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Algo trading involves leveraging software programs for automatic trading.
American Options can be exercised on any day within the expiration date.
The Process to choose a buyer or a seller to honor the right of an Option contract is called Assignment.
When the price of an Option is equal its strike price, it is called in the ATM.
A trade where you take a BUY and SELL position of an Option of same underlying and expiry but different strike prices.
An arbitrage strategy involving Call & Put Option created to get risk less profit.
An Option arbitrage strategy used when the underlying is under priced.
A price wherein an Option contract is nether a profit nor a loss.
A trade position where you take a BUY and SELL position of an Option of same underlying and expiry but of different strike prices.
An Option contract where the buyer gets the right but not the obligation to buy an underlying at a specified price and within a specified period.
A special feature offered by ICICI securities for traders to create and save orders anytime and execute it during market hours.
Delta measures by how much the price of an Option change with change in the price of its underlying.
European Options can only be exercised on expiry date.
When a trader decides to exercise the right of an Option contract, it is called exercising the Option.
The last date, usually the last Thursday of the month, on which an Option contract expires.
Gamma measures the change in the Delta of an Option to change in its underlying.
When the price of an Option has gone beyond its strike price, it is called in the ITM.
Index Option is an Option contract where the underlying is an index like NIfty 50 or Bank Nifty.
A Long option is a position wherein a trader buys an Option.
When you buy an Option, it is called a Long position.
The number of shares of the underlying in an Option contract is called Lot size.
It is used to predict the direction of a particular trend of an Option.
It is a popular indicator to identify the traders interest in a particular Option.
Options Greeks help a trader to ascertain change in the price of an Option due to change in various factors.
On the basis of their risk appetite and trading apprroach, participants in Options market can be categorized into- Hedgers, Speculators and arbitrageurs.
The minimum value by which the price of an Option contract can change.
An Option Writer is one who sells or shorts an Option with holding the underlying of the Option.
A strategy where a trader takes multiple positions to minimize risk of his trade.
Option chains are used to perform technical analysis of the underlying stock of an Option by traders.
A contract that gives you as a buyer the right, but not the obligation, to sell an underlying asset at a specified price and on a specific date.
It is the theoretical price of an option calculated with the help of Options pricing models.
Option contracts are useful tool for hedging.
A place where Options are bought and sold by traders.
The price an Option buyer pays or an Option seller receives is called the premium of an Option.
A market where previously issued options in the NSE and BSE are traded.
A spread is created by taking 2 positions of BUY and SELL of an Option of same underlying and expiration date.
A mobile app for traders to make Options trades from anywhere, anytime.
The seller of an Option is called Option Writer.
When the price of an Option has not reached its strike price, it is called in the OTM.
Options traded away from exchanges like NSE and BSE are called OTC Options.
A contract where a trader can take take 2 different position on the same Option in a single order.
A session conducted between 3:40 to 4: 00 PM for trading shares at a fixed predetermined price.
The session is conducted between 9 to 9:15 AM and has 2 sessions of Order Entry and Order Matching period.
An Option contract where the buyer gets the right but not the obligation to sell an underlying at a specified price and within a specified period.
Rho measures the change in the price of an Option with every percentage change in the interest rates.
A short Option is a position wherein a trader sells an Option.
The current market price of the underlying of an Option is called Spot Price.
It is selling an Option of the same underlying, expiration date and strike price which you have bought.
The specific price for which an Option is purchased. The buyer gets the right to exercise his Option at this Price.
It is created using different types of Option to create one single Option.
Theta measures the change in the price of an Option with each passing day towards expiry.
The decrease in the value of an Option with passage of time is called Time decay.
Selling a Call Option without holding its underlying.
Vega measures the impact of the change in the volatility of the underlying on the price of its Option.
Its a 2 legged strategy involving buying/selling of Call and Put Options.
The rate of change in the Price of the underlying of an Option is called Volatility.
It is an indicator of the traders interest in a particular Option.
