BOSS
ENESPT

Reference

Glossary

Every concept and strategy, A to Z →

Delta
How much an option's price is expected to move for a $1 rise in the underlying: between 0 and +1 for a call, between −1 and 0 for a put. Selling the option flips the sign. Read more →
Gamma
How much delta itself is expected to change for a $1 rise in the underlying. Positive for an option you own, negative for one you have sold. Read more →
Vega
How much an option's price is expected to move for a 1 percentage point rise in implied volatility. Positive for an option you own (it gains when implied volatility rises), negative for one you have sold. Read more →
Theta
How much an option's value is expected to change per day, all else equal, purely from time passing. Usually negative for an option you own (the value it loses each day) and positive for one you have sold. Read more →
Rho
How much an option's price is expected to move for a 1 percentage point rise in interest rates: positive for a call, negative for a put. Selling the option flips the sign. Read more →
Capped / Uncapped
Whether a strategy's maximum loss (risk) or maximum gain (reward) is a known, bounded number, or can grow without a fixed limit. Read more →
Breakeven
The underlying price at expiration where a strategy's profit is exactly zero -- above or below it, the position moves into profit or loss. Read more →
Moneyness
Where a strike sits relative to the current underlying price: in the money (has intrinsic value), at the money (strike close to the current price), or out of the money (no intrinsic value). Read more →
Premium
The price paid (if long) or received (if short) for an option, per contract. Read more →
Strike
The fixed price at which an option's holder may buy (call) or sell (put) the underlying. Read more →
Expiry
The date after which an option no longer exists and settles based on the underlying's price at that time. Read more →
Implied Volatility (IV)
The market's expectation of the underlying's future volatility, implied by an option's current price. Read more →
Leg
One individual option (or underlying position) within a multi-part strategy. Read more →
Net Debit / Net Credit
Whether a strategy costs money to enter (debit) or pays money up front (credit), summed across all its legs. Read more →
Slippage
The extra cost of filling an order immediately by crossing the bid-ask spread, instead of at the theoretical mid-price. Read more →
Fee
What the venue charges to trade a contract: a small percentage of the underlying's price, capped at a percentage of the option's own price, so cheap options pay less. Read more →
Forward price
The price agreed today for the underlying on a future date -- for an option, its expiry. Set by the futures market, it usually sits a little above spot, and it is the price options are valued against. Read more →

All Strategies