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What is P/E?

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Last updated

8 months ago

Date created

Nov 15, 2020

Cards (10)

Unsectioned

(10 cards)

What is P/E?

Front

Price to Earnings is the price of the stock compared to the earnings, a high P/E can mean that the market expects the price to rise.

Back

Gamma

Front

The rate of change of Delta. Gamma is highest when options are at-the-money and close to expiration.

Back

IV

Front

Implied Volatility

Back

Selling a put

Front

Selling the right to short a stock. You hope that it will stay flat or increase. 

Back

Buying a put

Front

Shorting the stock at a specified price, you are hoping that the price plummets so that you can short it high and buy it back low at the current price. 

Back

Theta

Front

Time Decay. Works for you when selling options, against when buying.

Back

Delta

Front

The market's expectation of the options's contract expiring in-the-money. So if Delta is 60 there is a presumed 60% chance that that contract will expire in the money.

Back

Vega

Front

The rate of volatility of the option.

Back

Selling a call

Front

You think that the stock will be flat or decrease in value and are agreeing to sell the stock to someone at a certain price on a certain date. There is unlimited risk with this if there if you have nothing else to cover it. 

Back

Buying a call

Front

You this option will go up before expiration and are agreeing to buy it at a price that you hope is lower then the current stock price at expiration.

Back