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Calendar Spread
An option strategy in which a short-term option is sold and a longer-term option is bought, both having the same striking price. Either puts or calls may be used. 

Capped-Style Option
All binary options are capped-style options since the value of the option or structure of options has to remain between o and 1 (for wholesale digital options markets, e.g. interbank FX) or 0 and 100 for retail.

Carrying Cost
The interest expense on a debit balance created by establishing a position.

Cash-Based
Binary options are very much cash-based except in the case of the first leg of a (conditional) barrier option that converts into a deliverable entity, e.g. an option on a stock.

Cash Settlement
The process by which the terms of an option contract are fulfilled through the payment or receipt of the losings or winnings, respectively.

CBOE
The Chicago Board Options Exchange; the first national exchange to trade listed stock options.

Class (of Options)
Option contracts of the same type (call or put) and Style (American, European) that cover the same underlying security.

Closing Purchase
A transaction in which the purchaser’s intention is to reduce or eliminate a short position in a given series of options.

Closing Sale
A transaction in which the seller’s intention is to reduce or eliminate a long position in a given series of options

Closing Transaction
A trade that reduced an investor’s position. Closing buy transactions reduce short positions and closing sell transactions reduce long positions.  See also Opening Transaction.

Combination
Any position involving both binary call options and binary put options that is not a straddle.

Contingent Order
An order which can be executed only if another event occurs; i.e. “sell Jan 550 Calls if underlying asset is greater than 560”.

Conventional Options

Conventional options is the term used for the kind of options that are traded at most mainstream exchanges. Whereas  binary options prices are restricted to 0 – 100, conventional options have unlimited upside and downside. Also conventional options are usually exercisable into the underlying asset as opposed to binaries that are generally cash settled.

Conversion Arbitrage
A riskless transaction in which the arbitrageur buys the same strike, same expiry put and call for less than 1. Alternatively sells the same strike, same expiry for greater than 1.

Cover
To buy back as a closing transaction an option that was initially written.

Covered Call
An option strategy in which a call option is written against long stock.

Covered Call Option Writing
A strategy in which one sells call options while simultaneously being long the underlying security.

Covered Put Option Writing
A strategy in which one sells put options while simultaneously being short the underlying security.

Cycle
The expiration dates applicable to various classes of options.