OPTIONS GLOSSARY
Plain-language definitions.
A growing educational reference. Definitions are general information only.
Implied volatility
What implied volatility represents in an option price and why it can change without the underlying moving.
Volatility skew
Why implied volatility can differ across strikes and expiries for the same underlying.
Iron condor
A four-leg options structure with capped risk and capped potential payoff.
Time value
Placeholder for a reviewed explanation of the time component of option prices.
Option Greeks
Placeholder for a reviewed guide to Delta, Gamma, Theta and Vega.
Open interest
Placeholder for a reviewed guide to outstanding option contracts.
Put-call ratio
Placeholder for a reviewed guide to a commonly used options activity ratio.
Liquidity
Placeholder for a reviewed guide to bid–ask spreads, depth and execution risk.
Bid–ask spread
Placeholder for a reviewed guide to quoted execution cost.
Paper trading
Placeholder for a reviewed guide to simulated trade learning and its limits.
Risk and reward
Placeholder for a reviewed guide to defining downside and upside before a trade.
Earnings risk
Placeholder for a reviewed guide to price and volatility risk around results.
Expiry risk
Placeholder for a reviewed guide to accelerated option behaviour near expiry.