Glossary

There are many common terms that option traders use. A good many have already been used within the pages of this book. If you ran across an unfamiliar, option-specific term, perhaps the definition within this glossary would be useful.

Alert. A trader-established notification based on a preset value sent to inform the trader by e-mail and/or text messaging when a specified condition occurs. For example, if the price of the underlying security pierces an established price, the trader receives an alert either for information or in order to take action.

Ask Price. The buying price, or option premium, in dollars and cents, to be paid for each share of the underlying optionable security within an option contract (most often 100 shares per ...

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