Seat |
Membership in a stock or futures exchange. |
Securities and Exchange Commission (SEC) |
Organization which regulates the securities markets in order to protect investors. |
Security |
An instrument which can be traded - eg stocks, bonds etc. |
Selling Short |
Selling a security which you don't actually own beforehand. You will eventually have to buy it back, hopefully at a reduced price, thus making profit. |
Series (options) |
Option contracts of the same class (underlying asset), same Strike price and same Expiration date. |
Shares |
Units of ownership in a company or organization. |
Short |
Selling a security which you don't actually own. |
Short Call |
A bearish strategy involving the short selling of call options. |
Short Call Butterfly |
A 3-leg direction-neutral, strategy, requiring high volatility, involving selling a low strike call, buying 2 middle strike calls with the same strike price and buying a higher strike call. |
Short Call Condor |
A 4-leg direction-neutral, strategy, requiring high volatility, involving selling a low strike call, buying 2 middle strike calls with different strike prices and buying a higher strike call. |
Short Call Synthetic Straddle |
A 2-leg direction-neutral, strategy, requiring low volatility, involving selling 2 ATM calls for every 100 shares (US stock options) bought, thereby replicating the risk profile of a Short Straddle. |
Short Combo |
A bearish strategy involving buying OTM puts and selling OTM calls in order to partially replicate a short stock position. |
Short Guts |
A low volatility strategy involving selling In the Money (ITM) Calls and ITM Puts. Low volatility is required, after the position is opened, to make this a profitable strategy. |
Short Iron Butterfly |
A direction neutral strategy constructed by combining a Bull Call Spread with a Bear Put Spread or by combining a narrow Long Strangle with a wider Short Strangle. |
Short Put |
A bullish strategy, selling put options usually OTM (with a strike price below the current stock price). |
Short Put Butterfly |
A 3-leg direction-neutral, strategy, requiring high volatility, involving selling a low strike put, buying 2 middle strike puts with the same strike price and selling a higher strike put. |
Short Put Condor |
A 4-leg direction-neutral, strategy, requiring high volatility, involving selling a low strike put, buying 2 middle strike puts with different strike prices and selling a higher strike put. |
Short Put Synthetic Straddle |
A 2-leg direction-neutral, strategy, requiring low volatility, involving selling 2 ATM puts for every 100 shares (US stock options) sold, thereby replicating the risk profile of a Short Straddle. |
Short Stock |
Selling shares short. |
Short Straddle |
A low volatility direction neutral trade that involves simultaneously selling a call and put at the same strike price and with the same expiration date. Requires the underlying asset to be rangebound to make the trade profitable. |
Short Strangle |
A low volatility direction neutral trade that involves simultaneously selling a call and put at different strike prices (the put strike being lower than the call strike - ie both OTM) and with the same expiration date. Requires the underlying asset to be rangebound in order to make the trade profitable. |
Short Synthetic Future |
Selling calls and buying the same amount of puts with the same strike and expiration date, effectively forming the same risk profile of shorting a stock but with no net credit. |
Short Selling |
Selling a security which you don't actually own beforehand. You will eventually have to buy it back, hopefully at a reduced price, thus making profit. |
Sigma |
Sigma is generally a term used to represent volatility. It is generally represented as a percentage. The term "one sigma level" refers to the actual change in the underlying asset price. |
Small-cap Stocks |
Smaller (and sometimes newer) companies which are associated with high risk and high potential rewards. Can be illiquid to trade with large bid-ask spreads. |
Speculator |
A trader who aims to make profit by correctly assessing the direction of price movement of the security. Generally distinguished from investors in that speculators are associated with short term directional trading. |
Spread |
The difference between the bid and ask of a traded security.A trading strategy which involves more than one leg to create a (hedged) position.A price spread is the difference between the high and the low of a price bar. |
Standard & Poor's (S&P) |
A company that rates stocks and bonds and produces and tracks the S&P indices. |
Stochastic |
A technical indicator, which is an oscillator based on the relationship of the open, high, low, close of price bars. |
Stock |
A share of a company's stock is a unit of ownership in that company. |
Stock Exchange or Stock Market |
An organised market where buyers and sellers are brought together to trade stocks. |
Stock Split |
Where a company increases the amount of outstanding stock, thus increasing the number of shares, reducing the value per share. Generally a sign that the stock has been rising and management's way of assisting the liquidity in the stock. |
Stop Orders |
Buy Stops: where the order price is specified above the current value of the security. Sell Stops: where the order price is specified below the current value of the security. |
Straddle |
A neutral trade that involves simultaneously buying a call and put at the same Strike price and with the same Expiration date. Requires the underlying asset to move in an explosive nature (in either direction) in order to make the trade profitable. |
Strangle |
A neutral trade that involves simultaneously buying a call and put at different Strike prices (the Put Strike being lower than the Call Strike - ie both OTM) and with the same Expiration date. Requires the underlying asset to move in an explosive nature (in either direction) in order to make the trade profitable. |
Strap |
A neutral to bullish trade that involves simultaneously buying two calls and a put with the same strike price and expiration date. Requires the underlying asset to move in an explosive nature (preferably upwards) in order to make the trade profitable. |
Strike Price (Exercise Price) |
The price at which an asset can be bought or sold by the buyer of a call or put option. |
Strip |
A neutral to bearish trade that involves simultaneously buying two puts and a call with the same strike price and expiration date. Requires the underlying asset to move in an explosive nature (preferably downwards) in order to make the trade profitable. |
Support |
A price threshold on a price chart which is thought to be difficult for the price to fall down through because of past price movements. |
Synthetic Call |
Buying a share and a put, or going long a future and a put, replicating the risk profile shape of a Long Call. |
Synthetic Put |
Buying a call and shorting a stock or future, replicating the risk profile shape of a Long Put. |
Synthetic Long Stock |
Buying a call and shorting a put. |
Synthetic Short Call |
Shorting a put and shorting a stock or future. |
Synthetic Short Put |
Shorting a call and buying a stock or future. |
Synthetic Short Stock |
Shorting a call and buying a put. |
Synthetic Straddle |
Combining stocks (or futures) with options to create a delta neutral trade. |