Options field guide
Plain-language guides to earnings, implied volatility, option strategies, target prices, and time decay
331 guides
Learn how a short or reverse calendar spread works with calls or puts, including credit, large-move thesis, unknown loss region, negative theta, assignment, margin, and exits.
Read guideCalculate uncovered short call maximum profit, unlimited loss, expiration break-even, contract exposure, margin, fees, IV, early assignment, and stock delivery risk.
Read guideCalculate uncovered short put maximum profit, stock-to-zero loss, expiration break-even, effective purchase price, margin, fees, IV, assignment, and funding risk.
Read guideCalculate short straddle maximum profit, unlimited upside loss, stock-zero downside loss, two break-evens, multiplier, margin, fees, assignment, and early P&L.
Read guideLearn the short straddle payoff, break-even formulas, theta and volatility exposure, unlimited upside loss, assignment, margin, and expiration risks.
Read guideCompare short straddle and short strangle strikes, premium, break-even width, Greeks, probability claims, margin, assignment, and unlimited tail risk.
Read guideCalculate short strangle maximum profit, unlimited upside loss, stock-zero downside loss, both break-evens, multiplier, margin, fees, assignment, and early valuation.
Read guideLearn the short strangle payoff, strike selection, break-even range, limited premium, unlimited tail risk, theta, volatility, margin, and assignment.
Read guideUnderstand the smallest supermartingale behind optimal stopping, American option exercise, backward induction, and reliable numerical bounds
Read guideUnderstand alpha-stable laws, the generalized Central Limit Theorem, infinite variance, tail parameters, aggregation, early financial evidence, and the diagnostics needed before using stable models
Read guideUnderstand strict and weak stationarity, random walks, unit roots, persistence, mean reversion, half-life, spurious regression, ADF and KPSS tests, structural breaks, and financial diagnostics
Read guideLearn how a stochastic discount factor prices payoffs across time and states, connects risk premia to covariance, and relates to risk-neutral valuation
Read guideUnderstand the stochastic exponential, its jump correction, positivity, martingale tests, measure changes, and role in asset-value dynamics
Read guideCompare stock and index options by underlying, deliverable, multiplier, cash settlement, exercise style, dividends, basis risk, notional size, and expiration.
Read guideLearn the stock repair strategy, its 1-by-2 call structure, lowered break-even goal, capped recovery, continued stock downside, assignment, and expiration risk.
Read guideLearn how superhedging guarantees claim coverage, creates upper and lower price bounds, and connects incomplete markets to martingale-measure duality
Read guideLearn how a binomial tree uses one-step replication, risk-neutral probabilities, backward induction, and early-exercise checks to value options
Read guideUnderstand what the Central Limit Theorem says about standardized sums, which assumptions financial returns can violate, why convergence is not exact, and when square-root-of-time scaling fails
Read guideUnderstand how Cornish–Fisher adjusts normal quantiles with cumulants, how it differs from Edgeworth, and why tail risk estimates need monotonicity and stability checks
Read guideLearn how a limiting scaled cumulant-generating function can produce a large-deviation rate function, which regularity conditions matter, and how the result reaches option tails
Read guideUnderstand entropy maximization under moment and option-price constraints, its exponential-family dual, the role of a reference measure, and the checks needed for an implied distribution
Read guideLearn how the SABR model links a random forward and volatility, how alpha, beta, rho, and vol-of-vol shape the smile, and where its approximation can fail
Read guideUnderstand donor weights, pretreatment fit, convex-hull limits, placebo inference, spillovers, and how synthetic controls evaluate a policy affecting one market or firm.
Read guideCompare VaR and Expected Shortfall definitions, calculations, diversification properties, estimation error, and the backtests needed before using either tail-risk measure
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