Option Fundamentals
Option
A security which gives the buyer the right, not the obligation to buy (call) or sell (put) an underlying asset
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Near the Money (NTM)
Where the underlying asset price is close to the Strike Price of an option.
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LEAPs
Long-term Equity AnticiPation Securities.These are long term stock options with expirations up to 3 years in the future. LEAPs are
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In the Money (ITM) Puts
ITM Puts are where the current stock price is less than the Put Strike Price.
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In the Money (ITM) Calls
ITM Calls are where the current stock price is greater than the Call Strike Price.
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Extrinsic Value (Time Value)
The price of an option less its intrinsic value. Out of the Money Options are entire made up of Extrinsic
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