Resources
Glossary
35 terms. Type to filter.
- Ask
- The lowest price a seller will accept right now.
- Assignment
- When an option seller is required to fulfill the contract after the buyer exercises.
- At the money
- An option whose strike is at or very near the stock price.
- Bid
- The highest price a buyer will pay right now.
- Bid-ask spread
- The gap between the bid and the ask. A cost of trading.
- Call option
- A contract giving the buyer the right to buy 100 shares at the strike price by expiration.
- Candlestick
- A chart bar showing open, high, low and close for a period.
- Delta
- How much an option's price moves per $1 move in the stock.
- Dividend
- A cash payment some companies make to shareholders.
- EMA
- Exponential moving average. An average that weights recent prices more.
- ETF
- Exchange-traded fund. A basket of assets that trades like a stock.
- Expiration
- The date an option contract ends.
- Extended hours
- Trading before the 9:30 AM open or after the 4:00 PM close, Eastern.
- Gamma
- How fast an option's delta changes as the stock moves.
- Implied volatility (IV)
- The market's estimate of future movement, built into option prices.
- In the money
- A call with the stock above the strike, or a put with the stock below it.
- Intrinsic value
- How far an option is in the money.
- Limit order
- An order that only fills at your price or better.
- Liquidity
- How easily you can trade without moving the price.
- Margin
- Borrowing from a broker, or the collateral required for certain trades.
- Market cap
- Share price times shares outstanding. The market's value of a company.
- Market order
- An order that fills now at the best available price.
- Open interest
- The number of option contracts outstanding.
- Out of the money
- A call with the stock below the strike, or a put with the stock above it.
- The price of an option contract, quoted per share.
- Put option
- A contract giving the buyer the right to sell 100 shares at the strike price by expiration.
- RSI
- Relative strength index. A 0 to 100 momentum gauge, usually 14 periods.
- SMA
- Simple moving average. The plain average of closing prices over a set period.
- Stop-loss order
- An order that becomes a market order when a trigger price is hit.
- Strike price
- The price at which an option can be exercised.
- Support and resistance
- Price levels where a stock has tended to pause or reverse.
- Theta
- How much an option loses in value each day from time passing.
- Time value
- The part of an option's premium that is not intrinsic value.
- Vega
- How much an option's price changes when implied volatility changes.
- Volume
- The number of shares traded in a period.
Education only, not investment advice. Trading involves real risk of loss, including loss of everything you put in. See the full disclaimer.