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Glossary of Options Terms -- M

Margin - To buy a security by borrowing funds from a brokerage house.

Marked-To-Model - A valuation method using financial models for level 2 assets, which are less liquid assets that are hard to value due to an absence of a readily available market.

Market Maker - An exchange member whose function is to aid in the making of a market, by making bids and offers for his account in the absence of public buy or sell orders. Read All About Market Makers Here!

Market Order - An order to buy or sell securities at the current market. Read All About Options Orders Here!

Market On Close (MOC) - An option trading order that fills a position at or near market close. Read All About Options Orders Here!

Married Put and Stock -a put and stock are considered to be married if they are bought on the same day, and the position is designated at that time as a hedge. Read More About Married Puts Here!

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. The Black-Scholes model is one of the more widely used models.

Moneyness - The strike price of an option in relation to the prevailing price of the underlying asset. Read More About Moneyness Here!

Multiple Compression - Where the overall market sell off over a period of time in order to generally reduce PE ratios across the board due to pessimism about the macro economy.

Multiple Expansion - Where the overall market rallies over a period of time in order to generally increase PE ratios across the board due to optimism about the macro economy.



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