Synthetic positions6 minute read
Synthetic stock with options: structure and hidden obligations
Learn how a matching long call and short put can reproduce stock-like expiration exposure without reproducing every feature of share ownership
Read guideOptions field guide
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Plain-language guides to earnings, implied volatility, option strategies, target prices, and time decay
331 guides
Stochastic volatility11 min read
The Heston Model and Stochastic Volatility Explained
Learn how the Heston model makes variance random, how mean reversion and spot-variance correlation shape options, and why calibration is not prediction
Read guideTryMark decision practice6 minute read
The option trade thesis: write the decision before you see the result
Use a concise decision note to connect your market view, contract choice, volatility assumption, invalidation point, and maximum loss before entering an option trade
Read guideSecond-order Greeks6 minute read
Vanna and Charm: how option Delta changes with volatility and time
Learn what Vanna and Charm measure, why Delta can drift without a stock move, and how to use second-order Greeks without false precision
Read guideVariance exposure10 min read
Variance Swap Explained: Payoff, Replication, and Risk
Learn how a variance swap settles against realized variance, why its notional differs from vega, how option-strip replication works, and where risks remain
Read guideVolatility mathematics9 minute read
Variance vs volatility: the square-root difference that changes pricing
Learn why variance is volatility squared, how each measure aggregates through time, and why VIX, variance swaps, and option risk cannot be compared by simple averages
Read guideVolatility dynamics10 min read
Volatility Clustering and GARCH Explained
Learn why calm and turbulent returns cluster, how GARCH updates conditional variance, what persistence means, and why a forecast is not an option signal
Read guideVolatility context9 min read
Volatility Cone Explained: Put Current IV in Historical Context
Learn how a volatility cone compares current implied volatility with rolling realized-volatility distributions across horizons, and where that comparison can mislead
Read guideVolatility uncertainty10 min read
Volatility of Volatility and VVIX Explained
Learn what vol-of-vol measures, how VVIX is built from VIX options, why it differs from VIX, and how second-order volatility risk changes option P&L
Read guideVolatility pricing9 minute read
Volatility risk premium explained: implied versus realized volatility
Learn what volatility risk premium measures, why implied volatility can exceed subsequent realized volatility, and why selling options is not free income
Read guideSurface P&L11 min read
Volatility Skew Carry and Roll-Down Explained
Learn how an option position moves across the volatility surface, what skew carry and roll-down mean, and why spot paths and hedging can reverse them
Read guideSecond-order Greeks9 min read
Volga or Vomma Explained: How Vega Changes with IV
Learn what Vomma or Volga measures, how it adds curvature to a vega estimate, why its sign varies, and how to aggregate it across an option position
Read guideDirectional interpretation5 minute read
Why calls are not always bullish and puts are not always bearish
Understand how buying, selling, opening, closing, hedging, and spread context change the apparent directional meaning of calls and puts
Read guideContract adjustments6 minute read
Adjusted options after splits, mergers, and spinoffs
Learn why corporate actions can change an option deliverable, symbol, strike, multiplier, or expiration and how to verify the new terms
Read guideContract specifications6 minute read
American vs. European options and settlement
Compare exercise style with physical or cash settlement, and check trading deadlines before holding an option into expiration
Read guidePricing inputs5 minute read
How dividends and interest rates affect options
See how dividends and rates enter option values, forward prices, early-exercise decisions, and target-price scenarios
Read guidePayoff analysis6 minute read
How to read an option payoff chart
Read axes, break-even points, capped and uncapped regions, and the difference between an expiration payoff and a dated scenario
Read guideVolatility surface6 minute read
Implied volatility term structure explained
Compare implied volatility across expirations, identify event-driven humps and inversions, and avoid treating unlike horizons as one signal
Read guideBullish strategies5 minute read
Long call strategy: risk, reward, and timing
Learn how a long call works, where its expiration break-even sits, and why stock direction alone does not determine the result
Read guideBearish strategies5 minute read
Long put strategy: downside exposure with defined premium risk
Understand a standalone long put, its limited contractual life, expiration break-even, and the conditions needed for a profitable exit
Read guideTrade preparation6 minute read
Options entry and exit checklist
Check the contract, thesis, sizing, liquidity, events, assignment, target, and invalidation rules before opening an options position
Read guideOption orders5 minute read
Sell to open vs. sell to close
Distinguish creating a short option obligation from exiting a long option, and verify the position effect before submitting an order
Read guideOption valuation6 minute read
Theoretical option value vs. market price
Understand what an option-pricing model estimates, what bid and ask prices represent, and why a model output is not an executable quote
Read guideSpread risk6 minute read
What happens to an option spread at expiration?
Understand partial assignment, exercise decisions, after-hours moves, and the stock or cash exposure a multi-leg spread can leave behind
Read guide