AON (All or None)-All or none of your stock trade will be filled. If you have AON in effect and you place an order to buy (or sell) 500 shares of stock, your order will be filled when all 500 shares are available. There will be no partial orders filled.
Ask price-The price at which a seller is offering to sell an option or stock.
Assignment- The notice that obligates the seller of an option to sell the underlying security (in the case of a call) or purchase the underlying security (in the case of a put) at the specified strike price.
At the money-When the stock price is the same as the option strike price. Example: If you are looking to buy or sell an option on a stock and the stock price is $10, you would be looking at the option's $10 strike price.
Bid price-The price at which a buyer is willing to buy an option or stock.
Call option (Call)
Called away or Called out-The seller of a call or put has been assigned: The option writer's account has been adjusted, the underlying security has been automatically sold (in the case of a call) or purchased (in the case of a put) at the specified strike price.
Contract-A contract can mean two things. 1) An option contract is equal to 100 shares of stock. Example: If you bought or sold 5 contracts of a stock that would be on 500 shares of stock. 2) The agreement between buyer and seller of an option. The contract will identify the stock, date of expiration, strike price and the option cost (premium)
Covered call
Exercise
Expiration date-The date when options become worthless. The expiration date for stock options is the Saturday after the third Friday of the expiration month
GTC (Good Til Cancel)- meaning the trade will stay in effect until the order is filled or the order is cancelled.
In the money
Intrinsic value
Last trading day
LEAPS
Margin-To buy stock by borrowing funds from your brokerage firm. What this means is, if you deposit $10,000 into your account, you will have $20,000 of buying power to purchase marginable securities. Options are not marginable.
Naked option (Uncovered)
Option (Stock option)
Out of the money
Premium-The price of an option, which the buyer of an option pays or the seller of an option receives for the rights conveyed by an option contract.
Put option (Put)
Strike price-The price paid for the stock in an option contract upon exercised, regardless of the market value of the stock at the time.
Uncovered call (Naked)
Underlying stock
Writer
Yield
Welcome to the “Main Street beats Wall Street”. This blog is for the stock investor/trader with experience in trading options. It can also be helpful for the ones with no experience with options who want to learn how options can be used to pursue your trading goals. As time goes on “Main Street beats Wall Street” will be giving many lessons from “Getting started” to you making your first trade. I also have an e-mail for any questions you might have from a lesson or a trade I posted,coachsjc@gmail.com. On “Main Street beats Wall Street”, I (the Coach) will post every trade I make. In recent years I've had years with over 400 trades. I will not post last years or last month’s trades, or hypothetical trades. ONLY REAL TRADES! I will post a trade when I get into a position and I will post the trade when I get out of that position. Along with my trade I will post my “RISK FACTOR”. The risk of my trade will be rated from 1 to 5, 1 being a low risk trade and 5 being a high risk trade. You will see if I get out making money or get out losing money. No Hoopla. “Main Street beats Wall Street” will show you how the people who live on Main Street throughout this country can be as good as the people who work on Wall Street. This blog is totally free, I am not selling books or tapes. I am only having fun and staying involved in something I love, the stock market. I make my money buying and selling stocks and options. If you put in a little time you too can make money; enough money to change your life forever.
T
