Answer and Explanation:
A call option is a contract between a buyer and a seller of a financial instrument, commodity or asset buy a that commodity at certain price within a specified period of time. The buyer has the right to buy that commodity at that price for the period but is not obligated to do so
A put option is the opposite of a call option. It is a contract that gives a person the right to sell at a certain price within a specified period.
the strike price is the price that an option derivative can be sold or bought for example in the call option explained above, the price at which option can be bought from the buyer
The expiration date of an option is the day the contract for derivative option expires or becomes invalid
Exercise value is the profit or value from the option when it is exercised such that the strike price is lower than the underlying asset value for a call option and vice versa for a put option
Option price is the amount that the buyer pays to purchase the option for an underlying asset maybe stock
Time value of an option refers to the time remaining till expiration of option contract imputed into calculation of option premium(option cost) asides intrinsic value used in valuing option premium
Writing an option refers to the option contract whereby one is required to pay a fee to have the right to purchase or sell an underlying asset at a certain price in the future
A covered option refers to a situation whereby an investor owns or holds a a position in an underlying asset and writes or sells an option with an equal position of the underlying asset.
Naked option call refers to a call option sold by an investor who does not own or have a position in the underlying asset. It is the opposite of a covered call option.
In-the-money call also abbreviated ITM refers to call options that have intrinsic value such that the strike price is lower than the market price
Out-of-the-money call abbreviated OTM refers to call options that don't have intrinsic value but extrinsic value such that the strike price is above the market price. They are typically cheap because the market price is significantly lower than the strike price and would have to take some time to catch up with it and be higher
LEAPS which is an abbreviation for Long Term Equity Anticipation Security ate options that take considerably longer time to expire like more than a year or so as against other common options that are short term. LEAPS are publicly traded option contracts.