underlying futures contract
51expiration date — Options on futures generally expire on a specific date during the month preceding the futures contract delivery month. For example, an option on a March futures contract expires in February but is referred to as a March option because its… …
52vega — The change in an option s price resulting from changes in the volatility of the price for the underlying. American Banker Glossary A term that describes the sensitivity of the option price to a one percent change in volatility. Bloomberg… …
53in-the-money option — An option having intrinsic value. A call option is in the money if its strike price is below the current price of the underlying futures contract. A put option is in the money if its strike price is above the current price of the underlying… …
54expiration — An option is a wasting asset; i.e., it has a limited life, usually nine months. At the end of its life, it either becomes worthless (if it is at the money or out of the money), or is automatically exercised for the amount by which it is in the… …
55Call — An option that gives the right to buy the underlying futures contract. The New York Times Financial Glossary * * * ▪ I. call call 1 [kɔːl ǁ kɒːl] verb 1. [intransitive, transitive] to telephone someone: • She called the airport to ask about… …
56buyer — Anyone who enters the market to purchase a good or service. For futures, a buyer can be establishing a new position by purchasing a contract ( going long), or liquidating an existing short position. Puts and calls can also be bought, giving the… …
57serial options — Options for months for which there are no futures contracts. The underlying futures contract for a serial option month would be the next nearby futures contract. Chicago Mercantile Exchange Glossary Options which permit trading in specified… …
58LME — ( London Metal Exchange) A market for trading base metals, where traded options contracts are available against the underlying futures contract. Bloomberg Financial Dictionary website: www.lme.co.uk London Metal Exchange. The UK derivatives… …
59ratio writing — When an investor writes more than one option to hedge an underlying futures contract. These options usually are written for different delivery months. Ratio writing expands the profit potential of the investor s option position. Example: an… …
60London Metal Exchange — ( LME) A market for trading base metals, where traded options contracts are available against the underlying futures contract. Bloomberg Financial Dictionary website: www.lme.co.uk ( LME) A base metal …
