![]() Market orders to buy tend to be executed at the asked price, while market orders to sell tend to be executed at the bid price.Īt the money: An option is “at the money” if its strike price is equal to the market price of the underlying security.Īutomatic exercise: A protection procedure whereby the Options Clearing Corporation (OCC) attempts to protect the holder of an expiring in-the-money option on behalf of the trader by automatically exercising the option.Īutotrading: The ability to have an options broker make option trades recommended by Schaeffer’s Investment Research as soon as the recommendation is sent out. ![]() At-the-market orders must be executed immediately, and therefore take precedence over all other orders. ![]() Cash, accounts receivable, inventory, real estate, and securities are examples of assets.Īssignment: The receipt of an exercise notice by an option seller (writer) that obligates him or her to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.Īt-the-market order (also “market order”): An order to purchase or sell at the best available price. Risk in arbitrage occurs when historical relationships that were expected to hold no longer apply, or when expected events like an announced takeover fail to materialize.Īsk price: The lowest price a seller is willing to accept for a security (also called the “offer price”).Īsset: A resource that has economic value to its owner. Arbitrage: The process by which professional traders simultaneously buy and sell similar securities for a profit at theoretically zero risk. ![]()
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