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The bid–ask spread (also bid–offer or bid/ask and buy/sell in the case of a market maker) is the difference between the prices quoted (either by a single market maker or in a limit order book) for an immediate sale and an immediate purchase for stocks, futures contracts, options, or currency pairs in some auction scenario.
If the price of the underlying stock is above a call option strike price, the option has a positive intrinsic value, and is referred to as being in-the-money. If the underlying stock is priced cheaper than the call option's strike price, its intrinsic value is zero and the call option is referred to as being out-of-the-money. An out-of-the ...
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Put options rise in price when the underlying stock falls in price, and this basic option strategy gives the put owner the ability to multiply their money over the duration of the option contract ...
Strike price labeled on the graph of a call option.To the right, the option is in-the-money, and to the left, it is out-of-the-money. In finance, the strike price (or exercise price) of an option is a fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.
The market data for a particular instrument would include the identifier of the instrument and where it was traded such as the ticker symbol and exchange code plus the latest bid and ask price and the time of the last trade. It may also include other information such as volume traded, bid, and offer sizes and static data about the financial ...
A call option is out of the money when the strike price is above the spot price of the underlying security. A put option is out of the money when the strike price is below the spot price. With an "out of the money" call stock option, the current share price is less than the strike price so there is no reason to exercise the option.
Options trading can be complex, and the trading jargon may confuse even experienced investors and traders. Two of the most common options contracts to understand are call and put options.
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