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Options Made Easy: Your Guide to Profitable Trading, Second Edition by Guy Cohen

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Appendix II. Glossary

American Stock Exchange (AMEX)

Securities exchange that handles approximately 20% of all securities trades within the USA.

American-style option

An option contract that can be exercised at any time before the Expiration Date. Stock options are American-style.

Arbitrage

Where the simultaneous purchase and disposal of a combination of financial instruments is such that a guaranteed profit is made automatically.

Ask

The price that you buy at and the price that market makers and floor brokers are willing to sell at. The Ask stands for what the market makers and floor traders ask you to pay for the stock (or options or other instrument).

ATM (at the money)

Where the option Exercise price is the same as the asset price.

At the ...

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