OPTION - an option is a contract giving the right to buy or sell 100 shares of stock within a specific time period at a predetermined price.
- CALL OPTION - gives the investor the right to buy 100 shares of stock at a specified price.
- COVERED CALL OPTION - a call option in which you already own the underlying stock.
- PUT OPTION - gives the investor the right to sell 100 shares.
- UNCOVERED CALL OPTION - a call option in which you do not already own the underlying stock.
OPERATING EARNINGS - amount of profits left after subtracting the cost of goods sold and marketing, administrative and general costs from sales. Also called - (EBITDA), which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
OVER THE COUNTER STOCKS - stocks that are not traded in a physical stock exchange but rather via telecommunications and computer terminals. Stocks traded on the Nasdaq are referred to as over the counter stocks.