Blossary – Options Terms and Definitions

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Option is the right, but not the obligation, to buy or sell a specific amount of a given stock, commodity, currency, index, or debt, at a specified price during a specified period of time. This glossary will give you insights into the world of Option.

Category: Business

24 Terms

Created by: zzcgood

Number of Blossarys: 7

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barrier option

A type of exotic option that provides a payoff if the value of the underlying reaches or does not reach a predetermined price or "barrier level". Barrier options are characterized as "knock in" if ...

basket

Definitions (2) 1. A group of several securities created for the purpose of simultaneous buying and selling. Baskets often play a role in index arbitrage, program trading and hedging. 2. A ...

binomial option pricing model

Method of option pricing that assumes the value of an asset increases and decreases by fixed proportions at a predictable schedule. Possible values of the asset can be predicted starting at the ...