Rajesh Satpute

A moving average is simply an arithmetic mean of a certain number of data points. A 50-day simple moving average is the average closing price of the stock over the last 50 trading days. Moving averages can be used to gauge the direction of price movement in a stocks.

A 100-day simple moving average is the average closing price of the stock over the last 100 trading days. Moving averages can be used to gauge the direction of price movement in a stocks.

A 200-day simple moving average is the average closing price of the stock over the last 200 trading days. Moving averages can be used to gauge the direction of price movement in a stocks.

A 52-week high is the highest price that a stock has traded at during the previous year.

A 52-week low is the lowest price that a stock has traded at during the previous year.

An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor’s loss on a position in a security.

A target price is the projected price level of a stock where investor want to book the profit.

Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. Support can be established with the previous reaction lows.

Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. Resistance can be established by using the previous reaction highs.

Are graphical representations of price movements for a given period of time. They are commonly formed by the opening, high, low, and closing prices of a financial instrument.

ROI measures the amount of return on an investment relative to the investment’s cost. A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.

A strike price is the price at which a specific derivative (Options) contract can be exercised

A put option is said to be in the money when the strike price of the put is above the current price of the underlying stock.

A put option is said to be out of the money if the current price of the underlying stock is above the strike price of the option.

An option is said to be at the money if the current stock price is equal to the strike price. It doesn't matter if we are talking about calls or puts.

Option premium is made up of either time value, intrinsic value or both. The intrinsic value is based on how deep in the money the stock is priced. For a call it is how far above the strike price the stock price is located.

The portion of an option's premium that is attributable to the amount of time remaining until the expiration of the option contract.

The stock price at which any option strategy or combination stock and option strategy has a zero loss and zero gain.

In terms of stocks, the lot is the number of shares you purchase in one transaction. In terms of options, a lot represents the number of contracts contained in one derivative security.

An expiration date in derivatives is the last day that an options or futures contract is valid. Generally European contract are expired on last Thursday. However, when that Thursday falls on a holiday, the expiration date is on the Wednesday immediate preceding the last Thursday.

The price at which the two participants in a futures contract agree to transact at on the settlement date.

A settlement price, in the derivatives markets, is the price used for determining profit or loss for the day, as well as margin requirements. (Settlement price for a futures contract shall be calculated on the basis of the last half an hour weighted average price of such contract).

If stocks/indices future is trading higher than spot price, then stocks/indices is trading with premium (Premium = Future Price –Stock Price)

If stocks/indices future is trading lower than spot price, then stocks/indices is trading with discount.

Open interest is the total number of open or outstanding (not closed or delivered) options and/or futures contracts that exist on a given day, delivered on a particular day.

As the name suggests, it is the ratio of all the Puts/Calls traded every day. If the ratio is more than 1, it means that more puts have traded during the day and if it is less than 1 it means more calls traded during the day.

Beta is a measure of a stock's volatility in relation to the market. It’s represents the tendency of a security's returns to respond to swings in the market.

Implied volatility is the estimated volatility of a security's price. Implied volatility represents the expected volatility of a stock over the life of the option. As expectations change, option premiums react appropriately. Implied volatility is directly influenced by the supply and demand of the underlying options and by the market's expectation of the share price's direction.

Historical volatility is a measure of the volatility of the underlying stock or futures contract. It is known volatility, because it is based on actual, recent price changes of the underlying. Historical volatility can be thought of as the speed (rate of change) of the underlying stock price.

Are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. A very straightforward strategy might simply be the buying or selling of a single option, however option strategies often refer to a combination of simultaneous buying and or selling of options.

The vertical spread is an option spread strategy whereby the option trader purchases a certain number of options and simultaneously sell an equal number of options of the same class, same underlying security, same expiration date, but at a different strike price.

An options strategy involving the simultaneous purchase and sale of two options of the same type, having the same strike price, but different expiration dates.

Delta - Measures the exposure of option price to movement of underlying stock price.Gamma - Measures the exposure of the option delta to the movement of the underlying stock price.Theta - Measures the exposure of the option price to the passage of time.Vega - Measures the exposure of the option price to changes in volatility of the underlying.Rho - Measures the exposure of the option price to changes in interest rate.