Off-Exchange Trading refers to a securities transaction which is concluded directly between two parties without involving an exchange as an intermediary. Structured Investments are typically traded off-exchange.
See Ask Price.
A derivative contract between two parties (the writer and the holder) under which the holder has the right (but not the obligation) to buy (in the case of a Call) or to sell (in the case of a Put) the quantity of the Underlying specified in the agreement at the Exercise Price. Rights under an Option can only be exercised in the manner stipulated in the contract, within the relevant Exercise Period. On exercise, both the writer and the holder have obligations to pay or to deliver, as relevant. An Option can be settled through Cash Settlement or through Physical Settlement.
The price to be paid for buying an Option. This is influenced by many different factors, including: remaining Life, interest rates, Strike Price, Spot Price, and Volatility of the Underlying.
The seller of an Option is called the writer of the Option. Whereas the buyer has a discretionary right to exercise the Option, the writer of an Option has an obligation to deliver at the request of the buyer.
Over the counter Options are usually non-standardized and not securitized. The terms and conditions for OTC Options are agreed individually between the parties concerned.
The Strike Price of a Call Option is above (or that of a Put Option is below) the Spot Price of the Underlying.
An Outperformance Option captures the relative outperformance of one asset over another. The correlation between the two assets is one of the key factors in determining the price of an Outperformance Option.