Options field guide
All guides · Page 35
Plain-language guides to earnings, implied volatility, option strategies, target prices, and time decay
828 guides
Put/call ratio explained: formula, interpretation, and false signals
Learn how volume and open-interest put/call ratios differ, why equity and index ratios need separate baselines, and what can distort the signal
Read guideRisk-neutral probability: why option-implied odds are not forecasts
Understand the pricing probability behind options, how it differs from real-world probability, and why delta and option-implied distributions need careful interpretation
Read guideSticky strike vs sticky delta: how the volatility surface moves with spot
Understand 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
Read guideThe 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 guideVariance 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 guideVariance 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 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 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 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 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 guideVolatility 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 guideVolga 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
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