An option contract that may be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options in the United States are American-style.

The simultaneous purchase of one asset against the sale of the same or equivalent asset in two different markets to create a riskless profit due to price discrepancies.

While the arbitrage transaction is riskless in theory, in practice, some risks may be present.

The receipt of an exercise notice by an option writer (seller) that obligates him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.

The price at which the market maker is willing to sell. Also called the offer price.

An option is at-the-money if the strike price of the option is equal to the market price of the underlying security.

A mechanism used by the Stock Exchange to fulfill its obligation to the buyer of a security. It is done when the seller is unable to deliver the scrips sold by him. The security in question is offered by a member who has ready possession of the scrips.