Glossary A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | 1 | 3 | 4 | 5 Definitions by InvestorWords.com   What is...? option The right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount of a given stock, commodity, currency, index, or debt, at a specified price (the strike price) during a specified period of time. For stock options, the amount is usually 100 shares. also called option contract. see also derivative, security, exercise, covered option, uncovered, embedded option, writer, class of options, type, at the money, in the money, close to the money, deep in the money, out of the money, deep out of the money, contract, exercise limit, early exercise, daily trading limit, aggregate exercise price, furthest month, nearby month, far option, back months, last trading day, interest rate option, open interest, ratio write, variable ratio write, underlier, series, American-style option, Asian option, assignment, average option, spread, bear spread, bull spread, butterfly spread, calendar spread, diagonal spread, credit spread, debit spread, horizontal spread, vertical spread, perpendicular spread, combination, ratio calendar combination, ratio calendar spread, ratio spread, Black-Scholes Option Pricing Model, break-even point, buy and write, called away, capped-style option, Chicago Board Options Exchange, conversion option, embedded option, listed option, lapsed option, expiration cycle, futures option, hedge, index option, intervals, lookback option, near option, OEX, outcry, premium, privilege dealer, rho, theta, vega, roll down, roll forward, roll up, selling the spread, short straddle, single option, swaption, time value. Copyright ©2009 by InvestorGuide.com. All Rights Reserved.