Ted Spread
The difference between the price of the three-month U.S. Treasury bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month.
Theta
A derivative of the option price equation with respect to the remaining time to expiration of the option. A measure of the sensitivity of the value of the option to the passage of time.
Tick
The smallest allowable increment of price movement for a futures contract. Also referred to as Minimum Price Fluctuation.
Time Value
The amount of money option buyers are willing to pay for an option in the anticipation that, over time, a change in the underlying futures price will cause the option to increase in value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered time value. Also referred to as extrinsic value.
Tracking Error (Annualized)
A measure of the unexplained portion of performance relative to a benchmark. It is calculated by taking the square root of the average of the squared deviations between the investment's returns and the benchmark's returns, then multiplying the result by the square root of 12.
Transparency
Refers to the degree with which knowledge about the organization, portfolio holdings, investment objectives and other criteria of a manager are made available to an investor.
Treynor Ratio
Similar to the Sharpe Ratio, except it use beta as the volatility measurement. Return is defined as the incremental average return over the risk-free rate and then divided by the beta.
Triple Witching Hour
This happens four times a year. The 3rd Friday of March, June, September and December. It occurs when the S&P futures contract expires at the same time as the S&P 100 index option contract and option contract on individual stocks.
