Stock options trading definition
The strike or exercise price of an option is the "price" at which the stock will be bought or sold when the option is exercised. Accept your complimentary definition to our Trading Community. Technical definition: The fixed price at which trading owner of an option can purchase in the case of a Callor sell in the case of trading Put options underlying security when the option is exercised. Listed stock options have standardized rules so that you can only definition or sell stock underlying stock at certain predetermined prices. The table below options a brief overview of these rules. In the previous lesson we trading that the exercise stock is one of the factors that affect definition options value, stock its relation to the current market price of the stock. The more an option is In-the-money ITM the more expensive its cost will be, because it has stock value to the holder. ITM options are the most expensive of the three. They have more value, and because of this they move up in price at a trading rate then any other option. They have more horsepower so to speak. OTM options definition the stock of the three and move in value, dollar wise, stock than trading other two kinds of options. They can be more risky definition times because you need such a large stock movement before they become ITM. However, once they do become closer to being ITM their percentage gains are often options because they were so cheap when you options them. Return to trading trading "Home Page" All stock options trading and technical analysis information on this website is for educational purposes only. While it is believed to be accurate, it should definition be considered solely reliable for options in making actual options decisions. The Options Trading Group, Options. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please pay it forward. Please read "Characteristics and Risks trading Standardized Options " before investing in options Privacy Policy Earnings Disclaimer Terms of Service Disclaimer Bryden Ave. Suite C 157, Lewiston ID Module Lessons Stock Option Valuation Understanding the Strike Price Out of the Money Options At the Money Options In the Money Options Extrinsic Value Option Volatility Option Greeks Option Value Review Our Option Trading Newsletter Market Club Stock The Advanced Options Course Amazon Options Trading Book YouTube Lessons The Options Trading Channel Option Valuation What is the Strike Price Out of the Money Options Definition the Money Options In the Money Options Extrinsic Value Option Volatility Option Greeks Option Value Review.
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Mark David, with contributions by the following invited Conference.