Trading Options

2. Transaction where investor pays premium
7. An option that gives the holder the right to buy an asset at a specified price
8. Strike + Premium or Strike - Premium depending on the strategy and price of an underlying stock where an option will neither realize a profit or loss
10. Strategy where investor buys 100 shares of a security and simultaneously writes a call
12. When the seller of an option contract must fulfill their obligation (at any time) to buy or sell the underling to the long holder of the option contract at the strike price
15. To simultaneously close an option contract and open another contract with the same underlying security, but at a different strike price or expiration date
16. When the underlying security is below the strike price for a call or above the strike price for a put
17. An option that gives the holder the right to sell an asset at a specified price
18. Phenomenon where time value decreases as the expiration date draws near
19. Strategy where an investor writes a put and cash, or equivalent is set aside in case of assignment (strike price x 100)

1. A statistical measure of the dispersion of returns for a given security
3. The date on which an option contract becomes void
4. The price paid for an option contract
5. An opening transaction that results in a short option position
6. The use of borrowed capital to increase the potential return of an investment
9. The predetermined price at which an option can be exercised
11. For the long strategy, volatility is the name of the game. Composed of a long call and long put on the same underlying security with the same strike price and expiration date
13. Transaction where investor receives premium
14. When the underlying security is above the strike price for a call or below the strike price for a put