Options are an exciting way to maximize your efforts in the markets but they do come with unfamiliar terminology which may seem confusing at first. Watch the videos below to get a better understanding of the jargon and more comfortable using it in class and in your trading.
Term used to describe an option’s price.
Term used to describe “in-the-money” value.
Term used to describe the Time value.
Term used to describe the relative value of the option’s strike price to the underlying’s current price.
Term used to describe what automatically happens if options is held to expiration.
A description of the factors used to calculate an option’s price. NOTE: Vega is the mechanism by which the market makers inflate or deflate the value of time.