A transaction in which the purchaser's intention is to create or increase a long position in a given series of options. A transaction in which the seller's intention is to create or increase a short position in a given series of options. The price of an option contract, determined by the competitive marketplace, which the buyer of an option pays to the option writer for the rights granted by the option contract. All option contracts of the same class that have the same expiration date and strike price. The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract.
Time value is whatever value the option has in addition to the intrinsic value.
The classification of an option contract as either a call or put. A measure of the fluctuation in the market price of the underlying index. Mathematically, volatility is the annualized standard deviation of returns. The seller of an option contract.