Options Glossary

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LEAPS

Long-term stock or index options which are available with expiration dates up to three years in the future.

Leg

One side of a spread.

Limit Move

The maximum daily price limit for an exchange traded contract.

Limit Order

An order to buy a stock at or below a specified price or to sell a stock at or above a specified price.

Limit Up, Limit Down

Commodity exchange restrictions on the maximum upward or downward movements permitted in the price for a commodity during any trading session day.

Liquidity

The ease with which an asset can be converted to cash in the marketplace. A large number of buyers and sellers and a high volume of trading activity provide high liquidity.

Locked Market

A market where trading has been halted because prices have reached their daily trading limit.

Long

The term used to describe the buying of a security, contract, commodity, or option.

Low (lo)

This is the lowest price paid for a stock during a certain period.

Low IV

This is the lowest ATM IV found over a historical time period for the stock. The period chosen is a 6 month period.

Low Risk Investing

A trade which is hedged for purposes of limiting price loss as opposed to a directional trade where loss is unlimited.