Options Glossary

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Each Way

The commission made by a broker for the purchase and sale sides of a trade.

End of Day

The close of the trading day when market prices settle.

EPS Rank

An Investor's Business Daily list of companies ranked from 0 to 100 by the strength of each company's earnings per share.

Equilibrium

A price level in a sideways market equal-distance from the resistance and support levels.

Eurodollar

Dollars deposited in foreign banks, with the futures contract reflecting the rates offered between US banks and foreign banks.

European Style Option

An option contract that can only be exercised on the expiration date.

Exchange

An area where an asset, option, future, stock or derivative is bought and sold.

Exchange Rate

The price at which one country's currency can be converted into another country's currency.

Execution

The process of completing an order to buy or sell securities.

Exercise

Implementing an option's right to buy or sell the underlying security.

Exercise Price

A price at which the stock or commodity underlying a call or put option can be purchased (call) or sold (put).

Expected Profit

The stock price is randomly projected into the future using the stock's 20-day statistical (historical) volatility (SV) in the Optionetics option trade ranker tool. The stock price projection stops at the expiration of the earlist expiring option leg. The stock price future statistical distribution at option expiration is used to compute possible profits and losses. Expected Profit is the predicted profits minus the predicted losses expressed in total dollars.

Expiration

The date and time after which an option may no longer be exercised.

Expiration Date

The last day on which an option may be exercised.

Explosive

An opportunity that can yield large profits with usually a limited risk in a short amount of time.

Extrinsic Value

The price of an option less its intrinsic value. An out-of-the money option's worth consists of nothing but extrinsic or time value.