The amount that the price of an option changes compared to a 1% change in volatility. Vega changes when there are large price movements in the underlying…

An options trading strategy with which a trader makes a simultaneous purchase and sale of two options of the same type that have the same expiration dates…

A slang term used to describe a situation in which a company's executives accelerate the vesting of their employee stock options. Usually, accelerated…

The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed…

A type of non-equity option that uses the CBOE Volatility Index as the underlying asset. This is the first exchange-traded option that gives individual…

1. A statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation…

A method of quoting option contracts whereby bids and asks are quoted according to their implied volatilities rather than prices.Used mainly by sophisticated…

The difference in implied volatility (IV) between out-of-the-money, at-the-money and in-the-money options. Volatility skew, which is affected by sentiment…

A common graphical shape that results from plotting the strike price and implied volatility of a group of options with the same expiration date. A volatility…

A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time…

An agreement between a company and its shareholders whereby the company issues warrants equal to some percentage of the dollar amount of the shareholder…

The premium paid for the rights associated with a warrant. Like a derivative option, warrants will have an intrinsic value and extrinsic value. For a…

A derivative security that loses value due to time decay.If wasting assets are held for too long, they will ultimately lose all their value. Derivatives…

An instrument used by companies to hedge against the risk of weather-related losses. The investor who sells a weather derivative agrees to bear this risk…

The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. It is typically controlled by large professional traders, program…

The seller of an option who collects the premium payment from the buyer. For example, a writer holds a short position on a call option. If the call option…

A type of debt-instrument-based option that derives its value from the difference between the exercise price and the value of the yield of the underlying…

A type of positive-carry collar that secures a return through the purchase of a cap and sale of a floor. Also called "zero cost options" or "equity risk…

A situation in which one participant's gains result only from another participant's equivalent losses. The net change in total wealth among participants…