Glossary of Derivatives Terms – S

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All option contracts of the same class that also have the same expiration date and strike price.

Settlement Price
The official price at the end of a trading session.

Short Position
A position wherein a person’s interest in a particular series of options is as a net writer (i.e., the number of contracts sold exceeds the number of contracts bought).

Spread Order
An order to simultaneously transact two or more option trades. Typically, one option would be bought while another would simultaneously be sold. Spread orders may be limit orders, not held orders, or orders with discretion. They cannot be stop orders, however.

Spread Strategy
Any option position having both long options and short options of the same type on the same underlying security.

Standard Deviation
A measure of the volatility of a stock. It is a statistical quantity measuring the magnitude of the daily price changes of that stock.

Stop-Limit Order
Similar to a stop order, the stop-limit order becomes a limit order, rather than a market order, when the security trades at the price specified on the stop.

With respect to option investments, a preconceived, logical plan of position selection and follow-up action.

Strike Price
The target price at which the option trader may win or lose. For example, the underlying is trading at  100.00. The digital call on offer has a strike price of 100.50. If the trader buys this digital call then the asset price must be above the strike of 100.50 to win. If it is lower than 100.50 the trader loses.

Striking Price Interval
The distance between striking prices on a particular underlying security.

A term in technical analysis indicating a price area lower than the current price of the stock, where demand is thought to exist. Thus a stock would stop declining when it reached a support area.  See also Resistance.














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