All Stock Options consist of two opposing sides; named ‘CALL’ & ‘PUT’ options.  Each individual option has several key components that we will review here. It is of the utmost importance that you clearly understand the terminology presented on this page before placing an option order within your brokerage account. Below is a brief explanation of some of the more commonly used option terms with an additional link to a more detailed look at each definition.

Call Option Definition:

When held or purchased (i.e.  Long Call Position), 1 Call Option contract gives you (the holder) the right to buy 100 shares of the underlying security (the stock) from the option writer (i.e. referred to as, the short call position) at the given strike price (i.e. 10, 15, 20, 25…) on or BEFORE a predetermined date; the option expiration day (abbreviated as OpEx) no matter what the current price of the underlying security is trading at during that day.  Call & Put options are traded and priced independently from each other (according to the option Greeks) over several different months (i.e. DEC09, JAN10, APR10, JUL10, JAN11) using many different strike prices.

Puts: (write brief description with detailed link)

LEAPs: (write brief description with detailed link)

The Greeks: (write brief description with detailed link)

Spreads: (write brief description with detailed link)