An option allows you to pay a certain amount of money (the option price) to allow you to buy or sell a stock at the price (strike price) you decided on when buying the option.
Option holders have the right, but not the obligation, to buy or sell the underlying instrument at a specified price(strike price) on or before a specified date(exercise date) in the future. Exercising the option is using that right to to buy or sell the underlying instrument.
The Chicago Board of Trade (CBOT) is a publicly-traded exchange (NYSE: BOT) that specializes in futures and options trading. It is highly active in markets such as agriculture, energy, equities, and US Treasuries, providing an important risk-management function for thousands of its CBOT members.
A short call option position where the writer does not own the specified number of shares specified by the option nor has deposited cash equal to the exercise value of the call.
Covered calls are options strategies by which investors retain a long position in an asset and write or sell a call options on an identical in an effort to produce an increased income from the asset.
A Call Option gives the holder the right, but not the need to purchase a fixed quantity of a particular stock at a specific price inside a particular time. Call Options are bought by investors who anticipate a price increase.
At The Money refers to an option whose strike price equals the price of the underlying equity, index or commodity.
Strike Price is the price at which an option can be exercised to buy or sell the underlying stock or futures contract.
A Put Option gives the holder the right to sell the underlying stock or futures contract at a specified strike price.
Out-Of-The-Money refers to an option that is unfavourable to exercise.