Options pricing3 minute read
What is an option break-even point?
Learn why a break-even point is normally stated at expiration and can differ from an earlier checkpoint
Read guideOptions field guide
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Plain-language guides to earnings, implied volatility, option strategies, target prices, and time decay
331 guides
Options mechanics3 minute read
What is an option contract multiplier?
Understand why an option premium is commonly multiplied by 100 and why contract terms must still be checked
Read guideHedging strategy3 minute read
What is an options collar?
Learn how stock, a protective put, and a covered call set a floor and ceiling for a holding
Read guideOptions mechanics3 minute read
What is early option exercise?
Learn why an option holder may exercise before expiration and why sellers cannot know the exact timing
Read guideVolatility3 minute read
What is IV Percentile?
Learn how IV Percentile compares today's implied volatility with observations in a selected lookback period
Read guideVolatility3 minute read
What is IV Rank?
Understand how IV Rank places current implied volatility within a selected historical high-low range
Read guideOptions Greeks3 minute read
What is option delta?
Learn what delta estimates, why it is not a guarantee, and why it changes with the option
Read guideOptions Greeks3 minute read
What is option gamma?
Understand gamma as the rate at which delta changes when the underlying price moves
Read guideOptions Greeks3 minute read
What is option vega?
Learn how vega estimates an option's sensitivity to a change in implied volatility
Read guideOptions pricing2 minute read
What are intrinsic value and time value in options?
Understand the two components that can make up an option premium before expiration
Read guideOptions fundamentals2 minute read
What do in the money, at the money, and out of the money mean?
Learn how an option's strike compares with the underlying price and why the meaning differs for calls and puts
Read guideOptions trading3 minute read
What do open interest and liquidity tell you about an option?
Understand the difference between outstanding contracts, trading activity, and the ability to transact near a fair price
Read guideOptions strategies3 minute read
What is a bull call spread?
Understand the defined debit, capped upside, and expiration tradeoffs of buying one call and selling another
Read guideOptions strategies3 minute read
What is a cash-secured put?
Learn the obligation behind a short put, the role of reserved cash, and why the premium does not eliminate downside risk
Read guideOptions strategies3 minute read
What is a covered call?
Understand how owning stock and selling a call creates income, a capped upside, and assignment exposure
Read guideOptions strategies3 minute read
What is a protective put?
Learn how a long put can set a defined stock-price floor through expiration while retaining stock upside
Read guideOptions trading2 minute read
What is an option bid-ask spread?
Learn what the bid and ask represent, why their difference matters, and how it can affect an execution
Read guideVolatility3 minute read
What is implied volatility in options?
Learn what implied volatility measures, what it does not predict, and why it changes option premiums
Read guideOptions mechanics3 minute read
What is option assignment?
Learn why a short option can create a share-delivery or share-purchase obligation before or at expiration
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