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Bear Call Spread
A bearish credit spread created by selling a call and buying a higher-strike call, profiting when the stock stays below the short strike.
strategiesBear Put Spread
A vertical spread strategy that profits from moderate price decreases. Buy a higher strike put and sell a lower strike put to reduce cost and define risk.
strategiesBid-Ask Spread
The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask). Wider spreads mean higher trading costs.
metricsBlock Trades
Large option orders (typically 50+ contracts) executed as a single transaction. Often signal institutional conviction.
metricsBull Call Spread
A vertical spread strategy that profits from moderate price increases. Buy a lower strike call and sell a higher strike call to reduce cost and cap risk.
strategiesC
Calendar Spread
A strategy that profits from time decay differences between two expirations. Sell a near-term option and buy a longer-term option at the same strike.
strategiesCash-Secured Put
Selling a put option while holding enough cash to buy the shares if assigned. A core component of the wheel strategy.
strategiesCollar Strategy
A protective strategy combining a long put and short call around an existing stock position, capping both downside risk and upside potential.
strategiesContango
When longer-dated options have higher IV than shorter-dated ones. The normal state of IV term structure.
metricsCovered Call
Selling a call option against shares you own. Generates income from premium while capping upside potential.
strategiesD
Dark Pool
A private exchange where large institutional orders are executed without being visible on public order books, often used to trade large blocks without moving the market.
generalDays to Expiration (DTE)
Number of days until an option expires. Affects time value, theta decay rate, and strategy selection.
generalDelta
The rate of change of an option's price relative to a $1 move in the underlying. A delta of 0.50 means the option gains $0.50 for each $1 stock move.
greeksDiagonal Spread
An options spread using different strike prices AND different expiration dates, combining elements of vertical and calendar spreads.
strategiesE
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I
Implied Move
The expected price range based on ATM straddle pricing. Shows what the market is pricing in for movement.
metricsImplied Volatility (IV)
The market's expectation of future price movement, derived from option prices. Higher IV means options are more expensive.
metricsIron Butterfly
A neutral strategy selling an ATM straddle and buying OTM wings. Profits from minimal price movement with defined risk.
strategiesIron Condor
A four-leg options strategy that profits from low volatility. Combines a bull put spread and a bear call spread to collect premium within a defined range.
strategiesIV Crush
A sharp drop in implied volatility after a known event (earnings, FOMC). Destroys option value for buyers, benefits sellers.
metricsIV Percentile
The percentage of days in the past year where IV was below the current level. More reliable than IV Rank for identifying truly elevated volatility.
metricsIV Rank
Where current IV falls within its 52-week range. IV Rank of 80% means current IV is near the top of its annual range.
metricsIV Term Structure
How implied volatility varies across different expiration dates. Contango (rising) is normal; backwardation signals near-term fear.
metricsIV/HV Ratio
The ratio of implied volatility to historical volatility, indicating whether options are pricing in more or less movement than the stock has actually exhibited.
metricsL
LEAPS
Long-Term Equity Anticipation Securities. Options with expiration dates more than one year out, used for long-term directional bets or stock replacement strategies.
strategiesLiquidity Tier
A classification system that grades options chains based on trading volume, bid-ask spreads, and market depth to indicate execution quality.
metricsLong Calls
Buying call options to profit from price increases. Limited risk (premium paid) with unlimited upside potential.
strategiesLong Puts
Buying put options to profit from price decreases or hedge existing positions. Limited risk with significant profit potential.
strategiesM
Margin Requirement
The amount of capital a broker requires you to hold as collateral when selling options or trading on margin, varying by strategy and risk level.
generalMax Pain
The strike price at which the largest number of option contracts would expire worthless, causing maximum financial loss to option holders.
metricsMoneyness (ITM/ATM/OTM)
Where the strike is relative to stock price. ITM has intrinsic value, ATM is near the price, OTM has no intrinsic value.
generalO
OI Skew
The ratio comparing call open interest to put open interest, revealing whether options traders are positioned for upside or downside moves.
metricsOpen Interest
The total number of outstanding option contracts that have not been settled. Rising OI with rising volume confirms the strength of a trend.
metricsOptions Approval Levels
Broker-assigned tiers (typically Level 1-4) that determine which options strategies a trader is permitted to execute based on experience and account size.
generalOptions Opportunity Score
A proprietary 0-100 scoring system that evaluates options opportunities across five pillars: Value, Activity, Sentiment, Timing, and Liquidity.
generalP
Pattern Day Trader (PDT)
A FINRA designation for traders who execute 4 or more day trades within 5 business days in a margin account, requiring a minimum $25,000 balance.
generalPin Probability
The likelihood that a stock closes near a major strike at expiration due to dealer hedging (gamma exposure).
metricsPoor Man's Covered Call (PMCC)
A diagonal spread that mimics a covered call using a deep ITM LEAPS call instead of stock shares, requiring significantly less capital.
strategiesPosition Sizing
The process of determining how many contracts or shares to trade based on account size, risk tolerance, and maximum acceptable loss per trade.
generalPremium
The price paid to buy an option or received when selling one. Determined by intrinsic value plus time value.
generalProbability of Profit (POP)
The statistical likelihood that a trade will return any profit at expiration, typically derived from option delta or pricing models.
metricsPut Credit Spread
Selling a higher-strike put and buying a lower-strike put for a net credit. Profits when the stock stays above the short strike.
strategiesPut/Call Ratio
The ratio of put volume to call volume. Below 1.0 suggests bullish sentiment; above 1.0 suggests bearish sentiment.
metricsS
Smart Money
Institutional or professional traders whose positioning often foreshadows market moves. Tracked via large block trades and dark pool activity.
metricsStraddle
An options strategy that profits from large price moves in either direction. Buy both a call and put at the same strike price and expiration.
strategiesStrangle
An options strategy that profits from large price moves in either direction. Buy an OTM call and OTM put with the same expiration but different strikes.
strategiesSupport/Resistance (OI Walls)
Price levels with concentrated open interest that act as barriers. Put walls provide support; call walls create resistance.
generalSynthetic Position
An options combination that replicates the payoff profile of another instrument, such as synthetic long stock (long call + short put at the same strike).
strategiesT
Theta
The Greek that measures an option's daily time decay in dollar terms. A theta of -0.05 means the option loses $0.05 in value each day from time passage alone.
greeksTheta Decay
The rate at which an option loses value each day due to the passage of time. Accelerates as expiration approaches.
greeksU
V
Vega
The rate of change in an option's price for a 1% change in implied volatility. Higher for longer-dated options.
greeksVolatility Skew
The difference in implied volatility across strike prices. Typically, OTM puts have higher IV than OTM calls, reflecting demand for downside protection.
metricsVolume Surge
A spike in trading volume significantly above the recent average. May indicate institutional interest or an impending move.
metricsVolume/OI Ratio
Today's volume divided by open interest. High ratios may indicate new positions being established.
metricsW
Wash Sale Rule
An IRS rule that disallows a tax deduction on a security sold at a loss if a substantially identical security is purchased within 30 days before or after the sale.
generalWheel Strategy
A systematic income strategy that cycles between selling cash-secured puts and covered calls. Generates premium while potentially acquiring shares at a discount.
strategies