P - S
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option - An option contract that gives its owner the right but not the
obligation to sell the underlying assets at the strike price for a
Put Call Ratio - The
Ratio of the volume of put options traded to the volume of
Call options traded, which is used as an indicator of
Investor sentiment (bullish or bearish).
Put-call parity relationship - The relationship between the price of a
put and the price of a
Call on the same
Underlying security with the same
Expiration date, which prevents
Arbitrage opportunities. Holding the underlying
Stock and buying a put will
Deliver the exact payoff as buying one call and investing the
Present value (PV) of the
Exercise price. The call value equals C = S + P - PV(k).
Short - One who has sold a
Contract to establish a
Market position and who has not yet
Closed out this position through an offsetting purchase; the
opposite of a long position.
Stock index option
- An option in which the
Underlying is a
Common stock index.
Stock option - An option whose underlying
Asset is the
Common stock of a corporation.
Strike index - For a
Stock index option, the index value at which the buyer of the option
can Buy or
Underlying stock index. The
Strike index is converted to a dollar value by multiplying by the
Striking price - The price at which an option can be
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