DIRECTIONAL TRADE - A trade designed to take advantage of an expected movement in price. EARLY EXERCISE - A feature of American-style options that allows the owner to exercise an option at anytime prior to its expiration date. EQUITY OPTION - An option on shares of an individual common stock. Also known as a stock option. EUROPEAN STYLE OPTION - An option that can only be exercised on the expiration date of the contract. EXCHANGE TRADED- The generic term used to describe futures, options and other derivative instruments that are traded on an organized exchange. EXERCISE - The act by which the holder of an option takes up his rights to buy or sell the underlying at the strike price. The demand of the owner of a call option that the number of units of the underlying specified in the contract be delivered to him at the specified price. The demand by the owner of a put option contract that the number of units of the underlying asset specified be bought from him at the specified price. !28
EXERCISE PRICE- The price at which the owner of a call option contract can buy an underlying asset. The price at which the owner of a put option contract can sell an underlying asset. See STRIKE PRICE.
