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Ask / Offer price |
The price at which a trader or market maker is willing to sell a contract. |
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Autoquote |
A computer system which continuously calculates theoretical option prices using
models developed jointly by Liffe and market participants. Liffe
disseminates Autoquote prices for most LIFFE Market financial, equity and index
option series. Autoquote prices are not firm but ensure model variables such as
volatility are set correctly in order to keep model prices in line with LIFFE CONNECT™
prices. |
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American option |
An option which is exercisable at any time during its life. |
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Bid price |
The price at which a trader or market maker is willing to buy an instrument. |
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Call option |
An option that gives the buyer the right, but not the obligation, to buy the underlying
security. |
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Delivery |
The seller of the futures contract sends the appropriate cash instrument to the
buyer during the futures expiration period or on the specified date(s). The buyer
pays the futures price (subject to a price factor adjustment). Some futures contracts,
such as stock index futures, are settled by a cash payment rather than by the physical
delivery of the asset. |
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Delivery month (contract month) |
The specified month to which trading a particular futures or options contract relates.
On Liffe these are March, June, September, December. Options may also be
traded on a 1-2-3 month cycle e.g. January, February, March, in addition to the
quarterly cycle. |
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Equity options |
Standard equity options are available on individual UK stocks and the FTSE 100 index. |
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European option |
An option which is only exercisable at expiry. |
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Exercise |
The process by which an option holder executes his right to buy or sell.
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Exercise price |
The price at which the option holder has the right to buy or sell. |
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Expiry |
The last date an option can be traded or exercised. |
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LIFFE Market Feed (LMF) |
An integrated data feed which provides direct access to Liffe's real- time
price data. It contains a comprehensive range of data on all LIFFE Market products,
including quotes, trades, volumes, closing/settlement prices, contract details,
introduction of new series and open interest.
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London Stock Exchange |
Physical exchange based on an order driven system for the trading of quoted UK and
international equity securities. |
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Lots per side |
Number of contract lots (standardised contract sizes) traded by the purchaser or
the seller in a transaction. |
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Open interest |
The net (i.e. either long or short) open positions in a particular future or option
contracts which needs to be either traded out before expiry, or delivered at expiry. |
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Options contract |
A contract giving the holder the right, but not the obligation, to buy (call), or
sell (put), a specified underlying asset at a pre-agreed price, at either a fixed
point in the future (European-style), or at a time chosen by the holder up to maturity
(American-style). Options are available in exchange-traded and over-the-counter
markets. |
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Option expiry |
The last date on which an option may be exercised. For European options, this is
the only date on which options may be exercised. |
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Put option |
An option that gives the buyer the right, but not the obligation, to sell the underlying
asset. |
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Quote vendors |
Providers of quoted real-time prices in recognised exchanges, at a fee, by means
of electronic transfer. |
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Settlement/closing price |
The price used for daily revaluation (mark-to-market) of open positions. |
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Tick |
The standardised minimum price movement of a futures or options contract. |
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Time to expiry |
Period of time remaining until expiry of a futures or option contract. |