Exercise price stock options definition



You should not risk more than you afford to lose. This article discusses the pros and cons of stock options vs shares for employees of Canadian — private and public — companies. Area Pattern A pattern of sideways price movement that follows a stalled uptrend or downtrend of a stock or commodity. Employees typically must wait for a specified vesting period to pass before they can exercise the option and buy the company stock, because the idea behind defihition options is to align incentives between the employees and shareholders of a company. This benefit is taxed as regular employment income.




Abandoned Baby A rare reversal pattern characterized by a gap followed by a Dojiwhich is then followed by another gap in the opposite direction. The shadows on the Doji must completely gap below or above the shadows of the first and third day. Above the Market A limit order to buy or sell a security for a specified price that is higher than the current market price. If the market does not reach the specified price, the order will go unfilled. Absolute Stovk Index Developed by Norman Fosback, the ABI is equal to the absolute value of the difference between the advancing issues and the declining issues.

It shows how much activity and volatility is taking place on the New York Stock Exchange while totally ignoring the price direction. Absolute Price Oscillator APO An indicator based on the difference between two exponential moving averagesand is expressed in absolute terms. Also known as the MACD indicatorthe APO is calculated by subtracting the longer EMA from the shorter EMA.

See ChartSchool article on Price Oscillators. Accredited Investor Term used by SEC in Regulation D of private placements. Accrued Interest The amount of interest that has been earned since the last interest payment date. When a bond trades, the buyer pays the seller the accrued interest - a pro rata portion of the next interest payment, which will be paid to the buyer of the bond. Accumulation The act of buying more shares of a security without causing the price to increase significantly.

After a decline, a stock may start to base and trade sideways for an extended period. While this base builds, well-informed traders and investors may seek to establish or increase existing long positions. In that case, the stock is said to have come under accumulation. Accumulation Distribution Line A momentum indicator that relates price changes with volume.

It relates the closing price to the range of prices H - L. The closer the close is to the high, the more volume is added to the cumulative total. See ChartSchool article on Accumulation Distribution Line. AD Line See Advance Decline Line. Advance Decline Line One definitlon the most widely used indicators to measure the breadth of a stock market advance or decline.

The AD exercise price stock options definition tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal. See ChartSchool article on the Advance-Decline Line. Advance Decline Ratio The ratio of advancing issues over declining issues. Taking the moving average of the AD ratio will smooth it so it can be used as an overbought and oversold indicator.

Advancing A market stage of a stock that is characterized by an uptrend with subsequently higher highs and higher lows. Advancing Declining Issues A market momentum indicator using the advancing issues and the declining issues. It subtracts the declining issues from the advancing ones and is usually smoothed to make it a good overbought oversold indicator. Adverse Excursion The loss attributable to price movement against the position in any single trade.

ADX See Average Directional Index. After Hours Any trade posting, adjusting, or changes made by specialists or member firm after the official close of the market. Against Actuals A transaction generally used by two hedgers who want to exchange futures or cash positions. Aggregate Exercise Price Term in security options: the exercise strike price times the number of securities involved in the contract. Exception: GNMA options and T-Bill, T-Note, and T-Bond options, in which the aggregate exercise price is the strike price times the face value of the underlying contract.

Commodities used include Wheat, Red Wheat, Corn, Soybeans, Exercie, Sugar, Coffee, Cocoa, and Orange Juice. All or None A type of order issued to a broker by a buyer or seller to fill the order completely or not at all. There are no partial transactions. Alpha A measure of the residual risk stodk an investor takes for investing in a fund rather than a market index. It represents the difference between a stoock fund's actual performance and the performance that would be expected based on the level of risk taken by the fund's manager.

If a fund produced the expected return for the level of risk assumed, the fund would have an Alpha of zero. A positive Alpha indicates the manager produced a return greater than expected for the risk taken. A negative Alpha indicates the manager has not adequately rewarded investors for the risks taken. American Depository Receipt ADR : Securities issued by commercial pruce that represent the shares of a foreign company. ADRs trade just like normal stocks on various US stock exchanges.

Their performance usually parallels that of the parent company on its domestic exchange. The market capitalization of each company is used to construct the index. Amex Index Options The American Stock Exchange trades put and call options based exdrcise a number of sector, industry and international indices. These indices cannot be bought or sold like stocks, their price movements are simply used for trading options. Amortization The paying off of debt in regular installments over a period of time.

Analysis of Variance A technique used to improve the analysis over regression techniques. It can be used for identifying relationships between exercise price stock options definition and criterion variables, whether the predictor variables are quantitative or qualitative in nature. Most analysts specialize in a single exercuse or business sector. Andrew's Pitchfork Developed by Alan Andrews, this concept that uses three parallel lines drawn from three points that you select. The points selected to begin the pitchfork are usually three consecutive major peaks or troughs.

The three parallel lines extending out to the right are used as normal support and resistance points. Announcement Date The date on which a company first publicly announces an impending stock split. Annual Esercise Popular term for the yearly report made by a company to its stockholders. Stodk law requires all registered corporations to make such reports. They usually contain a balance sheet, an income statement, a list of changes in exercide earnings, and how income of the corporation was used.

Annualized The translation of periods of less than a year into an annual rate for comparative purposes. To annualize quarterly figures, you multiply them by four. Arbitrage The simultaneous buying and selling of securities to take advantage of price discrepancies. Arbitrage opportunities usually surface after a takeover offer. Area Pattern A pattern of sideways price prive that follows a stalled uptrend or downtrend of a stock or commodity.

Some of these patterns triangles, flags, wedges etc. Arithmetic Linear Scaling On an Arithmetic Linear scale chart, the spacing between each point on the vertical scale is identical. See ChartSchool article on price scaling. Arms Index TRIN A market indicator showing the ratio between the average volume of declining stocks and the average volume of advancing stocks.

Generally, a rising TRading INdex is bearish and a falling TRIN is bullish. See ChartSchool article on Arms Index. Aroon An indicator system that can be definitjon to determine whether or not a stock is trending and the strength of its trend. The Aroon Oscillator signals an upward trend when it rises above zero and a downward trend when it falls below zero. The farther away the oscillator is from the zero line, the stronger the trend. See ChartSchool article on Aroon. Aroon Oscillator An indicator called the Aroon Oscillator can be constructed by subtracting Aroon down from Aroon up.

See ChartSchool article on Aroon Oscillator. Ascending Trend Channel An ascending line that connects the bottoms of the down waves and is parallel to a trendline. The ascending channel line and the trendline form borders on an uptrend. Ascending Triangle A sideways price pattern between two exerckse trendlines in which the lower line is rising while the upper line is flat.

Etock is generally a bullish pattern. See ChartSchool article on Ascending Triangle Exercise price stock options definition. A buy order placed at the market will usually be filled at the current asking offer price. The ask price is usually greater than the bid price. At the Money An option whose strike price is equal to the price of the underlying security. Average Directional Index ADX Part sotck the Directional Movement Indicator system developed by J.

See ChartSchool article on Average Directional Index. Average True Range ATR An indicator that measures a security's volatility. High ATR values indicate high volatility and may be an indication of panic selling or panic buying. Low ATR readings indicate sideways movement by the stock. See ChartSchool article on Average True Range. Market data provided by: Interactive Data Corporation.

Commodity and historical index data provided by: Pinnacle Data Corporation. The iq binary option login provided by oparty.ru, Inc. Trading and investing in financial markets involves risk. You are responsible for your own investment decisions. The shadows on the Doji must completely gap below or above the shadows of the first and third day.

If the market does not reach the specified price, the order will go unfilled. It shows how much activity and volatility is taking xefinition on the New York Stock Exchange while totally ignoring the price direction. See ChartSchool article on Price Oscillators. When a bond trades, the buyer pays the seller the accrued interest - a pro rata portion of the next interest payment, which will exefcise paid to the buyer of the bond.

In that case, the stock is said to have come under accumulation. See ChartSchool article on Accumulation Distribution Line. AD Line See Advance Decline Line. See ChartSchool article on the Advance-Decline Line. Taking the moving average of the AD ratio will smooth it so it can be used as an overbought and oversold indicator. Advancing A market stage of a stock that is characterized by an uptrend with subsequently higher highs and higher lows. It subtracts the declining issues from the advancing ones and rpice usually smoothed to make it a good overbought oversold indicator.

Adverse Excursion The loss attributable to price movement against the position in any single trade. After Hours Any trading options in turbulent markets pdf download posting, adjusting, or changes made by specialists or member firm after the official pice of the market. Against Actuals A transaction generally used by two hedgers who want to exchange futures or cash positions.

Exception: GNMA options and T-Bill, T-Note, and T-Bond options, in which the aggregate exercise price is the strike price times the face value of the underlying contract. Commodities used include Wheat, Red Wheat, Corn, Soybeans, Cotton, Sugar, Coffee, Cocoa, and Orange Juice. There are no partial transactions. AMEX The term used for the American Stock Exchange.

The market capitalization of each company is used to construct the index. These indices cannot be bought or sold like stocks, their price movements are simply used for trading options. Amortization The paying off of debt in regular installments over a period of time. It can be used for identifying relationships between predictor and criterion variables, whether the predictor variables are quantitative or qualitative in nature.

Most analysts specialize in a single exercise price stock options definition or business exercise price stock options definition. The three parallel lines extending out 10 forex strategy pdf the right are used as normal support and resistance points. Announcement Date The date on which a company first publicly announces an impending stock split. They usually contain a balance sheet, an income statement, a list of changes in retained earnings, and how income of the corporation was used.

To annualize quarterly figures, you multiply them by four. Arbitrage opportunities usually surface after a takeover offer. See ChartSchool article on price scaling. See ChartSchool article on Arms Index. See ChartSchool article on Aroon. See ChartSchool article on Aroon Oscillator. The ascending channel line and the trendline form borders on an uptrend. See ChartSchool article on Ascending Triangle Continuation. The ask price is usually greater than the bid price. Assets Any possessions that have value in an exchange.

At the Money An option whose strike price is equal to the price of the underlying security. See ChartSchool article on Average Directional Index. See ChartSchool article on Average True Range. Sign up for our FREE twice-monthly ChartWatchers Newsletter! Don't Ignore This Chart.




What is Cashless Exercise? definition and meaning


Options Strike Price - Avoid the Typical Amateur Mistake of Picking the Wrong Option

In finance, an option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or.
What does ' Exercise ' mean. Exercise means to put into effect the right specified in a contract. In options trading, the option holder has the right, but not the.
op·tion (ŏp′shən) n. 1. The act of choosing; choice: Her option was to quit school and start her own business. 2. The power or freedom to choose: We have the.

Add a comment

Your e-mail will not be published. Required fields are marked *