Strike Price
The strike price is a term that is typically associated with stock and index options trading and is quite simply the price at which a contract can be exercised. With regard to options, this will be the price that the option holder can buy or sell the underlying security at when it expires. Strike prices are fixed when a contract is bought or sold More...
Bear Straddle
A Bear Straddle is a derivatives option trading strategy that is considered speculative. A Bear Straddle Option position occurs when the options trader buys a Bear or short in both a Put and a Call of the same underlying More...
Option Collar
An Option Collar is considered to be a protective strategy that is usually used to lock in profit from an equity trade once it has experienced large gains. Options Collars are often entered upon by those who own More...
Butterfly Spread
A Butterfly Spread is a derivatives option trading strategy in which a position is net neutral. This is done by combining bull and bear spreads into what are called legs. The Butterfly Spread is set up by buying More...
Calendar Spread
A Calendar Spread is when derivatives such as futures and options are entered into a short and long position at the same time with the same underlying asset – but with the Calendar Spread they are entered into More...
Backwardation
Backwardation is a futures pricing term. A commodity pricing structure is considered to be in backwardation if as the commodity future contract reaches expiration the next corresponding similar commodity future More...
Above the Market
Above the Market refers to when a trader enters an order to purchase or sell a security at a price that is set above the current price of the security in the marketplace. These are a type of market order that is More...
Unwind a Position
The term Unwind a Position refers to when a trader systematically closes out a trade. A position usually refers to a series of long only or short only trades into the same security over a period of time. Positions More...
Unsystematic Risk
The term Unsystematic Risk refers to the trading risk that is associated with an individual company or industry sector. Because traders or portfolio managers are able to choose from the entire investment universe More...
Underlying Asset
An Underlying Asset, or Underlying, is the asset or security that the value of a derivative is based upon. In other words, an Apple Call option has an intrinsic value that is based upon the value of Apple (AAPL More...
