All-or-none order: An order that must be completely filled or not filled at all.

American-style option: An option contract that can be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options are American style. All stock options are American style.

American Stock Exchange (Amex): One of five U.S. exchanges that trade options.

Arbitrage: The process by which professional traders simultaneously buy and sell similar securities for a profit at theoretically zero risk. Risk in arbitrage occurs when historical relationships that were expected to hold no longer apply, or when expected events like an announced takeover fail to materialize.

Asked price: lowest price a seller is willing to accept for a security (also called the “offer price”).

Asset: A resource that has economic value to its owner. Cash, accounts receivable, inventory, real estate, and securities are examples of assets.

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

At-the-market order (also "market order"): An order to purchase or sell at the best available price. At-the-market orders must be executed immediately, and therefore take precedence over all other orders. Market orders to buy tend to be executed at the asked price, while market orders to sell tend to be executed at the bid price.

At the money: An option is "at the money" if its strike price is equal to the market price of the underlying security.

Automatic exercise: A protection procedure whereby the Options Clearing Corporation (OCC) attempts to protect the holder of an expiring in-the-money option on behalf of the trader by automatically exercising the option.