Options Glossary: I

Immediate-or-cancel order (IOC)

A type of option order that gives the trading crowd one opportunity to take the other side of the trade. After announcement, the order is either partially or totally filled with any remaining balance immediately cancelled. An IOC order, considered a type of day order, cannot be used as part of a good-‘til-cancelled order since it is cancelled shortly after being entered. The difference between fill-or-kill (FOK) orders and IOC orders is that an IOC order may be partially executed.

Implied volatility

The volatility percentage that produces the best fit for all underlying option prices on that underlying stock. See also Individual volatility.

In-the-money / In-the-money option

A term used to describe an option with intrinsic value. For standard options, a call option is in-the-money if the stock price is above the strike price. A put option is in-the-money if the stock price is below the strike price.


A compilation of several stock prices into a single number. Example: the S&P 100 Index.

Index option

An option whose underlying interest is an index. Generally, index options are cash-settled.

Individual volatility

The volatility percentage that justifies an option's price, as opposed to historic volatility or implied volatility. A theoretical pricing model can be used to generate an option's individual volatility when the five remaining quantifiable factors (stock price, time until expiration, strike price, interest rates and cash dividends) are entered along with the price of the option itself.


A professional investment management company. Typically, this term describes money managers such as banks, pension funds, mutual funds and insurance companies.

Intrinsic value

The in-the-money portion of an option's premium. See also In-the-money.

Iron butterfly

An option strategy with limited risk and limited profit potential that involves both a long (or short) straddle, and a short (or long) strangle. An iron butterfly contains four options. It is equivalent to a regular butterfly spread that contains only three options. For example, a short iron butterfly might include buying 1 XYZ May 60 call and 1 May 60 put, and writing 1 XYZ May 65 call and writing 1 XYZ May 55 put.


Nasdaq ISE, LLC

Nasdaq ISE

ISE Gemini

Nasdaq GEMX, LLC

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