Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.
Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.
Search the Community
Showing results for tags 'call options'.
Found 8 results
CBOE Nasdaq Volatility Index - VXN Definition
Igor posted a topic in Trading DictionaryBy straddling the asset's market price, the long straddle is an option trade type that is used to benefit from up or down movements of the asset. So whether the asset price rises or falls, the long straddle is a winner. Used when the trader is sure that the asset will move in a direction, but is unsure of which direction.
Cash-or-Nothing Call Definition
Igor posted a topic in Trading DictionaryLock-up options are usually priced in such a way as to deter unwanted buyers and attract only the buyers that the option owners want to sell to.
Call Premium Definition
Igor posted a topic in Trading DictionaryIn the ladder option, the full payout is not hinged on one outcome or one strike price. Rather, the payout is broken up and attached to several strike prices, such that the attainment of a strike delivers some degree of payout. This ensures that the trader is guaranteed some measure of profit if even one of the pre-set strike prices is achieved.
Call Option Definition
Igor posted a topic in Trading DictionaryA knock-in option stays latent until when the price has exceeded or reached a pre-determined price level. Then the option now begins to function as a true option. If that price is never reached, then the knock-in option is never activated.
Call On A Call Definition
Igor posted a topic in Trading Dictionary"The iron condor is an option type with limited profit or loss potential. This strategy is mainly used when a trader has a neutral outlook on the movement of the underlying security i.e. the trader expects the asset to stay range-bound for the duration of the trade.
Igor posted a topic in Trading DictionaryThe two options located at the middle strike create a long or short straddle depending on whether the options is being bought or written. The "wings" of the butterfly (the options above and below the middle strike) are created by the purchase or sale of a strangle. This strategy is used to protect the trader's position against dramatic rises and falls in price.
Bull Spread Definition
Igor posted a topic in Trading DictionaryAlso called a calendar spread, this option strategy hopes to take advantage of different moves of the asset at various times. For instance, an asset may be bearish at a certain time, and then bullish thereafter. By using a calendar spread, the trader can benefit from the different conditions for the asset as a result of the different expiry times set for the two sets of options trades.
Average Price Call Definition
Igor posted a topic in Trading DictionaryThis is used as a hedging strategy. As an example, if a trader purchased an average price put contract of 1,000 barrels of crude when the product is $70 with a view to benefit from rising prices, and the price on expiration is $75, then the average price put payout will be ($75 - $70) X 1,000 barrels = $5,000 (less commissions payable on the trade). If the price on expiration was say $67, then the payout for the trade is zero.