SHORT CALL – This is a position where I am selling a call, sometimes against a block or lot of shares of stock that will benefit from either a slow rise up to the strike price, or flat price action.
STRIKE PRICE – Is the target price on the contract where it could become actionable for the buyer of said contract. If I sell a CALL for June 20th at a price of $55, then the strike price is $55.
SHORT PUT – This means selling a contract that should the price be breached, then I as the seller would be in a position where I would have to buy stock at the price agreed upon in the contract.
REALIZED GAIN – Once an option, or stock has gone through both a purchase and a sale (not neccesarily in that order) a realized gain, or loss is calculated. Read more here.
ROLL an OPTION – This is done when you decide to close an option, and open another one immediately. If the option is “short” you will pay a DEBIT to close the option, but will receive a CREDIT to open the new option.
PULLING an OPTION – Sometimes I have an option in a future position that I wish to pull inward in time to take advantage of a price action. This is still technically a ROLL, but I will refer to it as PULLING because I am rolling the option inward. I will sometimes also refer to it as REELING in a option because it’s almost like reeling in a fish to catch it more quickly.
LOG – Every trade should have a log entry. This used for both calculations, and also a chance to explain to yourself why you entered or closed a trade, and what the logic behind the trade was. This is essential in learning over time and improving abilities.