Backspread - Options Trading Strategies designed to profit from volatile market conditions.

Backwardation - A term originating from the oil market. This is when near months implied volatility is higher than farther month implied volatility. This usually implies that a rally might stage within the next 20 days.

Barrier Options - Exotic options which comes into existence or goes out of existence when certain prices has been reached. Read More About Barrier Options Here!

Bearish - An opinion that expects a decline in price, either by the general market or by an underlying stock, or both.

Bear Spread - an option strategy that makes its maximum profit when the underlying stock declines and has its maximum risk if the stock rises in price. The strategy can be implemented with either puts or calls. In either case, an option with a higher striking price is purchased and one with a lower striking price is sold, both options generally having the same expiration date. See also Bull Spread. Options Strategies.

Bear Trap - Fake drop in price that precedes a rally.

Beta - A figure that indicates the historical propensity of a stock price to move with the stock market as a whole.

Bid Price - The price at which a potential buyer is willing to buy.

Bid/Ask Spread - The difference between the prevailing bid and ask price. Generally, option contracts that are more liquid tend to have a tighter Bid/Ask Spread while option contracts that are less liquid and are thinly traded tend to have a wider Bid/Ask Spread. Read About Bid Ask Spreads And Option Quotes Here.

Black-Scholes Model - A mathematical formula designed to price an option as a function of certain variables-generally stock price, striking price, volatility, time to expiration, dividends to be paid, and the current risk-free interest rate. Read More About Black-Scholes model.

Box Spread - A complex 4 legged options trading strategy meant to take advantage of discrepanies in options prices for a risk-free arbitrage.
Learn More About Box Spreads.

Break - Even Point-the stock price (or prices) at which a particular strategy neither makes nor loses money. It generally pertains to the result at the expiration date of the options involved in the strategy. A dynamic break-even point is one that changes as time passes.

Breadth - The net number of stocks advancing versus those declining. When advances exceed declines the breadth of the market is inclining. When the declines exceed advances the market is declining.

Breakout - What occurs when a stock price or average moves above a previous high resistance level or below a previous low support level.

Bullish - An opinion in which one expects a rise in price, either by the general market or by an individual security.

Bull Spread - an option strategy that achieves its maximum potential if the underlying security rises far enough, and has its maximum risk if the security falls far enough. An option with a lower striking price is bought and one with a higher striking price is sold, both generally having the same expiration date. Either puts or calls may be used for the strategy. Options Strategies.

Bull Trap - Fake rallies that precedes bear trends.

Butterfly Spread - A neutral option strategy that has both limited risk and limited profit potential, constructed by combining a bull spread and a bear spread. Three striking prices are involved, with the lower two being utilized in the bull spread and the higher two in the bear spread. The strategy can be established with either puts or calls; there are four different ways of combining options to construct the same basic position. Learn Everything About The Butterfly Spread.