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		Equity Trading Terms
At The Market		Describes an order to purchase or sell securities at the best price currently available.
Bears		Those who believe stock prices will decline. A bear market is one in which prices trend downward.
Bid		The bid is the highest price a buyer will pay for a security; the offer is the lowest price at which a security is offered by sellers.
Blocks		Large holdings or stock transactions, usually 10,000 shares or more.
Bulls		Those who believe the market will rise. A bull market is rising.
Common Stock		A security representing ownership interest in a corporation, carrying the right to dividends subordinate to all other stock of the corporation.
Day Orders		Orders to buy or sell that expire if not executed on the same day entered.
Floor Brokers		Exchange members who execute buy and sell orders on the floor for customers.
Limit Orders		Orders to buy or sell a stated amount of a security at a specific price or, if obtainable, a better price.
Local Listing		A "local" listing is one where the company is neither seeking, nor has already obtained, a listing on the NYSE or the AMEX.
Odd Lots		Amounts of stock less than the established unit of trading, usually 100 shares.
Open (GTC) Order		A standing order to buy or sell, valid until either canceled or executed. GTC orders usually expire within six months, depending upon the brokerage's policy. GTC means "Good Till Canceled."
Primary Markets		The primary exchange on which a listed stock trades.
Round Lots		Units of trading, usually 100 shares.
Seats		Traditional description of memberships on an exchange.
Stops		Orders instructing brokers to buy or sell at the market if and when a stock's price rises or falls to a certain price.
Tick		Direction the price of a stock moved on its last sale. An up-tick means the last trade was at a higher price than the one before it, and a down-tick means the last sale price was lower than the one before it. A zero-plus tick means the transaction was at the same price as the one before, but higher than the nearest preceding different price.
Tickers		Electronic display of the prices and volumes of stock trades worldwide, usually updated within 90 seconds after each transaction.

		Options Trading Terms
American-Style Option		An option contract that may be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options are American-style.
Assignment		The receipt of an exercise notice by an option writer (seller) that obligates him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.
At-The-Money		An option is at-the-money if the strike price of the option is equal to the market price of the underlying security.
Call		An option contract that gives the holder the right to buy the underlying security at a specified price for a certain, fixed period of time.
Capped-Style Option		A capped option is an option with an established profit cap or cap price. The cap price is equal to the option's strike price plus a cap interval for a call option or the strike price minus a cap interval for a put option. A capped option is automatically exercised when the underlying security closes at or above (for a call) or at or below (for a put) the option's cap price.
Class of Options		Option contracts of the same type (call or put) and style (American, European or Capped) that cover the same underlying security.
Closing Purchase		A transaction in which the purchaser's intention is to reduce or eliminate a short position in a given series of options.
Closing Sale		A transaction in which the seller's intention is to reduce or eliminate a long position in a given series of options.
Covered Call Option Writing		A strategy in which one sells call options while simultaneously owning an equivalent position in the underlying security.
Covered Put Option Writing		A strategy in which one sells put options and simultaneously is short an equivalent position in the underlying security.
Derivative Security		A financial security whose value is determined in part from the value and characteristics of another security, the underlying security.
Equity Options		Options on shares of an individual common stock.
European-Style Option		An option contract that may be exercised only during a specified period of time just prior to its expiration.
Exercise		To implement the right under which the holder of an option is entitled to buy (in the case of a call) or sell (in the case of a put) the underlying security.
Exercise Price		See Strike price.
Exercise Settlement Amount		The difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered, multiplied by the index multiplier.
Expiration Cycle		An expiration cycle relates to the dates on which options on a particular underlying security expire. A given option, other than LEAPS, will be assigned to one of three cycles, the January cycle, the February cycle or the March cycle (See Appendix). At any point in time, an option will have contracts with four expiration dates outstanding, the two near-term months and two further-term months.
Expiration Date		The day in which an option contract becomes void. All holders of options must indicate their desire to exercise, if they wish to do so, by this date.
Expiration Time		EXPIRATION TIME: The time of day by which all exercise notices must be received on the expiration date.
Hedge		A conservative strategy used to limit investment loss by effecting a transaction which offsets an existing position.
Holder		The purchaser of an option.
In-The-Money		A call option is in-the-money if the strike price is less than the market price of the underlying security. A put option is in-the-money if the strike price is greater than the market price of the underlying security.
Intrisic Value		The amount by which an option is in-the-money (see above definition).
Leaps		Long-term Equity AnticiPation Securities, or LEAPS, are long-term stock or index options. LEAPS, like all options, are available in two types, calls and puts, with expiration dates up to three years in the future.
Long Position		A position wherein an investor's interest in a particular series of options is as a net holder (i.e., the number of contracts bought exceeds the number of contracts sold).
Margin Requirement		The amount an uncovered (naked) option writer is required to deposit and maintain to cover a position. The margin requirement is calculated daily.
Naked Writer		See Uncovered call writing and Uncovered put writing.
Opening Purchase		A transaction in which the purchaser's intention is to create or increase a long position in a given series of options.
Opening Sale		A transaction in which the seller's intention is to create or increase a short position in a given series of options.
Open Interest		The number of outstanding option contracts in the exchange market or in a particular class or series.
Out-Of-The-Money		A call option is out-of-the-money if the strike price is greater than the market price of the underlying security. A put option is out-of-the-money if the strike price is less than the market price of the underlying security.
Premium		The price of an option contract, determined in the competitive marketplace, which the buyer of the option pays to the option writer for the rights conveyed by the option contract.
Put		An option contract that gives the holder the right to sell the underlying security at a specified price for a certain fixed period of time.
Secondary Market		A market that provides for the purchase or sale of previously sold or bought options through closing transactions.
Series		All option contracts of the same class that also have the same unit of trade, expiration date and strike price.
Short Position		A position wherein a person's interest in a particular series of options is as a net writer (i.e., the number of contracts sold exceeds the number of contracts bought).
Strike Price		The stated price per share for which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of the option contract.
Time Value		The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract. Time value is whatever value the option has in addition to its intrinsic value.
Type		The classification of an option contract as either a put or a call.
Uncovered Call Option Writing		A short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts.
Uncovered Put Option Writing		A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put.
Underlying Security		The security subject to being purchased or sold upon exercise of the option contract.
Volatility		A measure of the fluctuation in the market price of the underlying security. Mathematically, volatility is the annualized standard deviation of returns.
Writer		The seller of an option contract.