A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Options Trading Terms: D

    Tweet This

DATE OF RECORD (RECORD DATE):

Date on which you must own shares of a stock to be entitled to the dividend payment on that stock. The day after the record date and until the day the dividend is actually paid, the stock trades ex-dividend.

DAY ORDER:

A day order is an order that is "good for the day" and is automatically cancelled if it cannot be executed the day it was placed. Compare to good-til-cancelled (GTC) orders.

DAY TRADE:

A stock or option position that is purchased and sold on the same day.

DAY TRADING:

Buying and selling the same stock or option position in one day's trading session, thus ending the day with no position.

DEALER:

A firm or individual engaged in the business of buying or selling securities for its own account. Thinkorswim is not a dealer.

DEBIT BALANCE (DR):

In a customer's margin account, that portion of the value of stocks that is covered by credit extended by the broker to the margin customer. In other words, the amount of money a customer owes the brokerage firm. (FINRA)

DEBIT SPREAD:

Any option spread where you pay money for the spread. The debit occurs when the amount of premium paid for the option purchased exceeds the premium received for the option sold.

DECK:

The stack of stock or option orders that are to be filled by a broker on the floor of an exchange.

DECLARATION DATE:

The date a company announces the payment date, record date and amount of an upcoming dividend.

DEFERRED:

Refers to "back month" options or futures.

DELAYED OPENING:

Exchange officials can postpone the start of trading on a stock beyond the normal opening of a day's trading session. Reasons for the delay might be an influx of large buy or sell orders, an imbalance of buyers and sellers, or pending important corporate news that requires time to be disseminated.

DELAYED QUOTES:

Stock or option price quotes that are delayed by the exchanges 15 or 20 minutes from real-time.

DELIVERY:

When referring to stock options, delivery is the process of delivering stock after an option is exercised. If a trader is long a call, and he exercises that call, the person who is short that call must deliver the underlying stock to the trader who is long the call. If a trader is long a put, and he exercises that put, the trader will deliver the underlying stock to the person who is short that put. Actually, the delivery of the stock takes place through clearing firms under very specific terms and procedures established by the exchange where the option is traded. See assignment and exercise.

DELTA:

An approximation of the change in the price of an option relative to a change in the price of the underlying stock when all other factors are held constant. For example, if a call has a price of $1.5 and a delta of .33, if the underlying stock moves up $1, the option price would be $1.83 ($1.5 + (.33 x $1.00)). Generated by a mathematical model, delta depends on the stock price, strike price, volatility, interest rates, dividends, and time to expiration. Delta also changes as the underlying stock fluctuates. See gamma.

DERIVATIVE SECURITY:

A security whose value is derived from the value and characteristics of another security, called the underlying security. Calls and puts are derivative securities on underlying stocks.

DESIGNATED ORDER TURNAROUND (DOT):

NYSE's automated order entry system.

DISCOUNT RATE:

The rate that the Federal Reserve Bank charges on short term loans it makes to other banks and financial institutions.

DISCRETIONARY ACCOUNT:

An account in which the customer has given the registered representative authority to enter transactions at the rep's discretion. thinkorswim does not offer this type of account.

DIVIDEND:

A payment made by a company to its existing shareholders. Dividends are usually cash payments made on a quarterly basis. Dividends can also be in the form of additional shares of stock or property.

DIVIDEND FREQUENCY:

Indicates how many times per year (quarterly, semi-annually) a particular stock pays a dividend.

DIVIDEND YIELD:

The annual percentage of return that received from dividend payments on stock. The yield is based on the amount of the dividend divided by the price of the stock and of course fluctuates with the stock price.

DON'T KNOW (DK) NOTICE:

A term used when brokers or traders compare confirmations on a transaction. If one party receives a confirmation on a trade that it does not recognize, that party would send the other party a D.K. notice.

DOWN-TICK:

A term used to describe a trade made at a price lower than the preceding trade. A short sale may not be executed on a down or minus tick.(FINRA)

DOWNTREND:

Successive downward price movements in a security over time.

DUAL/MULTIPLE LISTED:

When the same stock or option is listed on two or more different exchanges. For example, IBM options are traded on the CBOE, PHLX and AMEX.

DUPLICATE CONFIRMATION:

SRO regulations require a duplicate confirmation (of a customer's confirmations) be sent to an employing broker-dealer, if the customer is an employee of another broker dealer. Also, this duplicate confirmation may be sent to a customer's attorney if the request is put in writing. (FINRA)

Top