Index – The Option Strategy Desk Reference

Index

Ask price, 5

At the money (ATM), 6, 10

ATM. See At the money

Balanced butterflies, 77

Bear put vertical, 26

Bearish, 12

Bias, 12

Bid price, 5

Bid-to-ask, 5

Body, 77

Breakout, 6, 43, 79, 156, 163

Broken wing butterflies, 77

Broken wing long call butterfly, 9293

unbalanced, 100101

Broken wing long put butterfly, 9697

Broken wing short call butterfly, 9495

Broken wing short put butterfly, 9899

Brokerage account, 3, 11, 19

Bull call, 2122

Bull put, 7, 23

Bullish, 12

Calendar bull call, 27

Calendar bull put, 28

Calendar straddle, 3233

Call ratio spread, 6465

Cash-covered put. See Short put

Commissions, 11

Condor, 4445

Contract expiration date, 12

Covered call, 1920

Covered short strangle, 5253

Days till expiration (DTE), 14

Defined-risk option strategies, 12

Delta, 5, 12

Delta-neutral option strategy, 162, 164

Delta-neutral trade, 157

Diagonal bull call, 2930

Diagonal bull put, 31

Diagonal call ratio spread, 6869

Diagonal put ratio spread, 7071

Double butterfly, 110112

Downtrending price. See Bearish

DTE. See Days till expiration

Equity collar, 7273

ETFs. See Exchange-traded funds

Exchange fees, 11

Exchange-traded funds (ETFs), 3

Expiration date, 6, 10, 12

Extrinsic value, 5, 120

Finance, 130, 142, 144, 145 401K, 2

Gamma, 6

risk, 77, 81, 112

Hedge, 7374, 124, 147, 149, 151, 154, 159

Horizontal bull call diagonal, 2425

Implied volatility (IV percent/Rank), 6, 1213

In The money (ITM), 6, 10

Income, 12, 12, 14, 17, 118, 150, 154, 164

Index option, 110

Individual retirement account (IRA), 2

Intrinsic value, 5, 120

Investment, 1, 12, 15, 117

IRA. See Individual retirement account

Iron butterfly, 113114

Iron condor, 3637

ITM. See In The money

Jade lizard, 3839

LEAPS. See Long-Term Equity Anticipation Securities

Liquidity, 5, 7, 11

Long box, 137138

Long call, 1516

Long call butterfly

balanced, 7677

unbalanced, 8485

Long call ladder, 129130

Long call LEAPS, 117118

Long call synthetic straddle, 157158

Long guts strangle, 5455

Long put, 18

Long put butterfly

balanced, 8081

unbalanced, 8889

Long put ladder, 133134

Long put LEAPS, 119120

Long put synthetic straddle, 161162

Long straddle, 5859

Long strangle, 5051

Long-Term Equity Anticipation Securities (LEAPS), 6, 117120

MACD. See Moving average convergence divergence

Mark value, 5

Market, 2, 74, 85, 93, 95, 101

Maturity date. See Contract expiration date

Momentum studies, 10

Moving average convergence divergence (MACD), 5

Naked short call. See Uncovered short call

Neutral, bias, 12

Neutral calendar call straddle, 3435

The Only Options Trading Book You’ll Ever Need, 2, 13

Open Interest, 7

Option chain

call half of, 4

put half of, 4

values, 47

Option contract, 68, 1113, 77

Option Greeks, 4

Delta, 5

Gamma, 6

Theta, 6

Vega, 6

Option premium, 3

Option strategies, 1213. See also Specific strategies

Option trading

option chain values, 47

reasons for, 12

risk profile, 710

rules, 1012

strategies, 1213. See also Specific strategies

Order bars, 78

OTM. See Out of the money

Out of the money (OTM), 6, 10

Oversold/overbought studies, 10

Premium value, 11. See also Mark value

Price charts, 12

Probability, 910

Profit/loss (P/L), 89,
1112, 156

Protective call, 7475

Put backspread, 121122

Put ratio spread, 6667

Ratio call write, 123124

Ratio put write, 125126

Relative strength index (RSI), 5

Reverse iron butterfly, 115116

Reverse iron condor, 4243

Reward, 12

management. See Trade management

Rho, 45

Risk, 12

management, 3, 1112, 75. See also Trade management

Risk graph. See Risk profile

Risk profile, 710

Rolling down, 3

Rolling out, 3, 29

Rolling up, 3

RSI. See Relative strength index

Short box, 139140

Short call, 14

Short call butterfly

balanced, 7879

unbalanced, 8687

Short call ladder, 131132

Short call synthetic straddle,
159160

Short condor, 4647

Short position, 79, 83, 87, 109

Short put, 17

Short put butterfly

balanced, 8283

unbalanced, 9091

Short put ladder, 135136

Short put synthetic straddle, 163164

Short straddle, 5657

Short strangle, 4849

Slippage, 5

Spreads, 12

Strap, 6061

Strike price, 47, 1012

Strip, 6263

Synthetic long call, 147148

Synthetic long put, 149150

Synthetic long stock, 141142

Synthetic long stock combo,
143144

Synthetic short call, 151152

Synthetic short put, 153154

Synthetic short stock, 145146

split strikes, 155156

Theta, 6

Time, 10

Trade management, 47, 79, 83, 85, 93, 95, 101, 103, 105

Trading. See Option trading

Trading volume, 5, 8, 11

Traditional butterflies, 77

Twisted sister, 4041

2-step long call butterfly, 102103

2-step long put butterfly, 106107

2-step short call butterfly, 104105

2-step short put butterfly, 108109

Unbalanced broken wing butterflies, 77

Unbalanced butterflies, 77

Uncovered short call, 14

Uptrending price. See Bullish

Variable ratio call write, 127128

Vega, 6

Vertical spread, 37, 39, 103, 107109

Volatility, 3, 6, 10

Watch list, 3

Wings, 77

Witch’s hat/tent, 77, 89, 101