Closing Purchase A transaction in which a person who had initially sold short a stock or option exits or closes his short position by buying back the stock or option. Closing Range The range of high and low prices, or bid and ask prices, recorded during the close the final closing minutes of the trading day.
Closing Transaction A transaction in which a person who had initially bought or sold stock, futures or options exits or closes liquidates his position by selling his long stock, futures or options or buying back his short stock, futures or options. Combo Often another term for synthetic stock, a combo is an option position composed of calls and puts on the same stock, same expiration, and typically the same strike price. The quantity of long options and the quantity of short options nets to zero.
Buying a combo is buying synthetic stock; selling a combo is selling synthetic stock. Sometimes, combo is used to describe options at two different strikes, in which case it would not be synthetic stock. Please note that multiple-leg option strategies such as this can entail substantial transaction costs, including multiple commissions, which may impact any potential return. Condor Spread An option position composed of either all calls or all puts with the exception of an iron condor , with long options and short options at four different strikes.
The options are all on the same stock and of the same expiration, with the quantity of long options and the quantity of short options netting to zero. Generally, the strikes are equidistant from each other, but if the strikes are not equidistant, the spread is called a pterodactyl. In a long short condor the highest and lowest strikes are both long short while the two middle strikes are both short long.
Confirmation Statement After a stock or options transaction has taken place, the brokerage firm must issue a statement to the client.
The statement contains the name of the underlying stock, the number of shares or option contracts bought or sold and the prices at which the transactions occurred. Contango The inverse of backwardation. When the futures price is above the spot price at expiration. Contingency Order When you place a stock or options order you can choose to place contingencies on that order, meaning that the order will be filled only when a specific event has occurred.
Contract The basic unit of trading for options. An option, whether it's a put or a call, is an agreement between two parties the buyer and the seller to abide by the terms of the option contract as defined by an exchange. Contract Month Generally used to describe the month in which an option contract expires. Contract Size The number of shares of the underlying stock that an options contract would deliver if exercised.
Contract sizes for equity options in the U. TD Ameritrade incorporates the contract size in the calculation of your delta and gamma. Conversion Option's Position A position of long stock, short a call, and long a put with the call and put having the same strike price, expiration date, and underlying stock. The short call and long put acts very much like short stock, thus acting as a hedge to the long stock.
So, a conversion has a very small delta. Correction A temporary reversal of direction of the overall trend of a particular stock or the market in general. Cost Basis The original price paid for a stock or option, plus any commissions or fees. It is used to determine capital gains or losses when the stock or option is sold.
B Access. Admission to the Virtual Trading Crowd is limited to members and member organizations, Clerks, Exchange employees, and any other persons the Exchange authorizes admission to the Virtual Trading Crowd.
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Every member must join the Virtual Trading Crowd via a computer and either a computer audio; b cell phone; or c hard-wired phone, as determined by Phlx. Every member must be identified within the chat by name in place of a badge requirement. Any unidentified attendee will be removed from the Virtual Trading Crowd.
Every member in the Virtual Trading Crowd must consent to audio and video recording in order to participate in the Virtual Trading Crowd. Every member in the Virtual Trading Crowd must provide Market Operations with a contact number where Market Operations will be able to reach them during the trading day. The contact number may not be the same number that is being used to connect to the Virtual Trading Crowd. Members are responsible for maintaining updated contact information.
Multiple classes may trade in a single zone. The Exchange will assign each Floor Market Maker to a zone and Floor Brokers may determine in which zone s they will be present.
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C Equipment. Members and member organizations may use any equipment to access the Virtual Trading Crowd and do not need to register devices they use while in the Virtual Trading Crowd. D Chats. The Exchange may determine to require any Floor Market Maker or Floor Broker in a Virtual Trading Crowd that attempts to trade against an order represented for execution to express its bid or offer in a chat available in the remote conferencing feature.
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Chats will be visible to all participants in a zone and will not be permitted directly between individual participants. E Records. F Trading Rules. If a Virtual Trading Crowd is enacted the Options 8 Rules shall apply to the extent not amended by the below rules. Prior to speaking on remote conferencing, each member must announce themselves each time. If a member experiences a technical issue accessing the remote conferencing, the Exchange will not be responsible for unexecuted trades. Floor Market Maker quotes will be considered firm in the event the Floor Market Maker is disconnected from the Virtual Trading Crowd and the parties have a Meeting of the Minds with respect to the terms of the transaction.
In the event that a Floor Market Maker is disconnected from the Virtual Trading Crowd, a Floor Market Maker quote would not be considered firm if the quote were provided and the parties did not have a Meeting of the Minds with respect to the terms of the transaction.
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A break-out room may be utilized to declare a dispute or otherwise notify an Options Floor Official of any required notifications. Disruptive or unnecessary conversations or comments in the remote conferencing or on chat will not be permitted and will be subject to disciplinary action. A member may not permit any other unauthorized person to gain audio or video access to the Virtual Trading Crowd. A member shall not record any trading sessions. A Floor Market Maker will not be obligated to quote electronically in any designated percentage of series.
Such Floor Market Maker shall provide such quotations with a size of not less than 10 contracts.
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With respect to classes of option contracts to which his assignment extends, a Lead Market Maker and an ROT, whenever the ROT except an RSQT enters the trading crowd in other than a floor brokerage capacity or is called upon by an Options Exchange Official or a Floor Broker, to make a market, are expected to engage, to a reasonable degree under the existing circumstances, in dealing for his own account when there exists, or it is reasonably anticipated that there will exist, a lack of price continuity, a temporary disparity between the supply of and demand for a particular option contract, or a temporary distortion of the price relationships between option contracts of the same class.
Without limiting the foregoing, a Lead Market Maker and an ROT is expected to perform the following activities in the course of maintaining a fair and orderly market:. The Exchange may establish differences other than the above for one or more series or classes of options.
With respect to all U. With respect to classes of option contracts other than those to which his appointment extends, an ROT other than an RSQT , whenever he enters the trading crowd in other than a floor brokerage capacity or is called upon by an Options Exchange Official or a floor broker to make a market, shall undertake the obligations specified in paragraph c of this Rule.
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Furthermore, an ROT should not:. Transactions executed in the trading crowd where the contra-side is an ROT are not included. A Floor Broker handling an order is to use due diligence to cause the order to be executed at the best price or prices available to him in accordance with the Rules of the Exchange.
An Options Floor Broker shall ascertain that at least one Floor Market Maker is present at the trading post prior to representing an order for execution.
This paragraph a shall not apply to a Floor Broker in any foreign currency option if no Floor Market Maker registered in such foreign currency option is present on the Exchange's trading floor at that time. An Options Floor Broker handling a contingency order that is dependent upon the price of the underlying security shall be responsible for satisfying the dependency requirement on the basis of the last reported price of the underlying security in the primary market that is generally available on the Options Floor at any given time. Unless mutually agreed by the members involved, an execution or non-execution that results shall not be altered by the fact that such reported price is subsequently found to have been erroneous.
A Floor Broker shall not be held responsible for the execution of a single order combining different series of options based upon transaction prices that are established at the opening or close of trading or during any trading rotation.
An Options Floor Broker must inform the crowd when he is representing an order for a Floor Market Maker and must comply with Options 8, Section 25 d 1 , h , i and j.