Net Asset Value (NAV). The share price at which the fund is bought and sold after deducting any sales or redemption charges. The NAV is calculated each day by adding the closing market value of all securities owned by the fund, plus all other assets, and deducting the fund's liabilities. This sum is then divided by the fund's total number of shares outstanding.

Out of the money (OTM). Qualifies an option that would be worthless if it expired today. It happens for a call option, when the strike price is higher than the market price of the underlying asset, and for a put option, when the strike price is below the market price of the underlying asset.

Price/Earnings Ratio (P/E) . One of the benchmarks used by portfolio managers to help them value companies. It is calculated by dividing a company's share price by its earnings per share.

Put option. Gives the bond holder the right to sell the bond back to the issuer for early redemption. Callable and puttable bonds will be covered in more detail later in the tutorial.