Online Futures Options Trading Vocabulary
Day Trading has a whole set of its own vocabulary
. Trading eminis involves calls, puts, contracts, options, and a lot of other financial jargon that newcomers or those not involved in day trading would not understand. Whether you are interested in starting emini futures trading yourself or just want to learn more, you should start with a basic understanding of the related vocabulary.Some of the important keywords related to eminis are:
Option: Buyers do not have the obligation to buy or sell contracts, but they do have the right. Thanks to options they have until a certain date to make a decision regarding the purchase or the sale.
o Call option: A call option is in regards to the right to purchase the futures contract during the option time period.
o Put option: A put option is in regards to the right to sell the futures contract during the option time period.
o Option buyer: The person who has the rights to purchase the contracts or sell, depending on if the option is a call or a put.
o Option seller: The person who communicated the rights of the option to the option buyer.
Premium: This is the price that the option writer is given and that the option writer pays. There are various factors that affect the premiums.
Strike price: The confirmed price that the buyer of a call is able to buy the contract at, or that the buyer of a put is able to sell the contract at.
Underlying contract: The futures contract with the details of the purchase or of the sale.
Expiration: Eminis run on a specific cycle, with expiration dates marking the last day that you can sell or purchase a contract before it loses its value.
The best place to read and get a full understanding of the vocabulary that goes along with day trading, as long as learn the tools, techniques, and systems, is with day trading books. A futures trading course will also provide you with more personalized lessons and hands on practice, increasing your confidence in trading.
Online Futures Options Trading Vocabulary
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