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Topic: Expiration (options)

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Stock Option Expiration Cycles Understanding the expiration cycles is just one more way to help you increase your success rate when trading options. So on the Monday after the June expiration, CitiGroup had options trading in Jul, Aug, Sept, Dec and Jan 2004, as well as LEAPS in Jan 2005 and Jan 2006. LEAPS are long-term options that, with some exceptions, are no more than three years out and usually trade with a Jan expiration date. www.investopedia.com /articles/optioninvestor/03/090303.asp   (1567 words)

Your Options on Options But in expiration week, they matter plenty, which is why I dwell on them. That's why expiration plays such a big role -- because these trades all had to end in one week. you get a preliminary view from your brokers about how expiration may turn out. www.thestreet.com /funds/smarter_up/10023377.html   (1746 words)

International Trading Institute Or, options that may be exercised on the expiration date only. Options that may be exercised on or before the expiration date. Notification by The Options Clearing Corporation to a clearing firm member and to the writer of an option that an owner of the option has exercised the option and that the terms of settlement must be met. www.itichicago.com /Glossary.html   (1746 words)

DOCUMENTATION: Ways to change expiration date (retention levels) of media and backup IDs Following is a list of the options related to changing expiration dates and retention levels, along with some examples. That expiration date is calculated by adding the length of the retention level to the date of the backup. If the backup is on removable media, the expiration date of the media ID in the media catalog is changed, provided the expiration date on this command is greater than the current expiration of the media ID. seer.support.veritas.com /docs/237159.htm   (606 words)

Chapter 4. Binomial Option Pricing Model In addition, we show later, that the Black-Scholes formula is a special case applying to European options resulting from specifying an infinite number of binomial periods during the time-to-expiration. Binomial trees can also be used to determine the sensitivity of option values to the underlying asset price (delta and gamma), to the time-to-expiration (theta), to volatility (vega), to the riskless return (rho), and to the payout return (lambda). The standard binomial option pricing model for options on assets can easily be extended to options on futures and options on foreign currencies. www.in-the-money.com /presentation/sld063.htm   (427 words)

The Binomial Model for Pricing Options Thus the value of the call option is the discounted value of a weighted average of the expiration date value of the call. The results look the same as if one were computing the expected value of the expiration date payoff when the probability of stock price going up in one period is p and the probability of going down is (1-p). The binomial model for option pricing is based upon a special case in which the price of a stock over some period can either go up by u percent or down by d percent. www.sjsu.edu /faculty/watkins/binomial.htm   (483 words)

Collaring Your Year-End Profits With Options If upon the March expiration, the stock is either above $40 or below $35, you will have effectively sold out your long position at $39.70 or $34.70, respectively. Since collars (their use, misuse and abuse) have tax implications, and are often used as a way to defer taxes on capital gains, I must repeat my disclaimer and warning from last week: You should always consult a qualified tax expert before engaging in any transactions. The position defines the parameters -- both high and low -- under which one would be willing to sell an existing long position in an underlying stock during a specified period of time. www.thestreet.com /options/stevensmith/10128897.html   (451 words)

Campbell R. Harvey's Hypertextual Finance Glossary For stock options, this date is the Saturday immediately following the third Friday of the expiration month; brokerage firms may set an earlier deadline for notification of an option holder's intention to exercise. Technically, the expiration time is currently 11:59AM on the expiration date, but public holders of option contracts must indicate their desire to exercise no later than 5:30PM on the business day preceding the expiration date. Option that may be exercised only at the expiration date. www.duke.edu /~charvey/Classes/wpg/bfglose.htm   (8434 words)

The Institute for Options Research - Option Quotes Option quotes are courtesy of the Chicago Board Options Exchange. Franklin Frith - Copyright 2003 © by The Institute For Options Research, Inc. Enter an Option or LEAPS symbol below for delayed quotes and detailed data using the following format: Option Root Symbol, Space, Expiration Month Code, Strike Price Code; i.e. www.optionconnection.com /option_quotes.php   (8434 words)

QQQ Options Trading Signals expiration stock At the end of the expiration date, all those call options whose strike prices are higher than the price of the underlying stock or index will be worthless. European style options may be exercised only on the expiration date itself. Then, working backward from the expiration date to the present, option prices are calculated using a risk neutral valuation. www.qqq-options-trading.com /articles/options_expiration.asp   (375 words)

Incentive Stock Options Thus, for example, an incentive stock option award could permit acquisition of up to $500,000 worth of stock if it provided that the options were exercisable in five installments, each of which becomes exercisable in a different year and does not exceed $100,000. A disposition of the stock prior to the expiration of the holding period will cause the recognition of "compensation income," which is ordinary income tax treatment on the difference between the fair market value (FMV) of the stock and the option price on the date of exercise. Incentive stock options provide favorable tax treatment to the employee, but for an option to be considered an incentive stock option for tax purposes, it must satisfy certain requirements set forth in Internal Revenue Code Section 422. home.earthlink.net /~rkahnfinplan/IncentiveStockOptions.htm   (375 words)

US CODE: Title 26,422. Incentive stock options Subsection (b)(6) shall not apply if at the time such option is granted the option price is at least 110 percent of the fair market value of the stock subject to the option and such option by its terms is not exercisable after the expiration of 5 years from the date such option is granted. Such term shall not include any option if (as of the time the option is granted) the terms of such option provide that it will not be treated as an incentive stock option. (6) such individual, at the time the option is granted, does not own stock possessing more than 10 percent of the total combined voting power of all classes of stock of the employer corporation or of its parent or subsidiary corporation. law.cornell.edu /uscode/html/uscode26/usc_sec_26_00000422----000-.html   (375 words)

Compensation: Incentive Plans: Stock Options Incentive stock options (ISOs) in which the employee is able to defer taxation until the shares bought with the option are sold. An option is created that specifies that the owner of the option may 'exercise' the 'right' to purchase a company’s stock at a certain price (the 'grant' price) by a certain (expiration) date in the future. Options are usually granted at the current market price of the stock and last for up to 10 years. www.hr-guide.com /data/G445.htm   (375 words)

notesBiopt1.htm Since the call option will expire at the end of the period, the value of the option will be its intrinsic value at expiration. The option pricing model and most options' models can be thought of as a Dynamic Self financing Trading Strategy. This is a combination of stock shares and bonds that replicate the payoff of the options to be priced. www.sbm.temple.edu /~brader/notesBiopt1.htm   (556 words)

Invest FAQ:Derivatives:Stock Option Basics Although options offically expire on the Saturday immediately following the third Friday of the expiration month, for most mortals, that means the option expires the third Friday, since your friendly neighborhood broker or internet trading company won't talk to you on Saturday. Stock index futures, stock index options and options on individual stocks all expire on this day, and because of this, trading volume is usually especially high on the stock exchanges that day. This is called "writing" options and explains (somewhat) the source of options, since neither the company (behind the stock that's behind the option) nor the options exchange issues options. invest-faq.com /articles/deriv-option-basics.html   (1570 words)

Invest FAQ:Derivatives:Stock Option Basics Although options offically expire on the Saturday immediately following the third Friday of the expiration month, for most mortals, that means the option expires the third Friday, since your friendly neighborhood broker or internet trading company won't talk to you on Saturday. Stock index futures, stock index options and options on individual stocks all expire on this day, and because of this, trading volume is usually especially high on the stock exchanges that day. This is called "writing" options and explains (somewhat) the source of options, since neither the company (behind the stock that's behind the option) nor the options exchange issues options. invest-faq.com /articles/deriv-option-basics.html   (1570 words)

Invest FAQ:Derivatives:Stock Option Basics Although options offically expire on the Saturday immediately following the third Friday of the expiration month, for most mortals, that means the option expires the third Friday, since your friendly neighborhood broker or internet trading company won't talk to you on Saturday. Stock index futures, stock index options and options on individual stocks all expire on this day, and because of this, trading volume is usually especially high on the stock exchanges that day. For the last word on options, contact The Options Clearing Corporation (CCC) at 1-800-OPTIONS and request their free booklet "Characteristics and Risks of Listed Options." This 94-page publications will give you all the details about options on equity securities, index options, debt options, foreign currency options, principal risks of options positions, and much more. invest-faq.com /articles/deriv-option-basics.html   (1570 words)

Expansion Macro Where options are concerned, if you use one macro, Aspen Systems assumes you are specifying a list of all option strikes in the near month expiration. When used with the expansion macro, a strike modifier enables you to list options with a particular relationship to the at-the-money strike. where SP is the symbol root, the first @ specifies a list of all expiration months, the second @ specifies a list of all strikes, and C specifies calls. www.aspenres.com /Documents/AspenGraphics4.0/Expansion_Macro.htm   (895 words)

Option Analytics Time value is that portion of an options price that represents the amount of time until expiration. An option's time value will be greater for those options with a longer amount of time until expiration as there is a greater likelihood that they will increase in value. Please note that options are not suitable for all investors and investing in options carries substantial risk. www.preferredtrade.com /cf/oanalytics.cfm   (760 words)

IVolatility.com - Services & Tools -> Knowledge Base -> Education -> Calculators Help An options holder who intends to exercise an option by expiration must give exercise instructions to his or her brokerage firm before the firm's cut-off time for accepting exercise instructions on the last trading day before expiration. EUROPEAN STYLE: Most (but not all) index options listed for trading on the options exchanges in the United States are European style options. Once the "GO" button is clicked, the Options Calculator simply taps IVolatility.com's extensive options database and then plugs in the appropriate stock price, interest rate, dividends (if any) and their payment schedule for that particular stock or option. www.ivolatility.com /info/calchelp.html   (2415 words)

HKUST Institutional Repository : Item 1783.1/1320 In each class of the American lookback options, we analyze the characterization of the optimal stopping region, in particular, their asymptotic behaviors at time close to expiration and at infinite time to expiration. The inter-relations between the price functions of these American lookback options are explored. We examine the early exercise policies and pricing behaviors of one-asset American options with lookback payoff structures. hdl.handle.net /1783.1/1320   (2415 words)

European Style Option European style options (European Options) can only be exercised at their expiration. American Style Options (American Options) can be exercised anytime up to their expiration date. Most options in the United States are this type. www.mindxpansion.com /options/european_option.html   (2415 words)

IVolatility.com - Services & Tools -> Knowledge Base -> Education -> Understanding IVolatility.com data The volatility surface data are widely used in the construction of options strategies as it allows traders to find expensive and cheap options today within any one expiration or within different expirations. Below is an example of an actual current option's historical implied volatility on stock BA, May expiration (38 days to expiration), strike $27.5 with spot $27.5 and the volatility chart is taken from surface of options with similar parameters (30 days to expiration, 0% moneyness). The IV Surface can be used to receive different sections (by one or two variables), which can be used to estimate volatility time and strike skews, the dynamics of volatility changes for an option, and to realize different kinds of analysis. www.ivolatility.com /help/15.html   (964 words)

OCC - Memo #18419-WORLDCOM INC.-MCI GROUP - TRADING HALT Clearing Members should remind customers of their obligations to submit exercise instructions before expiration, as described in the Options Disclosure Document "Characteristics and Risks of Standardized Options", p. OCC anticipates expiring FQN options will be processed in the normal fashion this weekend, including the use of the customary in-the-money thresholds to effect exercise of expiring, FQN options. There continues to be no OCC restriction on the exercise of FQN put and call options, and OCC does not currently anticipate imposing such restrictions. www.optionsclearing.com /market/infomemos/2002/sep/18419.htm   (964 words)

Front-Month Option Implied Volatility Since "days to expiration" and "volatility" play a big part in determining the price of an option, you will see that the volatility component has to be increased at a higher and higher rate in order to give those options some value as the "days to expiration" gets smaller and smaller.. I have seen that implied volatility in oil options is higher in jun-04 contracts futures than in june-05. I got an interesting question from a reader about why option implied volatility is more expensive for short-term, front-month options. www.mrswing.com /artman/publish/article_287.shtml   (837 words)

American Stock Exchange - Index FLexible EXchange Option Specifications American-style Index FLEX options, exercised prior to expiration date, are settled based on the closing value on the index on the exercise date. Index FLEX options are not aggregated with conventional index option contracts and there are no position limits for the Major Market Index. Subject to the same customer margin requirements governing traditional broad-market index options: 100% of the market value of the option plus 15% of the value of the underlying index less any out-of-the-money amount, subject to a minimum of 100% of the market value of the option plus 10% of the value of the underlying index. www.amex.com /options/prodInf/Options_ProductInfo_FLEX_Con_Spec_Index.html   (837 words)

American Style Option European style options can only be exercised at their expiration. American Style Options (American Options) can be exercised anytime up to their expiration date. Most options in the United States are this type. www.mindxpansion.com /options/american_option.html   (200 words)

CBOE - Equity Option Concepts Options are contracts in which the terms of the contract are standardized and give the buyer the right, but not the obligation, to buy or sell a particular asset (e.g., the underlying stock) at a fixed price (the strike price) for a specific period of time (until expiration). In accordance with the standardized terms of their contracts, all options expire on a certain date, called the "expiration date." For conventional listed options, this can be up to nine months from the date the options are first listed for trading. The seller of an option is obligated to perform according to the terms of the options contract-selling the stock at the contracted price (the strike price) for a call seller, or purchasing it for a put seller-if the option is exercised by the buyer. www.cboe.com /LearnCenter/Basics.asp   (2331 words)

Volatility Smile Volatility Smile / a common graphical shape that results from plotting the strike price and implied volatility of a group of options with the same expiration date. Volatility Smile \ A common graphical shape that results from plotting the strike price and implied volatility of a group of options with the same expiration date. A common graphical shape that results from plotting the strike price and implied volatility of a group of options with the same expiration date. www.itlocus.com /glossary/volatility_smile.html   (78 words)

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