
6
Q
Premium
A
Price paid by the holder to the writer to acquire the rights
7
Q
Expiry Style - European
A
On the expiry date only
8
Q
Expiry style - American
A
On any date up to expiry and including the expiry
9
Q
Long
A
Buying to establish a position
10
Q
Short
A
Selling to establish a position
11
Q
Covered
A
Short seller has underlying asset to deliver
12
Q
Naked (Uncovered)
A
Short seller does not have underlying asset to deliver
13
Q
OTC
A
Over the Counter
14
Q
Break Even point of a put option
A
Exercise Price - Premium
