Options trading jargon.

Market On Close Order: Read more about the Buy to Close Order.

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A type of spread that's created using multiple contracts with different expiration dates, but with the same strike price. IV can only be determined by knowing the other five variables and solving for it using a model.

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See Market Stop Order. A type of broker that offers expert advice and professional guidance in addition to executing orders for a client; they typically charges higher fees and commissions. An option is considered to be out-of-the-money if exercising the rights associated with the option contract has no obvious benefit for the contract owner.

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Learn how to use a Bear Ratio Spread. The process of incurring losses when closing an existing position. The price at which an option can be sold.

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Financial Instrument: A style of analysis used to predict the future price movements of a financial instrument by studying historical data relating to the volume and price. Stock that has options based on it.

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A style of analyzing the value of a financial instrument by studying certain specific factors that relate to the true value of that security. Part time work from home japan Value: Discount Option: A pricing model that is based on factors that include the strike price, the price of the underlying security, the length of time until expiration, and volatility.

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Writing a contract is going short on that option. A type of option where the underlying security is a specific currency. Learn how to use a Strip Straddle. The right to buy or sell a specified underlying security at a fixed strike price within a specified period of time.

Margin has multiple meanings depending on the context that it's being used in. One of the Greeks, the theta value measures the theoretical rate of time decay of that option. At the Money Option: Calendar Strangle: Learn how to use a Reverse Iron Albatross Spread.

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Out of the Money Option: Put Ratio Backspread: See Legging; the process of entering a position using legging. An option that is trading for less than its intrinsic value. A type of spread that's created using multiple contracts with different strike prices, but it has the same expiration dates.

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Learn how to use a Reverse Iron Condor Spread. A trading method that involves using a third party to select your trades and having your broker automatically execute them. Real time quotes that are provided by exchanges detailing the exact bid ask spreads being offered by market makers.

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Learn how to use a Short Gut. It implies ownership of something.

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This is a simple strategy that can be used when price of the underlying security is volatile, but the inclination occurs when the move will be to the upside. This typically involves writing a higher amount of options than is being bought, but the ratio can be either way around.

A type of forex trade calculator that's used to automatically close a position when a specified price is reached. A detailed plan that a trader would prepare to lay out how they'll approach their trading.

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Put Call Parity: Links to non-Ally websites The technical jargon associated with option trading can often make it seem intimidating. American Style Option: Long Strangle: