asx_UnderstandingOptionStrategies

At the money when the price of the shares equals the

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Unformatted text preview: of shares at a stated price on or before the expiry date. Exercise Price (Strike Price): The amount of money that is paid by the taker or writer for the transfer of the share upon exercise. Expiry Day: The date on which option series expire. Fair Value: The theoretical value generated using an options pricing model. In-the-money: An option with intrinsic value. Intrinsic value: The difference between the market value of the shares and the exercise price of the option. Margin: An amount calculated by the Options Clearing House (OCH) to cover the obligations arising from option contracts. Open Interest: The number of outstanding contracts in a particular class or series. Out-of-the-money: When the exercise price is above the market price for a Call option, and below the market price for a Put option. Premium: The amount payable by the buyer to the seller for entering into the option. Put option: A contract that entitles the buyer to sell a fixed number of shares at a stated price on or before the expiry date. Time Value:...
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