Options University Blog

London International Financial Futures And Options Exchange (LIFFE)
There took an exchange in the futures and in the options of the city London and England which was modeled only after the Chicago Board of Trade and the Chicago Mercantile Exchange. Like the other counterparts of America, even this exchange used to tact with futures, options […]

[Read more →]

What is Listed Option?
These are options traded on registered stock exchanges like Euronet or Chicago Board Options Exchange (CBOE) and span over securities like common stocks, market indexes, ETFs and commodities. Exercise prices along with the expiration dates are available for all listed stock options. At times, these are also called “exchange-traded options”.
Share This
Tags: […]

[Read more →]

Lapse
The termination of a right or a privilege on a policy due to the passage of time or due to inactivity is denoted by the term lapse. A party that fails to fulfill the set conditions on an agreement or a contract usually looses the right on the policy and this is when the […]

[Read more →]

The time left with investor until the option exercise remains beneficial for the investor.
Likelihood of the use of American style option before its expiry is termed as fugit.

A Berkeley expert named Mark German used binomial trees and created this concept by studying the optimal period to exercise an American option.
Share This
Tags: American option, divedend date, […]

[Read more →]

Bermuda option is a kind of option which one can exercise only at pre-specified dates, generally each month.
How Does Bermuda Option Applied in Options Market?
This option happens to be a combination of European as well as American style options.
Share This
Tags: American Options, Bermuda Option, European options

[Read more →]

What Does Automatic Exercise Mean?
Automatic exercise refers to a procedure whereby the Option Clearing Corporation, in order to protect the holder of the option, exercises an “in-the-money” option.
For those who do not keep themselves updated with the third Friday each month, can consider it as insurance policy.
Share This
Tags: Automatic Exercise, insurance policy, Option Clearing […]

[Read more →]

What Does Assignment Mean?
1. When the property or rights of a person/individual/entity are transferred to other person or legal entity, it is termed as Assignment
2. When the option sold is exercised by the option buyer, there is a notice given to the option writer. This notice is also known as Assignment.
Share This
Tags: Assignment, option buyer

[Read more →]