Published
option
vr.tr.option · thing-option
Let an agent explain options factually by type, terms, pricing concepts and risks, without personal investment advice, and flag high-risk products.
Thing Registry Society, people and institutions SOC.ECO
Bundle → Layer → Finding → QuestionsClassifiersWhat it isWhy it existsDistinguishing featuresWhat robots and AI may and may not doMoral aspectsOwnersLinks to other meta-modelsIdentity and identifiersDirect propertiesRecognitionCapabilities and actionsHazards and failure modesStandards and interfacesContext of useSources
Bundle → Layer → Finding → Questions Filled
4 bundles · 8 layers · 8 findings · 16 questions
Contract Terms.
Type
Call or put.
Type
Option type.
- Is it a call or a put, and on which underlying? definition
- Exchange-traded or OTC? definition
Terms
Strike and expiry.
Terms
Key terms.
- What are the strike price, expiry and contract size? measurement
- Is it American or European style? definition
Value Pricing concepts.
Factors
Price drivers.
Factors
Value drivers.
- Which factors affect the option value, in general terms? definition
- What is time decay? definition
Payoff
At expiry.
Payoff
Payoff.
- What is the payoff at expiry for different prices? measurement
- What is the maximum loss? boundary
Risk Losses.
Leverage
Magnified losses.
Leverage
Leverage risk.
- How could leverage magnify losses? boundary
- What does the risk disclosure say? provenance
Writing
Selling options.
Writing
Writing options.
- Is the user writing naked options with potentially unlimited loss? boundary
- Is margin required? provenance
Limits No advice.
Advice
Boundary.
Advice
Advice limit.
- Is the user asking whether to trade options? boundary
- How should the agent refer them to regulated advice? action
Employee options
Compensation.
Employees
Employee stock options.
- Are employee stock options meant, with their own tax and vesting rules? boundary
- Who can advise? action
Classifiers Filled
- Family
- Thing Registry
- Category
- Society, people and institutions
- Entry kind
- noun.possession
- Plane
- SOC
- Domain
- SOC.ECO
- Tags
- document
- Facets: substance
- social
- Facets: origin
- conceptual
- Facets: agency
- inert
- Facets: mobility
- not-applicable
- Facets: scale
- not-applicable
- Facets: affordances
- readable
- Other names and narrower kinds
- naked option, covered option, call option, call, put option, put, straddle, incentive option, incentive stock option, stock option, lock-up option
What it is Filled
A financial contract giving the holder the right, but not the obligation, to buy (call) or sell (put) an asset at an agreed price before or at a set date; options can be covered or naked and carry significant risk.
Why it exists Filled
Let an agent explain options factually by type, terms, pricing concepts and risks, without personal investment advice, and flag high-risk products.
Distinguishing features Filled
- Right without obligation for the holder
- Premium paid
- Leverage and time decay
- Writing naked options can mean large losses
What robots and AI may and may not do Filled
Must not
- Trade options on a person's behalf without their explicit instruction and authorization.
- Give personalised recommendations to buy or sell options in place of a licensed adviser.
- Present option strategies as low-risk or guaranteed to profit.
- Help manipulate markets or trade on inside information.
Only with a human decision
- Placing, closing or exercising any option position.
- Deciding whether options suit a person's finances.
May
- Explain how calls and puts work and the risks they carry, in general terms.
- Report public option prices and contract terms from the exchange or issuer.
Moral aspects Filled
- Options can lose a buyer's whole stake, and naked positions can lose more than was invested.
- Inexperienced investors are drawn into risks they do not understand.
Who is affected
- Retail investors
- Counterparties
- Market integrity
Owners Filled
Steward
The holder and writer of each contract; the exchange or clearing house and the financial regulator oversee trading.
Master systems
- Exchange and clearing house records
- Brokerage account records
Links to other meta-models Filled
parent
- oewn-06492177-n - registry parent class
related
- derivative security - category
- underlying asset - reference
- financial regulator - oversight
- option (choice) - another sense
What else AI and robots need to interact with it Filled
Identity and identifiers required Filled
- Vercy registry: vr.tr.option
- Open English WordNet: oewn-13262498-n
Direct properties not applicable Not applicable
Not applicable
Plane SOC: no invented physical properties.
Recognition optional Filled
- Call and put
- Strike price and expiry
- Option in the sense of choice is another sense
- Contracts listed on exchanges or agreed over the counter.
Capabilities and actions required Filled
- explain calls and puts
- understand key terms such as strike and expiry
- recognise risks of writing options
- find regulated advice
Hazards and failure modes required Filled
- Large losses from leverage or naked writing
- Misunderstanding expiry
- Agents giving personal investment advice
Standards and interfaces required Filled
- EU MiFID II complex product rules
- Exchange rules and clearing
- Risk disclosure requirements
Context of use required Filled
- Hedging, speculation and employee compensation (stock options).
- call options
- put options
- covered and naked options
- exchange-traded and OTC options
- employee stock options
Sources Filled
- Open English WordNet 2024, synset oewn-13262498-n - sense and gloss of the concept
- Wiktionary: option - word senses and usage
Open questions
- Should option types be separate entries?
- How should risk warnings be linked?
- How should the choice sense be split off?
Machine files
Provenance
thing registry research (pass 2) · unreviewed
Built from: models/things/publications/thing-option/spec.json