Day Order - An order that expires at the end of the trading day if it is not executed. Read All About Options Orders Here!

Day trader / Daytrader - Traders who open and close option positions or multiple option positions all within the same trading day.

Day trading / Daytrading - Trading methodolody that involves making multiple trades that are opened and closed all within the same trading day. Read more about Options Trading Styles.

Debit - An expense, or money paid out from an account. A debit transaction is one in which the net cost is greater than the net sale proceeds.

Debit Spread - Option spreads which you have to pay money to put on. Read more about Debit Spreads .

Decay - See Time Decay

Delta - the amount by which an option’s price will change for a corresponding change in price by the underlying entity. Call options have positive deltas, while put options have negative deltas. Read more about Options Delta.

Delta Neutral - When positive delta options and negative delta options offset each other to produce a position which neither gains nor decreases in value when the underlying stock moves slightly up or down. Such a position will return a profit no matter which way the underlying stock eventually moves as long as the move is significant. Learn How To Perform Delta Neutral Trading.

Delta Spread - A ratio spread that is established as a neutral position by utilizing the deltas of the options involved. The neutral ratio is determined by dividing the delta of the purchased option by the delta of the written option.

Derivatives - A financial instrument whose value is derived in part from the value and characteristics of another financial instrument. Examples of derivatives are options, futures and warrants.

Diagonal Spread - Any spread in which the purchased options have a longer maturity than do the written options as well as having different strike prices. Typical types of diagonal spreads are diagonal bull spreads, diagonal bear spreads, and diagonal butterfly spreads.

Discount - An option is trading at a discount if it is trading for less than its intrinsic value. A future is trading at a discount if it is trading at a price less than the cash price of its underlying index or commodity. See also Intrinsic Value and Parity.

Discount Broker - A brokerage firm that offers low commission rates. Get A List Of Option Brokers Here!

Dividend - When a company pays a share of the profit to existing shareholders. This share of profit may be in cash or options.

Downside Protection - Generally used in connection with covered call writing, this is the cushion against loss, in case of a price decline by the underlying security, that is afforded by the written call option. Alternatively, it may be expressed in terms of the distance the stock could fall before the total position becomes a loss (an amount equal to the option premium), or it can be expressed as percentage of the current stock price.

Dynamic Hedging - A hedging technique which requires constantly rebalancing in order to maintain the hedge ratio.