Option Trading Terminology – FOOTBALL Edition!

A market maker who stood next to me in the pit for 10 years here at CBOE used to always say option trading is the closest thing to professional sports.  With the NFL football season beginning tonight I thought it would be a good time to review option terminology to see if his assessment is really true.

Hang Time – Waiting for the market to open.

Artificial Turf – Synthetic

Ineligible Receiver – Not approved for complex strategies.

Down – How you feel after a losing trade.

First Down – First losing trade.

Punt – The act of closing out a losing trade.

Intentional Grounding – Throwing mouse at flat screen after punt.

Pooch Kick – Don’t do that.

Franchise Player – Trades CMG, MCD, SBUX

Play Clock – Time decay.

Pylon – What some pit traders try to do.

Roll-Out – You calendar spread traders do this all of the time.

Stiff Arm – Overtrading.

Delay of Game – 3 year paper trader.

Too Many Men on the Field – Margin Call

Pump Fake – Thought short…going long.

In the Flat – Delta Neutral

Fair Catch – Breakeven

Long Snapper – LEAPS trader

Cheap Shot – Buying out-of-the-money weeklys.

Safeties – Puts

Free Safety – No cost collar.

Hand off – Friend watching your position while you’ve gone fishin’.

Home Field Advantage – Trading out of your house.

Personal Foul – Trading out of your house in your underwear.

Man in Motion – Constantly changing your market forecast.

Nickel Back – Buying back your short options for a plain nickel.

In the Pocket – Taking money out of your trading account.

Cover 2 – Trading 2 covered calls.

Clipping – Cutting your losses.

Coin Toss – Determines whether you are bullish or bearish.

Audible – Adjusting a losing trade.

Double Coverage – Two protective puts.

Odds – Delta

Point Spread – Bid x Ask

Deflategate – Volatility Crush

Yep, he was right!  Trading options is just like professional sports.  Enjoy the football season and I hope all your trades are good ones!