Glossary of Derivatives

A

Adjustment** Rajustement*	A change to contract terms due to a corporate action (e.g., a merger or stock split). Depending on the corporate action, different contract terms (including strike price, deliverable, expiration date, multiplier etc.) could be adjusted. An adjusted option may cover more or less than the usual 100 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.
American option *Option américaine	An option that the holder may exercise at a time of their choosing until the expiry date.
Arbitrage** Arbitrage*	A trading technique that involves the simultaneous purchase and sale of identical assets or equivalent assets in two different markets with the intent of profiting by the price discrepancy.
Assignment (option assignment) *Assignation de levée	An assignment requiring the writer of an option to follow through should the option be exercised by the buyer. In such a case, the option writer receives an exercise notice that requires them to sell (in the case of a call option) or buy (in the case of a put option) the underlying interest at the strike price stipulated in the contract.
Ask (ask price) (offer) (offer price) *Cours vendeur	The price at which a seller is willing to sell a security, a commodity, a currency, or a derivative.
At-the-money option *Option à parité	An option that has a strike price equal to the underlying interest’s price or the strike price which is the closest to the underlying interest’s price. The terms “near-the-money” and “close-to-the-money” may also be used.
Averaging down** Abaissement du coût moyen*	Buying more of a stock or an option at a lower price than the original purchase to reduce the average cost.

B

Backspread** Écart inverse sur ratio*	A Delta-neutral spread composed of more long options than short options on the same underlying instrument. This position generally profits from a large movement in either direction in the underlying instrument.
Bearish *Baissier, baissière	An adjective describing the opinion that a security, an index, a commodity, a currency, a derivative, or a market in general, will decline in price or value; describing a negative or pessimistic outlook; describing a state of declining prices or values.
Bear spread *Écart baissier	A bearish strategy involving the purchase of an option with a higher strike price and the sale of an option with a lower strike price, where the two options usually have the same expiry date. An investor can build this strategy either with call options (credit spread) or put options (debit spread).
Beta** Bêta*	A bearish strategy involving the purchase of an option with a higher strike price and the sale of an option with a lower strike price, where the two options usually have the same expiry date. An investor can build this strategy either with call options (credit spread) or put options (debit spread).
Bid (bid price) *Cours acheteur	The price at which a buyer is willing to buy a security, a commodity, a currency, or a derivative.
Black-Scholes model (Black-Scholes formula) (Black-Scholes-Merton model) (Black-Scholes-Merton formula) *Modèle de Black et Scholes	The first widely used option pricing model. Its formula is used to calculate a fair value for an option using the current underlying interest price, the expected dividends, the option’s strike price, the expected risk-free interest rate, the time to expiration, and the expected underlying interest volatility. While the Black-Scholes model does not perfectly describe real-world option markets, it is often used in the valuation and trading of options.
Box spread** Boîte*	A four-sided option spread that involves a long call and a short put at one strike price in addition to a short call and a long put at another strike price.
Break-even point *Point d’équilibre	The market price at which a trading strategy generates zero profit and causes no loss.
Broker** Courtier*	A person acting as an agent for making securities transactions. An account executive or a broker at a brokerage firm who deals directly with customers.
Bull spread *Écart haussier	A bullish strategy involving the purchase of an option with a lower strike price and the sale of an option with a higher strike price, where the two options usually have the same expiry date. An investor can build this strategy either with call options (debit spread) or put options (credit spread).
Bullish *Haussier, haussière	An adjective describing the opinion that a security, an index, a commodity, a currency, a derivative, or a market in general, will rise in price or value; describing a positive or optimistic outlook; describing a state of rising prices or values.
Butterfly spread** Écart papillon*	A strategy involving three strike prices with both limited risk and limited profit potential. Establish a long call butterfly by buying one call at the lowest strike price, writing two calls at the middle strike price and buying one call at the highest strike price. Establish a long put butterfly by buying one put at the highest strike price, writing two puts at the middle strike price and buying one put at the lowest strike price.
Buy-write** Achat d’un sous-jacent et vente d’une option d’achat*	A covered call position that includes a stock purchase and an equivalent number of calls written at the same time. This position may be a combined order with both sides (buying stock and writing calls) executed simultaneously.

C

Calendar spread** (horizontal spread) (time spread) Écart calendaire*	An option strategy that generally involves the purchase of a longer-termed option(s) (call or put) and the writing of an equal number of nearer-termed option(s) of the same type and strike price.
Call option (call) *Option d’achat	An option contract that gives the holder the right (with no obligation) to buy a specified quantity of the underlying interest at a specified strike price, at a time of their choosing until the contract expiry date (or only on the expiry date in the case of a European option), and that requires the writer to sell the underlying interest according to these terms should the holder exercise their right.
Carry** (carrying cost) Portage*	The interest expense on money borrowed to finance a securities position.
Cash-secured put** Option de vente couverte par des liquidités*	An option strategy in which a put option is written against a sufficient amount of cash (or Treasury bills) to pay for the stock purchase if the short option is assigned.
Cash settlement amount** (exercise settlement amount) Montant du règlement en espèces*	The difference between the exercise price of the option being exercised and the exercise settlement value of the index on the day the index option is exercised.
Closing price** Cours de clôture*	The final price of a security at which a transaction was made.
Closing [option] trade (offsetting trade) (closing transaction) (offsetting transaction) *Opération de liquidation [sur option]	Either the sale of an option originally bought or the purchase of an option originally sold.
Collar *Tunnel	A hedging strategy involving the purchase of a put option and the simultaneous sale of a call option having both the same expiry date but different strike prices, as well as a long position on the underlying interest. Such a strategy allows an investor to hedge to some extent against an adverse variation of the price of an underlying interest they own.
Collateral** Garantie*	Securities against which loans are made. If the value of the securities (relative to the loan) declines to an unacceptable level, this triggers a margin call. As such, the investor is asked to post additional collateral or the securities are sold to repay the loan.
Condor spread** (condor) (flat-top butterfly) Écart condor*	A strategy involving four strike prices with both limited risk and limited profit potential. Establish a long call condor spread by buying one call at the lowest strike, writing one call at the second strike, writing another call at the third strike, and buying one call at the fourth (highest) strike. This spread is also referred to as a flat-top butterfly.
Contingency order** Ordre conditionnel*	An order to execute a transaction in one security that depends on the price of another security.
Contract size** Quotité de négociation*	The amount of the underlying asset covered by the option contract. This is 100 shares for 1 equity option unless adjusted for a special event.
Conversion** Conversion*	An investment strategy in which a long put and a short call with the same strike price and expiration combine with long stock to lock in a nearly riskless profit.
Cover, to** Couvrir*	To close out an open position. This term most often describes the purchase of an option or stock to close out an existing short position for either a profit or loss.
Covered combination** Combinaison couverte*	A strategy in which one call and one put with the same expiration, but different strike prices, are written against each 100 shares of the underlying stock. Example: writing 1 XYZ May 60 call and writing 1 XYZ May 55 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully covered strategy because assignment on the short put requires purchase of additional stock.
Covered [option] writing (covered call writing) (overwriting) *Vente d’une option d’achat couverte	The writing of a call option by an investor who holds a sufficient quantity of the underlying interest to fulfill their sale obligation should the written option be exercised.
Covered put writing** (cash-secured put writing) Vente d’une option de vente couverte*	The cash-secured put is an option strategy in which a put option is written against a sufficient amount of cash to pay for the stock purchase if the short option is assigned.
Covered straddle** Stellage couvert*	An option strategy in which one call and one put with the same strike price and expiration are written against each 100 shares of the underlying stock. In actuality, this is not a fully covered strategy because assignment on the short put requires purchase of additional stock.
Credit** Crédit*	Money received in an account either from a deposit or from a transaction that results in increasing the account’s cash balance.
Credit spread *Écart créditeur	An option spread where the total premiums received for the short options is higher than the total premiums paid for the long options, resulting in a credit when initiating the strategy.
Curvature** Courbure*	A measure of the rate of change in an option’s Delta for a one-unit change in the price of the underlying stock.

D

Day order** Ordre valable pour la journée*	A type of option order that instructs the broker to cancel any unfilled portion of the order at the close of trading on the day the order was first entered.
Day trade** Opération sur séance*	A position (stock or option) that is opened and closed on the same day.
Debit** Débit*	Money paid out from an account from either a withdrawal or a transaction that results in decreasing the cash balance.
Debit spread *Écart débiteur	An option spread where the total premiums received for the short options is lower than the total premiums paid for the long options, resulting in a debit when initiating the strategy.
Delivery** Livraison*	The process of meeting the terms of a written option contract when notification of assignment has been received. In the case of a short equity call, the writer must deliver stock and in return receives cash for the stock sold. In the case of a short equity put, the writer pays cash and in return receives the stock.
Delta *Delta	A measure of the marginal variation of an option’s premium based on the marginal variation of the underlying interest’s price, all other things being equal. The delta of a call option has either a positive value or no value; the delta of a put option has either a negative value or no value. This value indicates the probability that the option will expire in the money and therefore be exercised.
Derivative (derivative instrument) (derivative product) *Instrument dérivé	A financial instrument whose value and characteristics are based on an underlying interest, which can be a security, an index, a commodity, or another derivative. Derivatives provide leverage to investors.
Diagonal spread** Écart diagonal*	A strategy involving the simultaneous purchase and writing of two options of the same type that have different strike prices and different expiration dates.
Discount** À escompte*	An adjective used to describe an option that is trading at a price less than its intrinsic value (i.e., trading below parity).

E

Early exercise** Levée hâtive*	A feature of American-style options that allows the owner to exercise an option at any time prior to expiration.
Equity** Avoir net*	In a margin account, equity is the difference between the securities owned and the margin loans owed. The investor keeps this amount after all positions are closed and all margin loans paid off.
Equity option** Option sur action*	An option on shares of an individual common stock or exchange traded fund.
Equivalent strategy** Stratégie équivalente*	A strategy that has the same risk-reward profile as another strategy.
European option *Option européenne	An option which the holder can only exercise on the expiry date.
Exchange traded fund** (ETF) Fonds négocié en bourse*	Exchange traded funds (ETFs) are index funds or trusts listed on an exchange and traded in a similar fashion as a single equity.
Exercise an option, to *Lever une option	To exercise, as the holder on an option, one’s right to buy (in the case of a call option) or sell (in the case of a put option) the underlying interest according to the terms specified in the option contract.
Exotic option *Option exotique	A call or put option that has unusual characteristics (e.g. with regards to the underlying interest, the strike price, the expiry date, or the payment structure) which differ from those of vanilla options. In general, exotic options are traded over-the-counter.
Expiry date [of an option] (expiration date) *Date d’échéance [d’une option]	The date on which an option contract expires. Options other than weekly options expire on the third Friday of the expiry month provided that it is a business day; otherwise they expire on the first business day preceding that Friday. Weekly options expire on any of the five weeks which follow the listing week and on which no other option listed on the same underlying interest expires. Weekly options expire on a Friday provided that it is a business day; otherwise they expire on the first business day preceding that Friday.
Ex-dividend date** (ex-date) Date de détachement du dividende*	The day before the date that an investor must have purchased the stock in order to receive the dividend. On the ex-dividend date, the previous day’s closing price is reduced by the amount of the dividend because purchasers of the stock on the ex-dividend date will not receive the dividend payment. This date is sometimes referred to simply as the ex-date, and can apply to other situations (e.g., splits and distributions). If you purchase a stock on the ex-date for a split or distribution, you are not entitled to the split stock or that distribution. However, the opening price for the stock will have been reduced by an appropriate amount, as on the ex-dividend date. Weekly financial publications, such as Barron’s, often include a stock’s upcoming ex-date as part of their stock tables.

F

Fundamental analysis**

*Analyse fondamentale**

A method of predicting stock prices based on the study of earnings, sales, dividends, and so on.

G

Gamma *Gamma	A measure of the marginal variation of an option’s delta based on the marginal variation of the underlying interest’s price, all other things being equal.
Good-’til-cancelled order** (GTC order) Ordre ouvert*	A type of limit order that remains in effect until it is either executed (filled) or cancelled. This is unlike a day order, which expires if not executed by the end of the trading day. If not executed, a GTC option order is automatically cancelled at the option’s expiration.

H

Hedge** (hedge position) (hedging position) Couverture*	A position established with the specific intent of protecting an existing position. For example, an owner of common stock may buy a put option to hedge against a possible stock price decline.
Historic volatility** Volatilité historique*	A measure of actual stock price changes over a specific period.
Holder** (bearer) (owner) Détenteur*	Any person who has made an opening purchase transaction, call or put, and has that position in a brokerage account.

I

Implied volatility [of an option] *Volatilité implicite [d’une option]	The volatility of the underlying interest’s price which is determined using an option pricing model and is implied in the option’s premium.
In-the-money option *Option en jeu	Either a call option that has a strike price below the underlying interest’s price, or a put option that has a strike price above the underlying interest’s price.
Index option** Option sur indice*	An option whose underlying interest is an index. Generally, index options are cash-settled.
Individual volatility** Volatilité propre*	The volatility percentage that justifies an option’s price, as opposed to historic volatility or implied volatility. A theoretical pricing model can be used to generate an option’s individual volatility when the five remaining quantifiable factors (stock price, time until expiration, strike price, interest rates and cash dividends) are entered along with the price of the option itself.
Institution** Institution*	A professional investment management company. Typically, this term describes money managers such as banks, pension funds, mutual funds and insurance companies.
Intrinsic value *Valeur intrinsèque	The positive difference between the underlying interest’s price and the strike price of a call option or between the strike price of a put option and the underlying interest’s price. By definition, the intrinsic value cannot be negative.
Iron butterfly** Écart papillon de fer*	An option strategy with limited risk and limited profit potential that involves both a long (or short) straddle, and a short (or long) strangle. An iron butterfly contains four options. It is equivalent to a regular butterfly spread that contains only three options.

L

Lambda** Lambda*	A measure of leverage. The expected percentage change in the value of an option for a 1% change in the value of the underlying product.
Last trading day [of an option] *Dernier jour de négociation [d’une option]	The last day on which an option can be traded. This is the date on which the option expires.
Leg *Composante [d’une stratégie]	Each component of a derivatives trading strategy involving more than the outright purchase or sale of a single instrument.
Leverage *Effet de levier	A means to amplify (positive or negative) return on investment through the use of derivatives (options or futures) rather than their underlying interests.
Limit order** Ordre à cours limité*	A trading order placed with a broker to buy or sell stock or options at a specific price.
Liquid market** Marché liquide*	Trading environments characterized by high trading volume, a narrow spread between the bid and ask prices, and the ability to trade larger sized orders without significant price changes.
Listed option** Option inscrite à la bourse*	A put or call traded on a national options exchange. In contrast, over-the-counter options usually have non-standard or negotiated terms.
Long option position** Position acheteur sur option*	The position of an option purchaser (owner) which represents the right to either buy stock (in the case of a call) or to sell stock (in the case of a put) at a specified price (strike price) at or before some date in the future (the expiration date). This position results from an opening purchase transaction (long call or long put).
Long stock position** Position acheteur sur action*	A position in which an investor has purchased and owns stock.

M

Margin requirement [for writing an option] (margin coverage) *Exigence de marge [pour la vente d’une option]	The cash amount or the securities that must be deposited with the broker before writing an option in order to guarantee the purchase or delivery of the underlying interest in case the option is exercised.
Market maker** Mainteneur de marché*	A trader who is mandated to post bids and offers and to maintain a fair and orderly market.
Market maker system** [competing] Système de maintien de marché*	A method of supplying liquidity in options markets by having market makers in competition with one another.
Market order** Ordre au cours du marché*	A trading order placed with a broker to immediately buy or sell a stock or option at the best available price.
Market quote** Cours du marché*	Quotations of the current best bid/ask prices for an option or stock in the marketplace. The investor usually obtains this information from a brokerage firm. However, for listed options and stocks, these quotes are widely disseminated and available through various commercial quotation services.
Mark-to-market** Évaluation à la valeur de marché*	An accounting process by which the price of securities held in an account are valued each day to reflect the closing price or closing market quotes. As a result, the equity in an account is updated daily to reflect current security prices properly.
Married put strategy** Achat d’un sous-jacent avec option de vente de protection*	The simultaneous purchase of stock and put options representing an equivalent number of shares. This is a limited risk strategy during the life of the puts because the stock can always be sold for at least the strike price of the purchased puts.

N

Naked [option] writing *Vente d’une option à découvert	The sale of a call or a put option without holding an equivalent quantity of the underlying interest or the cash required to fulfill the sale or purchase obligation should the written option be exercised.
Net credit** Crédit net*	Money received in an account either from a deposit or a transaction that results in increasing the account’s cash balance.
Net debit** Débit net*	Money paid from an account either from a withdrawal or a transaction that results in decreasing the cash balance.
Neutral** Neutre*	An adjective describing the belief that a stock or the market in general will neither rise nor decline significantly.
Neutral strategy** Stratégie neutre*	An option strategy (Or stock and option position) expected to benefit from a neutral market outcome.

O

Open interest [of an option] *Intérêt en cours [d’une option]	The number of option contracts with the same characteristics (strike price and expiry date) on a particular underlying interest that have not yet been exercised or bought back. If both the buyer and the writer of an option execute an opening trade, the open interest increases; conversely, if both the buyer and the writer of an option execute a closing trade, the open interest decreases.
Opening transaction** Opération d’ouverture*	An addition to, or creation of, a trading position. An opening purchase transaction adds long options to an investor’s total position, and an opening sale transaction adds short options. An opening option transaction increases that option’s open interest.
Option** Option*	A contract that gives the owner the right, but not the obligation, to buy or sell a particular asset (the underlying stock) at a fixed price (the strike price) for a specific period of time (until expiration). The contract also obligates the writer to meet the terms of delivery if the owner exercises the contract right.
Option buyer *Acheteur d’une option	An investor who buys an option contract. The buyer of an option pays a premium to its writer in exchange for the right to exercise the option according to the terms of the contract or to let it expire worthless. The option buyer can also resell the option on the market until its expiry date.
Option class *Classe d’options	All of the option contracts (call options and put options) that have the same underlying interest.
Option Greeks (Greeks) *Coefficients grecs	A group of five indicators (delta, gamma, rho, theta, and vega) used to assess the price sensitivity of an option to specific determining factors marginal variations.
Option period** Durée de l’option*	The time from when a buyer or writer of an option creates an option contract to the expiration date; sometimes referred to as an option’s lifetime.
Option pricing curve** Courbe d’évaluation d’une option*	A graphical representation of the estimated theoretical value of an option at one point in time, at various prices of the underlying stock.
Option pricing model *Modèle d’évaluation des options	A mathematical model or formula used for options pricing, based on the current underlying interest price, the expected dividends, the option’s strike price, the expected risk-free interest rate, the time to expiration, and the expected underlying interest volatility. The Black-Scholes model was the first widely used option pricing model.
Option series *Série d’options	All options in the same class that have the same strike price and the same expiry date.
Option spread *Écart sur options	A trading strategy involving the purchase and the sale of options.
Option strategy *Stratégie sur options	A trading strategy involving options.
Option type *Type d’option	The classification of an option contract as a call option or a put option.
Optionable stock** Titre sous-jacent d’options*	A stock on which listed options are traded.
Out-of-the-money option *Option hors jeu	Either a call option that has a strike price above the underlying interest’s price, or a put option that has a strike price below the underlying interest’s price.

P

Parity** Parité*	A term used to describe an option contract’s total premium when that premium is the same amount as its intrinsic value. For example, an option is ‘worth parity’ when its theoretical value is equal to its intrinsic value. An option is said to be ‘trading for parity’ when an option is trading for only its intrinsic value. Parity may be measured against the stocks last sale, bid or offer.
Payoff diagram** Diagramme des résultats possibles*	A chart of the profits and losses for a particular options strategy prepared in advance of the execution of the strategy. The diagram is a plot of expected profits or losses against the price of the underlying security.
Physical delivery option** Option entraînant une livraison physique*	An option whose underlying entity is a physical good or commodity, like a common stock or a foreign currency. When its owner exercises that option, there is delivery of that physical good or commodity from one brokerage or trading account to another.
Pin risk** Risque de coincement*	The risk to an investor (option writer) that the stock price will exactly equal the strike price at expiration (that option will be exactly at-the-money). The investor will not know how many of their written(short) options will be assigned or whether a last second move in the underlying will leave any long options in- or out-of-the-money. The risk is that on the following Monday the option writer might have an unexpected long (in the case of a written put) or short (in the case of a written call) stock position, and thus be subject to the risk of an adverse price move.
Position trading** Établissement de positions durables*	An investing strategy in which open positions are held for an extended period.
Premium (option premium) (option price) *Prime	The price that the buyer pays to the seller for the rights associated with the option contract.
Profit/loss graph** Diagramme des gains et des pertes*	A graphical presentation of the profit and loss possibilities of an investment strategy at one point in time (usually option expiration), at various stock prices.
Put option (put) *Option de vente	An option contract that gives the holder the right (with no obligation) to sell a specified quantity of the underlying interest at a specified strike price, at a time of their choosing until the contract expiry date (or only on the expiry date in the case of a European option), and that requires the writer to buy the underlying interest according to these terms should the holder exercise their right.

R

Ratio spread** Écart sur ratio*	A term most commonly used to describe the purchase of an option(s), call or put, and the writing of a greater number of the same type of options that are out-of-the-money with respect to those purchased. All options involved have the same expiration date.
Ratio write** Vente d’options d’achat partiellement couvertes par l’achat de la valeur sous-jacente*	An investment strategy in which stock is purchased and call options are written on a greater than one-for-one basis (more calls written than the equivalent number of shares purchased).
Resistance** Résistance*	A term used in technical analysis to describe a price area at which rising prices are expected to stop or meet increased selling activity. This analysis is based on historic price behavior of the stock.
Reversal** Conversion inverse*	An investment strategy used mostly by professional option traders in which a short put and long call with the same strike price and expiration combine with short stock to lock in a nearly riskless profit.
Rho *Rho	A measure of the marginal variation of an option’s premium based on the marginal variation of the risk-free rate, all other things being equal. The rho of a call option has a positive value; the rho of a put option has a negative value.
Roll a position, to *Reporter une position	To close a position and simultaneously open a new similar position expiring at a later date.
Rollover (roll forward) *Report de position	The replacement of a position with a similar position expiring at a later date.

S

Sector index** Indice sectoriel*	An index that measures the performance of a narrow market segment, such as biotechnology or small capitalization stocks.
Security *Valeur mobilière	A financial instrument that can be traded on an exchange or over the counter, such as a stock, a share, a bond, a subscription right, or a warrant.
Settlement** Règlement*	The process by which the underlying stock is transferred from one brokerage account to another when equity option contracts are exercised by their owners and the inherent obligations assigned to option writers.
Settlement price** Prix de règlement*	The official price at the end of a trading session. OCC establishes this price and uses it to determine changes in account equity, margin requirements and for other purposes.
Short option position** Position vendeur sur option*	The position of an option writer that represents an obligation on the part of the option’s writer to meet the terms of the option if its owner exercises it. The writer can terminate this obligation by buying back (cover or close) the position with a closing purchase transaction.
Short stock position** Position vendeur sur action*	A strategy that profits from a stock price decline. It is initiated by borrowing stock from a broker-dealer and selling it in the open market. This strategy is closed (covered) later by buying back the stock and returning it to the lending broker-dealer.
Spin-off dividend** (spin-off) Dividende de scission*	A stock dividend issued by one company in shares of another corporate entity, such as a subsidiary corporation of the company issuing the dividend.
Standard deviation *Écart type	A measure of the distribution of a dataset relative to its mean, calculated as the square root of the variance. One use of the standard deviation in finance is to measure the volatility of the price or value of a security, an index, a commodity, a currency, or a derivative based on daily changes.
Stock dividend** Dividende en actions*	A dividend paid in shares of stock rather than cash.
Stock split** Fractionnement d’actions*	An increase in the number of outstanding shares by a corporation through the issuance of a set number of shares to a shareholder for a set number of shares that the shareholder already owns. For example, a corporation might declare a 2-for-1 stock split. This means that for every share of stock an investor owns, he/she will be given another, thus owning two shares instead of one. There will be a corresponding reduction in equity value per share. In this case, the new shares (post-split) will be worth one-half their previous value but the investor will own twice as many shares.
Straddle *Stellage	A trading strategy involving the simultaneous purchase (or sale) of a call option and a put option with the same characteristics (same underlying interest, expiry month, and strike price).
Strangle *Stellage élargi	A trading strategy involving the simultaneous purchase (or the sale) of a call option and a put option on the same underlying interest, with the same expiry month but with different strike prices.
Strike price (exercise price) *Prix de levée	The price specified in the option contract at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying interest.
Suitability** Convenance*	A requirement that any investing strategy fall within the financial means and investment objectives of an investor or trader.
Support** Support*	A term used in technical analysis to describe a price area at which falling prices are expected to stop or meet increased buying activity. This analysis is based on previous price behavior of the stock.
Synthetic long call** Option d’achat synthétique en position acheteur*	A long stock position combined with a long put of the same series as that call.
Synthetic long put** Option de vente synthétique en position acheteur*	A short stock position combined with a long call of the same series as that put.
Synthetic long stock** Actions synthétiques en position acheteur*	A long call position combined with a short put of the same series.
Synthetic position** Position synthétique*	A strategy involving two or more instruments that have the same risk-reward profile as a strategy involving only one instrument.
Synthetic short call** Option d’achat synthétique en position vendeur*	A short stock position combined with a short put of the same series as that call.
Synthetic short stock** Actions synthétiques en position vendeur*	A short call position combined with a long put of the same series.

T

Technical analysis** Analyse technique*	A method of predicting future stock price movements based on the study of historical market data such as the prices themselves, trading volume, open interest, the relation of advancing issues to declining issues, short selling volume and others.
Tick** Échelon de cotation*	The minimum price increment for an option’s bid or ask.
Time decay** Érosion de la valeur temps*	A term used to describe how the theoretical value of an option erodes or reduces with the passage of time. Time decay is specifically quantified by Theta.
Theta *Thêta	A measure of the marginal variation of an option’s premium based on the passage of time until the option’s expiry, all other things being equal. Also referred to as time decay. Time decay is not linear. It tends to accelerate as the expiry date approaches.
Time value (time premium) (extrinsic value) *Valeur temps	The portion of an option’s premium that represents the remaining time until the expiry of the option contract and the fact that the factors which determine the value of the option’s premium can change during this period. The time value is equal to the difference between the option’s premium and the intrinsic value. The time value is usually positive and decreases with the passage of time in a non-linear fashion.
Transaction costs** Frais d’opération*	All of the charges associated with executing a trade and maintaining a position. These include brokerage commissions, fees for exercise and/or assignment, exchange fees, SEC fees and margin interest. In academic studies, the spread between bid and ask is taken into account as a transaction cost.

U

Uncovered call option writing** Vente d’une option d’achat non couverte*	A short call option position in which the writer does not own an equivalent position in the underlying security represented by his or her option contracts.
Uncovered put option writing** Vente d’une option de vente non couverte*	A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put.
Underlying interest (underlying) (underlying asset) *Valeur sous-jacente	An interest that underlies and determines the value of a derivative instrument. The underlying interest may be a security, a derivative, a currency, a commodity, any other asset, or an index.

V

Vanilla option (plain vanilla option) (simple option) *Option classique	A call or put option that has no unusual characteristics. Exchange-traded options are vanilla options.
Vega *Véga	A measure of the marginal variation of an option’s premium based on the marginal variation of the underlying interest’s implied volatility, all other things being equal.
Vertical spread** Écart vertical*	Most commonly used to describe the purchase of one option and writing of another where both are of the same type and of same expiration month, but have different strike prices.
Volatility *Volatilité	The level of variability of a rate or a security’s price through time as measured by the standard deviation of such rate or security’s price. In general, high volatility implies higher risk.

W

Writer
(option writer)
(option seller)

*Vendeur d’une option

The investor who writes (or sells) an option. The option writer receives a premium from the buyer. Should there be an assignment, the writer has to fulfill their obligation to sell (in the case of a call option) or to buy (in the case of a put option) the underlying interest at the stated strike price. They can also buy back the option on the market until its expiry date before a possible assignment takes places.

* Equivalent term in French

** The current definition is taken from the Options Industry Council’s Options Glossary.

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