Options Glossary: A
Adjustments
Certain events such as a stock split or a stock dividend (e.g., a 3-for-2 stock split). An adjusted option may cover more (or less) than the standard one hundred shares. For example, after a 3-for-2 stock split, the adjusted option will represent 150 shares. For such options, the premium must be multiplied by a corresponding factor. Example: buying 1 call (Covering 150 shares) at 4 would cost $600. See also Strike price interval.
All-or-none order (AON)
A type of option order which requires that the order be executed completely or not at all. An AON order may be either a day order or a GTC (Good til cancel) order.
American-style option
An option that can be exercised at any time prior to its expiration date. See also European-style option.
Arbitrage
A trading technique that involves the simultaneous purchase and sale of identical assets or of equivalent assets in two different markets with the intent of profiting by the price discrepancy.
Ask / ask price
The price at which a seller is offering to sell an option or a stock. See also Assignment.
Assignment
Notification by OCC to a clearing member that an owner of an option has exercised his or her rights thereunder. For equity and index options, assignments are made on a random basis by OCC. See also Delivery and Exercise.
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