Dump: Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits 2nd ed

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Title: Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits
Authors: Dan Passarelli
Edition: 2
Finished Date:
Rating: 5
Language: English
Genres: English, Options
Level: Entry
Publishers: Bloomberg Press
Publication Date: 2015-06-13
ISBN: 978-1118133163
Format: Pdf
Pages: 368
Download: Pdf

time
volatility
interest rates
dividend

Part I: the basics of option greeks

Chapter 1: the basics

an option: a contract that gives its owner the right to buy or the right to sell a fixed quantity of an underlying security at a specific price within a certain constraint.

2 types of options

  • calls
  • puts

buyer (holder): have a long position

owner

option seller/writer: a short position in the option

Option holders do not receive dividends that would be paid to the shareholders of the underlying stock, nor do they have voting rights

When a trader who is long an option exercises, a trader with a short position gets assigned.

assignment: the trader with the short option position is called on to fulfill the obligation that was established when the contract was sold.

create a short position = a sell-to-open transaction
cover the short position = buy back the option = a buy-to-close order

volume: the total number of contracts traded during a time period. on a one-day basis, week, month, year. 交易多少次, 一个contract可以交易多次.

open interest: the number of contracts that have been created and remain outstanding. A running total. 实际上有多少个volume的contract