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Stock index option |
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Definition of Stock index optionStock index optionAn option in which the underlying is a common stock index.
Related Terms:Index warrantA stock index option issued by either a corporate or sovereign entity as part of a security Strike indexFor a stock index option, the index value at which the buyer of the option can buy or sell the Abandonment optionThe option of terminating an investment earlier than originally planned. Acquisition of stockA merger or consolidation in which an acquirer purchases the acquiree's stock. Adjustable rate preferred stock (ARPS)Publicly traded issues that may be collateralized by mortgages and MBSs. American optionAn option that may be exercised at any time up to and including the expiration date. American optionAn option that can be exercised any time until its ![]() American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades American-style optionAn option contract that can be exercised at any time between the date of purchase and Arbitrage-free option-pricing modelsYield curve option-pricing models. Arms indexAlso known as a trading index (TRIN)= (number of advancing issues)/ (number of declining Asian optionoption based on the average price of the asset during the life of the option. Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Barrier optionsContracts with trigger points that, when crossed, automatically generate buying or selling of Basket optionsPackages that involve the exchange of more than two currencies against a base currency at ![]() Beta equation (Stocks)The beta of a stock is determined as follows: Binomial option pricing modelAn option pricing model in which the underlying asset can take on only two Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses Bond indexingDesigning a portfolio so that its performance will match the performance of some bond index. BOOK VALUE OF COMMON STOCKThe theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals: Buying the indexPurchasing the stocks in the S&P 500 in the same proportion as the index to achieve the cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Call an optionTo exercise a call option. Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. ![]() capital stockOwnership shares issued by a business corporation. A business Capital StockThe total amount of plant, equipment, and other physical capital. Common stockThese are securities that represent equity ownership in a company. Common shares let an Common stockShares of ownership sold to the public. Common StockA financial security that represents an ownership claim on the common stockOwnership shares in a publicly held corporation. Common StockThat part of the capital stock of a corporation that carries voting rights and represents Common stock equivalentA convertible security that is traded like an equity issue because the optioned Common stock marketThe market for trading equities, not including preferred stock. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Common stock ratiosRatios that are designed to measure the relative claims of stockholders to earnings Compound optionoption on an option. Conflict between bondholders and stockholdersThese two groups may have interests in a corporation that Consigned stocksInventories owned by a company, but located on the premises Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a Consumer Price Index (CPI)An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation. Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Convertible preferred stockPreferred stock that can be converted into common stock at the option of the holder. Cost of Common StockThe rate of return required by the investors in the common stock of Cost of Preferred StockThe rate of return required by the investors in the preferred stock of Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Cumulative preferred stockPreferred stock whose dividends accrue, should the issuer not make timely Currency optionAn option to buy or sell a foreign currency. Dealer optionsOver-the-counter options, such as those offered by government and mortgage-backed Delivery optionsThe options available to the seller of an interest rate futures contract, including the quality Departmental stocksThe informal and frequently unauthorized retention of excess inventory on the shop floor, which is used as buffer safety stock. Direct stock-purchase programsThe purchase by investors of securities directly from the issuer. Dividend yield (Stocks)Indicated yield represents annual dividends divided by current stock price. Doubling optionA sinking fund provision that may allow repurchase of twice the required number of bonds Down-and-in optionBarrier option that comes into existence if asset price hits a barrier. Down-and-out optionBarrier option that expires if asset price hits a barrier. EAFE indexThe European, Australian, and Far East stock index, computed by Morgan Stanley. Earnings per share of common stockHow much profit a company made on each share of common stock this year. Elasticity of an optionPercentage change in the value of an option given a 1% change in the value of the Embedded optionAn option that is part of the structure of a bond that provides either the bondholder or Employee stock fundA firm-sponsored program that enables employees to purchase shares of the firm's Employee stock ownership plan (ESOP)A company contributes to a trust fund that buys stock on behalf of Employee Stock Ownership Plan (ESOP)a profit-sharing compensation program in which investments are made in Employee Stock Ownership Plan (ESOP)A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer. Enhanced indexingAlso called indexing plus, an indexing strategy whose objective is to exceed or replicate Equity optionsSecurities that give the holder the right to buy or sell a specified number of shares of stock, at Escalating Price OptionA nonqualified stock option that uses a sliding scale for European optionoption that may be exercised only at the expiration date. Related: american option. European optionAn option that can be exercised only on its expiration date. European-style optionAn option contract that can only be exercised on the expiration date. Exchange of stockAcquisition of another company by purchase of its stock in exchange for cash or shares. Exercising the optionThe act buying or selling the underlying asset via the option contract. Exit OptionsA variety of options available to an investor to recover their invested capital and the return on their investment. Floor stocksLow-cost, high-usage inventory items stored near the shop floor, Foreign currency optionAn option that conveys the right to buy or sell a specified amount of foreign Futures optionAn option on a futures contract. Related: options on physicals. Garmen-Kohlhagen option pricing modelA widely used model for pricing foreign currency options. Greenshoe optionoption that allows the underwriter for a new issue to buy and resell additional shares. Growth stockCommon stock of a company that has an opportunity to invest money and earn more than the Heavenly Parachute Stock OptionA nonqualified stock option that allows a deceased option holder’s estate up to three years in which to exercise his or her Incentive Stock OptionAn option to purchase company stock that is not taxable Income stockCommon stock with a high dividend yield and few profitable investment opportunities. IndexA series of numbers measuring percentage changes over time from a base period. The index number for the base period is by convention set equal to 100. indexAn index is a statistical measure of a market based on the performance of a sample of securities in that market. For example, the S&P/TSX Composite index reflects the performance of the most actively traded stocks on The Toronto stock Exchange. Index and Option Market (IOM)A division of the CME established in 1982 for trading stock index Index arbitrageAn investment/trading strategy that exploits divergences between actual and theoretical Index fundInvestment fund designed to match the returns on a stockmarket index. index fundsMutual funds that aim to track the performance of a specific stock or bond index. This process is also referred to as indexing and passive management. Index modelA model of stock returns using a market index such as the S&P 500 to represent common or Index optionA call or put option based on a stock market index. Index Portfolio Rebalancing Service (IPRS)index Portfolio Rebalancing Service (IPRS) is a comprehensive investment service that can help increase potential returns while reducing volatility. Several portfolios are available, each with its own strategic balance of index Funds. IPRS maintains your personal asset allocation by monitoring and rebalancing your portfolio semi-annually. IndexationThe adjustment of benefits to compensate for the effects of inflation. Indexed bondBond whose payments are linked to an index, e.g. the consumer price index. IndexingA passive instrument strategy consisting of the construction of a portfolio of stocks designed to Interest OptionOne of several investment accounts in which your premiums may be invested within your life insurance policy. Intrinsic value of an optionThe amount by which an option is in-the-money. An option which is not in-themoney Irrational call optionThe implied call imbedded in the MBS. Identified as irrational because the call is Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |