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One-way option |
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One-way optionRefers to the situation of a speculator on an exchange market with a pegged exchange rate. If there is doubt about the viability of the peg, the speculator can sell the currency short knowing that there is only one direction (one way) that the currency is likely to move. Therefore there is little risk associated with such speculation.Similar MatchesIntrinsic value of an optionIntrinsic value of an optionThe amount by which an option is in the money. An option that is not in the money has no intrinsic value. Asian optionAsian optionOption based on the average price of the underlying assets during the life of the option. In the money optionIn the money optionAn option that has value. Share optionShare optionAn incentive given to company directors and employees to promote loyalty and commitment.The employee is offered an option to buy shares in the company at a fixed price, at or below the then market price. The option specifies the time during which the employee can exercise the right, and often this will be a period of years. If the company's share price rises in that period, the employee can exercise the option, acquire the shares at the option price, and immediately sell them for a capital gain. If the company's shares do not rise, the employee may take the view that the option is not worth exercising. The option mechanism thus gives the employee discretion.Tax liabilities may be reduced on gains where schemes are approved by the Inland Revenue. Indexed Stock OptionsIndexed Stock OptionsOptions that have an exercise price which may fluctuate above or below market value at performance options in that the exercise price of indexed options typically remains variable until the option is exercised. Further SuggestionsOptional dividendsettlement options equity options Virtual currency option option writer Listed option Option price Index and Option Market (IOM) Conventional option Out of the money option Split fee option Arbitrage free option pricing models Registered options trader plain vanilla option/warrant Index option Class of Options Currency call option result of exercising option Options contract multiple Put option Switching options Option not to deliver Settlement options Call option Sellers option |
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