139+ Trading Terms Explained

A call option gives the buyer the right — but not the obligation — to purchase 100 shares of a stock at the strike price any time before exp

Delta is an options Greek that measures how much an option's price is expected to change when the underlying stock moves $1 — a call with a

The expiration date is the last day an options contract can be exercised or traded — after this date, the option either expires worthless (i

A futures contract is a standardized agreement to buy or sell a specific asset at a predetermined price on a specified future date — widely

Gamma is the options Greek that measures the rate of change in delta for every $1 move in the underlying stock — high gamma means delta shif

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

A put option gives the buyer the right — but not the obligation — to sell 100 shares of the underlying stock at the strike price before the

The strike price (or exercise price) is the fixed price at which an options contract can be exercised — for a call option, it's the price at

Theta is the options Greek that measures time decay — the rate at which an option's extrinsic (time) value decreases each day as expiration

Vega measures how much an option's price changes for every 1 percentage point change in implied volatility — a vega of 0.10 means the option