Glossary T

Tender Offer

An offer from one company to buy shares of stock of another company from that other company's existing stockholders. Those stockholders are asked to "tender" (surrender) their shares for a specific price (represented by cash, shares in another company, or both), which is usually higher than the current market price of the stock.

Theoretical Value

An estimated price of a call or put derived from a mathematical model, such as the Black-Scholes or binomial models.


An approximation of the decrease in the price of an option over a period of time when all other factors are held constant. Theta is generally expressed on a daily basis. For example, if a call has a price of $3.00 and a theta of 0.10, one day later, with all else unchanged, the call would have a price of $2.90 ($3.00 - (.10 x 1)). Generated by a mathematical model, theta depends on the stock price, strike price, volatility, interest rates, dividends, and time to expiration.


The smallest possible price increment for a stock or option.


The telegraphic system which prints or displays last sale prices and volume of securities transactions on exchanges on a moving tape within a minute after each trade. Also known as the "tape."

Time And Sales

A record of the time, price and volume of each transaction of every stock and option.

Time Decay

Option price erosion over time. Another name for theta.

Time Spread

Another name for calendar spread.

Time Value

Another name for extrinsic value.

Trading Authorization

Written permission from the owner of an account authorizing another person to enter trades on behalf of the owner. Also called Power of Attorney.

Trading Floor

The part of an exchange where the stocks and options are actually bought and sold.

Trading Halt

A temporary suspension of trading in a particular stock due anticipation of a major news announcement or an imbalance of buy and sell orders.

Trading Pit

A particular location on the trading floor of an exchange designated for the trading of a specific stock or options on a specific stock or index.

Transfer Agent

Usually a division of a large bank or other financial institution that keeps records of the names of registered shareholders of a particular stock, the shareholders' addresses, the number of shares owned by each shareholder, and oversees the transfer of stock certificates from one shareholder to another.

Treasury Stock

Shares of stock issued by a company but later bought back by the company. These shares may be held in the company's treasury indefinitely, used for employee bonus plans, reissued to the public, or retired. Treasury stock is ineligible to vote or receive dividends.


Either an uptrend or a downtrend, successive price movements in the same direction in a security over time


A legal relationship in which a person or entity (the trustee) acts for the benefit of someone else.


The classification of an option as either a call or a put.

Technical Analysis

Calculations that use stock price and volume data to identify patterns helping to predict future stock movements. Some technical analysis tools include moving averages, oscillators, and trendlines.