Welcome To Options Trading For Newbies



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Options Trading For Newbies
COX-ROSS-RUBINSTEIN - A binomial option-pricing model invented by John Cox, Stephen Ross, and Mark Rubinstein.
CREDIT - The amount you receive for placing a trade. A net inflow of cash into your account as the result of a trade.
CYCLE - See EXPIRATION CYCLE.
DAY ORDER - An order to purchase or sell a security, usually at a specified price, that is good for just the trading session on which it is given. It is automatically canceled on the close of the session if it is not executed.
DEBIT - The amount you pay for placing a trade. A net outflow of cash from your account as the result of a trade.
DELTA - Measures the rate of change in an option’s theoretical value fora one-unit change in the underlying. Calls have positive Deltas and puts have negative Deltas.
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Delta for non-futures based options is the dollar amount of gain/loss you should experience if the underlying goes up one point. For futures-based options, Delta represents an equivalent number of futures contracts times 100.
DELTA NEUTRAL - A strategy in which the Delta-adjusted values of the options plus any position in the underlying) offset one another.

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