Terms and Definitions
Term

Definition


Call Option  An agreement that gives an investor the right, but not the obligation, to buy an underlying instrument at a specified price within a specific time period. 
Call/Put Ratios  The ratio of Calls divided by Puts. The ratios are measured by Daily Volume, Open Interest and Total Premium Value. 
Contract Size  WTI Crude Oil is 1,000 barrels. Henry Hub Natural Gas is 10,000 Mmbtu's. 
Contract Symbol  CME WTI American Option (LO). CME Natural Gas European Option (LN). Physical CSO (WA). Financial CSO (7A). Average Price Option (AO). 
Daily Volume  The number of contracts executed on a trade day. Measures strike prices that are active in the shortterm. 
Designated Contract Market  Marketplace in which derivatives and other financial instruments are traded. The CME, ICE and Nasdaq are large commodities exchanges. 
Implied Volatility  The volatility estimate for an option knowing the other option price inputs and premium. The volatility implied from the traded market. 
Lots  Represents the standardized quantity of a financial instrument as set out by an exchange. 
Open Interest (OI)  The cumulative number of contracts outstanding. To determine the total open interest we need only to know the totals from one side or the other, buyers or sellers, not the sum of both. Defines a market view built over a longterm time horizon. 
Option Type  American, European, or Spread Option. 
Put Option  An agreement that gives an investor the right, but not the obligation, to sell an underlying instrument at a specified price within a specific time period. 
Total Premium Value  The dollar value of a given contract. Option premium multiplied by either Daily Volume or Open Interest. 
Underlying Asset  WTI Crude Oil. Henry Hub Natural Gas. 
Weighted Average Strike Price  Option strike price weighted by either Daily Volume or Open Interest. 