|
|
Stock option |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Stock optionAn option whose underlying asset is the common stock of a corporation.Stock option Similar MatchesOption premiumOption premiumThe 'price' of the option, paid by the buyer. Option Pricing CurveOption Pricing CurveA graphical representation of the projected price of an option at a fixed point in time. It reflects the amount of time value premium in the option for various stock prices, as well. The curve is generated by using a mathematical model. The delta (or hedge ratio) is the slope of a tangent line to the curve at a fixed stock price. See also Delta and Hedge Ratio OptionOptionAn option takes the form of a contract that gives its holder the right but not the obligation to buy or sell a fixed number of shares (or other instrument) at a fixed price on or before a given date.A CALL option is an option to BUY shares. Call options generally rise in price if the underlying shares rise in price (and vice versa).A PUT option is an option to SELL shares. Put options generally rise in price if the underlying shares fall in price (and vice versa).Note that the holder has a right, not an obligation. This means that he can decide to exercise the option to buy or sell the shares if he wants, but he doesn't have to if he decides that it is not in his interests to do so. The main criterion for that decision is whether the exercise price of the option is higher or lower than the current price of the underlying share.Options can exist over a number of different classes of asset including property, chattels, and most types of financial assets. For most people, they relate to ordinary shares, and the options are called equity options. In London they are traded on LIFFE. Call optionCall optionAn option which gives the holder the right but not the obligation to purchase a stated quantity of the underlying instrument (for example shares, indices, commodities etc) at a specified price on or before a given date. Asian optionAsian optionOption based on the average price of the underlying assets during the life of the option. Further SuggestionsCovered optionFLEX Options traditional options Registered options trader Exercising the option Transferable Stock Options Compound option Lapsed option Switching options Kuala Lumpur Options and Financial Futures Exchange (KLOFFE) Multi option financing facility Options contract Option account Non Equity Option Knock out option Out of the money option Optional payment bond Currency call option Binomial option pricing model Option writer Greenshoe option Liquid yield option note (LYON) Call an option Gnma (government National Mortgage Association) Options Irrational call option |
|
|
|