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Average Price of Option

An estimated price of an option based on the premise that the relationships between the underlying price and the option...

No-Cost Collar

A risk reversal that allows investors to avoid paying a premium for an option. In this option strategy, the premium...

NTM

It stands for near the money; the state in which options or option positions, whose market prices are very near...

Near The Money

The state in which options or option positions, whose market prices are very near to their strike prices, are the...

Novation

A process of replacing a contract or a series of contracts with a new one(s), whereas a third party takes...

Payout

The value of an option at expiration date, i.e., the value which is received by a holder from exercising an...

Payoff

The value of an option at expiration date, i.e., the value which is received by a holder from exercising an...

Petroleum Derivative

An energy derivative which is traded on crude oil (petroleum) and petroleum derivatives (by-products). This includes contracts on crude oil,...

Positioning of Swaps

A practice whereby an intermediary enters into one side of the swap transaction, such as fixed rate payer (or floating...

Position Limit

The maximum number of option contracts that an investor can hold on one side of the market. Accordingly, long calls...