Glossary of Derivatives Terms – B

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Bearish
An adjective describing an opinion or outlook that expects a decline in price, either by the general market or by an underlying stock, or both.

Beta
A measure of how a stock’s movement correlates to the movement of the entire stock market. The Beta is not the same as volatility.  See also Standard Deviation and Volatility.

Bid Price
The price at which a buyer is willing to buy an option or stock.

Binary Call
An option contract that enables the holder to receive a fixed return if the underlying asset price is above a strike price at the expiry of the option. If the binary call could settle a ‘pinned‘ option at 0.5 (or 50) then it would be the same as a digital call option.

Binary Put
An option contract that enables the holder to receive a fixed return if the underlying asset price is below a strike price at the expiry of the option. If the binary put could settle a ‘pinned‘ option at 0.5 (or 50) then it would be the same as a digital put option.

Bullish
Describing an opinion or outlook in which one expects a rise in price, either by the general market or by an individual security.

Buy-write
The same as a Covered Call.

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