Trading Dictionary
139+ Trading Terms Explained
Plain-English definitions for active traders - from order types and chart patterns to options Greeks and trader slang.
Implied volatility (IV) is the market's forward-looking estimate of how much a stock will move, derived from current option prices — high IV
An option is in the money (ITM) when exercising it immediately would be profitable — a call option is ITM when the stock price is above the
IV crush is the rapid collapse in implied volatility immediately after a major binary event — such as earnings, an FDA decision, or a Fed an
Open interest is the total number of outstanding (open) options contracts that have not been exercised, expired, or closed — it measures how
Option premium is the total price you pay to buy an options contract, composed of two parts: intrinsic value (the amount the option is alrea
An option is out of the money (OTM) when exercising it immediately would not be profitable — a call is OTM when the stock price is below the
