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50 commonly used option terms with English and Chinese translations and brief explanations:

• Option

• A contract that grants the buyer the right, but not the obligation, to buy or sell an asset at a specified price within a specified time.

• Call Option

• Grants the holder the right to purchase the underlying asset at the exercise price before the expiration date.

• Put Option

• Grants the holder the right to sell the underlying asset at the exercise price before the expiration date.

• Exercise Price / Strike Price

• The price of the underlying asset specified in the option contract.

• Expiration Date

• The last date the option contract expires.

• Intrinsic Value

• The difference between the option's exercise price and the market price of the underlying asset.

• Time Value

• The portion of the option price that exceeds intrinsic value, reflecting the potential for price movement of the underlying asset before expiration.

• Implied Volatility

• The market's expected volatility of the underlying asset derived from the option price.

• Expected Volatility

• Predictions of the future volatility of the underlying asset based on historical data and market sentiment.

• Volatility

• An indicator that measures the magnitude of price movements of the underlying asset.

• Covered Call

• Holding the underlying asset while selling call options.

• Naked Short Selling

• Selling put options on an underlying asset that is not held or borrowed.

• Risk-Free Interest Rate

• Yield on investments that theoretically have no default risk (e.g., government bonds).

• Cash Settlement

• At the expiration of the option, the difference is paid in cash without involving physical delivery of the underlying asset.

• Position Limit

• Restrictions on the number of positions held by investors.

• Strike Price Interval

• The difference between adjacent strike prices of option contracts based on the same underlying contract.

• Breakeven Point

• The price of the underlying security when the option investor achieves zero investment return.

• Limited Loss

• The maximum loss for the option buyer is limited to the premium paid.

• Conversion Arbitrage

• A risk-free arbitrage strategy involving buying the underlying contract, buying put options, and selling call options.

• Vertical Spread Strategy

• Buying one option while selling another with the same underlying contract and expiration date but different strike prices.

• Ratio Spread Strategy

• Buying a certain number of options while selling a greater number of options with the same underlying contract and expiration date but different strike prices.

• Strap Strategy

• Buying two call options while also buying one put option with the same strike price and expiration date.

• Butterfly Spread Strategy

• A compound arbitrage strategy that includes both long and short butterfly spread strategies.

• Long Butterfly Spread Strategy

• Buying a lower strike call option and a higher strike call option while selling two call options with strike prices between the two.

• Box Spread Strategy

• A strategy combining bull spread and bear spread strategies.

• Short Butterfly Spread Strategy

• Selling a lower strike call option and a higher strike call option while buying two call options with strike prices between the two.

• Calendar Spread Strategy

• Selling a call option with an earlier expiration date while buying a call option with the same strike price but a later expiration date.

• Straddle Strategy

• Buying a call option while also buying a put option with the same strike price and expiration date.

• Strangle Strategy

• Buying a call option while also buying a put option with the same expiration date but different strike prices.

• Bull Spread Strategy

• Buying one option while selling one option with the same underlying contract and expiration date but a higher strike price.

• Bull Call Spread Strategy

• Buying a lower strike call option while selling a higher strike call option with the same underlying asset and expiration date.

• Bull Put Spread Strategy

• Buying a lower strike put option while selling a higher strike put option with the same underlying asset and expiration date.

• Bear Spread Strategy

• Buying one option while selling one option with the same underlying contract and expiration date but a lower strike price.

• Bear Call Spread Strategy

• Buying a higher strike call option while selling a lower strike call option with the same underlying asset and expiration date.

• Bear Put Spread Strategy

• Buying a higher strike put option while selling a lower strike put option with the same underlying asset and expiration date.

• Strip Strategy

• Buying one call option while also buying two put options with the same strike price and expiration date.

• Condor Strategy

• Selling (buying) two options with different strike prices while buying (selling) options with lower and higher strike prices, respectively.

• Maintenance Margin

• Funds held in a margin account to ensure contract performance.

• Naked Option

• Short position in options, where the seller does not hold the underlying contract.

• Cash or Physical Settlement

• The method of settlement at the expiration of the option, which can be cash payment for the difference or physical delivery.

• Limit Order

• An order executed at the specified price or better.

• Market Order

• An order executed immediately at the current market price.

• Stop Order

• An order executed when the market price reaches a specified level.

• Market If Touched Order (MIT)

• An order that becomes a market order when the market price reaches a specified level.

• Good-till-Cancelled Order

• Orders that remain valid until executed.

• Spread Order

• An order to buy and sell two related contracts simultaneously.

• Cancel Order

• Instructions to cancel unexecuted orders.

• Settlement Price

• The official price used for option settlement.

• Physical Delivery

• Physical delivery of the asset at option expiration.

• Hedging

• The practice of reducing risk from price movements of the underlying asset through buying and selling options.