Uncovered Options Trading System
Contract: Contract is a term of reference describing a unit of trading for a commodity future or option. At the same time contract is an agreement to buy or sell a specified commodity, detailing the amount and grade of the product and the date on which the contract will mature and become deliverable.
Contract Month: Contract Month (also referred to as Delivery Month) is the month in which delivery is to be made in accordance with the terms of the futures contract.
Delivery: Delivery is the transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. It is the tender and receipt of the actual commodity, the cash value of the commodity, or of a delivery instrument covering the commodity (e.g., warehouse receipts or shipping certificates), used to settle a futures contract. Each futures exchange has specific procedures for delivery of a cash commodity. Some futures contracts, such as stock index contracts, are cash settled.
Delivery Month: Delivery Month is the specified month within which a futures contract matures and can be settled by delivery or the specified month in which the delivery period begins.
Nearby Delivery Month: Nearby Delivery Month (also referred to as the Spot Month) is the futures contract month closest to expiration.
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Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.