Welcome To Options Trading For Newbies


IMMEDIATE-OR-CANCEL (IOC) ORDER



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Options Trading For Newbies
IMMEDIATE-OR-CANCEL (IOC) ORDER - An option order that gives the trading floor an opportunity to partially or totally execute an order with any remaining balance immediately canceled.
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IMPLIED VOLATILITY (IV) - This is the volatility that the underlying would need to have for the pricing model to produce the same theoretical option price as the actual option price. The term implied volatility comes from the fact that options imply the volatility of their underlying, just by their price. A computer model starts with the actual market price of an option, and measures IV by working the option fair value model backward, solving for volatility (normally an input) as if it were the unknown.
In actuality, the fair value model cannot be worked backward.
INDEX - The compilation of stocks and their prices into a single number, e.g. The SP 500.
INDEX OPTION - An option that has an index as the underlying. These are usually cash-settled.

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