Option trading liquidity


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Bid/Ask Spread - The difference between the prevailing bid and ask price. Generally, option contracts that are more liquid tend to have a tighter Bid/Ask Spread while option contracts that are less liquid and are thinly traded tend to have a wider Bid/Ask Spread. Read more about Options Prices.

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Gamma - The rate of change of a stock option's delta for one unit change in the price of the underlying stock. Read All About Options Gamma. Gamma Neutral - A position which has zero or near zero gamma value resulting in the delta value of the position staying stagnant no matter how its underlying stock moves. Read All About Gamma Neutral. Goldilock Economy - An economy that has steady growth and moderate inflation which is neither too heated nor cold and allows for stock market friendly monetary policies.

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Call Time Spread - Another name for Call Calendar Spread. An Options Trading strategy where long term call options are bought and near term call options are written in order to profit from time decay. Read the tutorial on Call Time Spread.

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Also to consider is the sentiment since the report, which was very favourable for the future outlook of the stock. I would say that I am now bullish on the stock.

Volatile Strategy- An option strategy that is constructed to profit no matter if the underlying stock moves up or down quickly. Read All About Volatile Option Strategies.

Position Trading - The use of options trading strategies in order to profit from the unique opportunities presented by stock options, such as time decay, volatility and even arbitrage to make safe, fixed, albeit lower profit. Read more about Options Trading Styles.

Implied Volatility - A measure of the volatility of the underlying stock, it is determined by using prices currently existing in the market at the time, rather than using historical data on the price changes of the underlying stock. Read more about Implied Volatility.
Incremental Return Concept - A strategy of covered call writing in which the investor is striving to earn an additional return from option writing against a stock position which he is targeted to sell-possibly at substantially higher prices.

Contango - A term originating from the oil market. This is when farther month implied volatility is higher than nearer month implied volatility. This is indicative of a normal market condition.

Underlying Asset - The security which one has the right to buy or sell via the terms of a listed option contract. An underlying asset can be any financial instrument on which option contracts can be written based on. Some examples are : Stocks, ETFs, Commodities, Forex, Index.


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