Understanding Equity Options - The Options Clearing Corporation

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AppendixExpiration Cycle TablesThe cycles and their available expiration monthsillustrated below apply only to regular-term equityoptions. They do not apply to LEAPS, Weeklys orQuarterlys.January Sequential CycleCurrent Month Available Months*Jan Jan Feb Apr JulFeb Feb Mar Apr JulMar Mar Apr Jul OctApr Apr May Jul OctMay May Jun Jul OctJun Jun Jul Oct JanJul Jul Aug Oct JanAug Aug Sep Oct JanSep Sep Oct Jan AprOct Oct Nov Jan AprNov Nov Dec Jan AprDec Dec Jan Apr JulFebruary Sequential CycleCurrent Month Available Months*Jan Jan Feb May AugFeb Feb Mar May AugMar Mar Apr May AugApr Apr May Aug NovMay May Jun Aug NovJun Jun Jul Aug NovJul Jul Aug Nov FebAug Aug Sep Nov FebSep Sep Oct Nov FebOct Oct Nov Feb MayNov Nov Dec Feb MayDec Dec Jan Feb Maycontinued on following page38
March Sequential CycleCurrent Month Available Months*Jan Jan Feb Mar JunFeb Feb Mar Jun SepMar Mar Apr Jun SepApr Apr May Jun SepMay May Jun Sep DecJun Jun Jul Sep DecJul Jul Aug Sep DecAug Aug Sep Dec MarSep Sep Oct Dec MarOct Oct Nov Dec MarNov Nov Dec Mar JunDec Dec Jan Mar Jun* Available Months = the equity option expiration dates availablefor trading prior to the third Friday of the Current Month. Thereare always 2 near-term and 2 far-term months available. The mostrecently added expiration month is listed in bold-faced type. Thisnew expiration month is added on the Monday following the thirdFriday of the month prior to the Current Month. For example, inthe February Cycle, if the Current Month is September, the mostrecently added expiration (October) would have been added followingthe August expiration. These tables do not apply to equityLEAPS ® , which expire in January of their expiration year, or toWeeklys and Quarterlys.39
Page 2 and 3: The Options IndustryCouncil (OIC) i
Page 4 and 5: Selling Equity Puts 30■ covered p
Page 6 and 7: The purpose of this booklet is to p
Page 8 and 9: FlexibilityOptions are an extremely
Page 10 and 11: Options Compared toCommon StocksLis
Page 12 and 13: Strike PriceThe strike price, or ex
Page 14 and 15: Exercising the OptionIf the holder
Page 16 and 17: puts. Like other exchange-traded eq
Page 18 and 19: VolatilityVolatility is the propens
Page 20 and 21: Buying Equity CallsA call option co
Page 22 and 23: e exercised and you will own 100 sh
Page 24 and 25: you to cover your position prematur
Page 26 and 27: ever, if the price increase occurs
Page 28 and 29: Selling Equity CallsAs a call write
Page 30 and 31: The $6 per share difference between
Page 32 and 33: 1) If the market price of the stock
Page 34 and 35: subsequently drops from $55 to $45
Page 36 and 37: GlossaryAmerican-style option: An o
Page 38 and 39: In-the-money: A call option is in-t
Page 42 and 43: For More InformationBATS Options Ex
Page 44 and 45: Notes42
Page 46: Notes44

Understanding Equity Options - The Options Clearing Corporation

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