The 3Dimensional Trading Breakthrough

Brian Schad
Strangle: A position having a long call and a long put, in which both options have
the same expiration date but different strike prices. This could also be a short call
and a short put having the same expiration date but different strike prices. Most
strangles involve out-of-the-money options.
Strike price: The exercise price in the underlying futures contract at which an
option will be bought or sold. Strike prices can be spaced in irregular increments,
but usually in full cent or 100 point increments.
Time decay: The amount an option premium loses value due to the amount of
time left until option contract expiration. There is no set amount.
Time value: The amount by which an option’s premium exceeds the option’s
intrinsic value. If an option has no intrinsic value, its premium is entirely time
value.
Underlying futures contract: The futures contract upon which the corresponding
option month is based upon. In the event an option is exercised, it is this contract
which will make or take delivery.
Volatility: The amount a futures contract has fluctuated in price within a given
time frame.
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