Options field guide
Plain-language guides to earnings, implied volatility, option strategies, target prices, and time decay
331 guides
Learn how contango and backwardation describe VIX futures prices, how roll return works, and why an inverted curve is not a guaranteed stock-market forecast
Read guideLearn why forward volatility comes from differences in total variance, how to calculate it between expirations, and what it does and does not predict
Read guideUnderstand what aggregate gamma-exposure estimates attempt to measure, the dealer assumptions they require, and why models can disagree
Read guideUnderstand how short-gamma hedging can amplify a rally, the conditions a gamma squeeze needs, and why call volume alone cannot confirm one
Read guideLearn the realized volatility formula, why log returns and annualization conventions matter, and how sampling choices change comparisons with implied volatility
Read guideLearn how index variance combines component volatility and correlation, what a dispersion trade isolates, and why weighting and stress regimes matter
Read guideCompare a contract's implied volatility with the VIX Index, including the underlying, horizon, option set, methodology, and decisions each measure supports
Read guideUnderstand how price jumps differ from continuous volatility, why delta hedging cannot trade through a gap, and how options price event and tail exposure
Read guideLearn what kurtosis measures, why normal volatility can understate extremes, how option wings price tail risk, and where samples and hedges can fail
Read guideUnderstand how observed implied volatility differs from a local-volatility state function, how Dupire calibration links them, and why the distinction matters
Read guideLearn how max pain is calculated from open interest, what the number leaves out, and how it differs from pin risk and dealer gamma
Read guideLearn how linked option prints can form spreads, rolls, or hedges and why analyzing one contract can misstate direction and risk
Read guideSee how an uncovered short call exchanges limited premium income for uncapped upside exposure, margin pressure, and assignment obligations
Read guideUnderstand why implied volatility differs across strikes, how downside skew and risk reversals are measured, and why expensive puts do not predict a decline
Read guideLearn how expected move is estimated from implied volatility or an at-the-money straddle, what the 68% rule assumes, and how to test its accuracy
Read guideA practical first-trade guide to goals, rights and obligations, contract size, price drivers, execution, and expiration risk
Read guideSeparate today's contract turnover from outstanding positions and learn why volume does not translate directly into next-day open interest
Read guideLearn why touching a strike, expiring in the money, and finishing a trade profitably require different events, barriers, assumptions, and probability calculations
Read guideUnderstand how matching calls, puts, stock, and financing are linked and why a visible price gap is not automatically an arbitrage
Read guideLearn how volume and open-interest put/call ratios differ, why equity and index ratios need separate baselines, and what can distort the signal
Read guideUnderstand the pricing probability behind options, how it differs from real-world probability, and why delta and option-implied distributions need careful interpretation
Read guideUnderstand the four-leg short iron butterfly, its defined wings, concentrated profit zone, volatility exposure, and assignment uncertainty
Read guideCompare an uncovered short put with a cash-secured put through funding, assignment intent, effective stock cost, and downside exposure
Read guideUnderstand sticky-strike and sticky-delta assumptions, how each moves skew after a spot change, and why the choice can materially alter option scenario P&L
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