Topic Guide

OptionsTrading

Strategies, Greeks, and Journaling for Options

49 resources 4 categories

Options trading adds complexity that most journals cannot handle — multi-leg spreads, Greeks tracking, rolling positions, assignment risk. This hub connects every options resource from basic concepts to advanced strategies.

Options Concepts

36 resources

At The Money (ATM)

An option is at the money when the strike price equals or is very close to the current stock price, having zero intrinsic value.

Calendar Spread

Calendar spread is an options strategy that sells a near-term option and buys a longer-dated option at the same strike, profiting from faster theta...

Call Option

A call option gives the buyer the right, but not obligation, to buy an asset at a specific price before expiration.

Covered Call

A covered call involves owning stock and selling call options against it, collecting premium income while capping upside potential.

Credit Spread

A credit spread involves selling one option and buying another at a different strike for a net credit, with defined risk and profit.

Debit Spread

A debit spread involves buying one option and selling another at a different strike for a net debit, with defined risk and profit.

Delta

Delta measures how much an option's price changes for every $1 move in the underlying stock, ranging from 0 to 1 for calls and 0 to -1 for puts.

Expiration

Expiration is the date when an option contract ends and must be exercised, sold, or allowed to expire worthless.

Funding Rate

Funding rate is the periodic payment exchanged between long and short holders in perpetual futures contracts to keep the contract price anchored to...

Futures Contract

A futures contract is an agreement to buy or sell an asset at a predetermined price on a specific future date, with both parties obligated.

Gamma

Gamma measures how much delta changes for every $1 move in the underlying stock, showing the rate of change of directional exposure.

Greeks

The Greeks are risk measures showing how option prices change with underlying price (delta), time (theta), volatility (vega), and rate of change (g...

Implied Volatility

Implied volatility is the market's expectation of future price movement, reflected in option prices. Higher IV means more expensive options.

In The Money (ITM)

An option is in the money when exercising it would be profitable—calls when stock exceeds strike, puts when stock is below strike.

Intrinsic Value

Intrinsic value is the amount by which an option is in the money—the difference between stock price and strike price if profitable.

Iron Butterfly

Iron Butterfly is a four-leg options strategy selling an ATM straddle and buying OTM wings to collect a net credit with defined max profit and max ...

Iron Condor

An iron condor is a neutral options strategy using four options to profit from low volatility within a defined price range.

IV Crush

IV crush is the sharp decline in implied volatility after an event like earnings, causing option prices to drop even if the stock moves your way.

Lot Size

Lot size is the standardized number of units of the underlying asset in one derivatives contract, determining minimum trade size.

Max Pain Theory in Options Trading

Max pain is the strike price at which the greatest number of options contracts expire worthless, inflicting maximum financial loss on options buyer...

Naked Option

Naked option is a short call or put sold without a hedging position, creating asymmetric risk: limited premium collected vs. theoretically unlimite...

Open Interest

Open interest is the total number of outstanding option contracts that have not been closed, exercised, or expired.

Out of The Money (OTM)

An option is out of the money when exercising it would not be profitable—calls when stock is below strike, puts when stock exceeds strike.

Perpetual Futures

Perpetual futures is a derivative contract with no expiration date, kept near spot price via periodic funding rate payments between longs and shorts.

Premium (Options)

Premium is the price paid to buy an option, consisting of intrinsic value plus time value. It's what option buyers pay and sellers receive.

Protective Put

A protective put involves owning stock and buying put options as insurance, limiting downside risk while keeping upside potential.

Put Option

A put option gives the buyer the right, but not obligation, to sell an asset at a specific price before expiration.

Put-Call Ratio

Put-Call Ratio is the volume of put options divided by call options, used to gauge market sentiment — readings above 1.0 signal fear, below 0.5 sig...

Rollover

Rollover is closing a position in an expiring contract and opening the same position in a later-dated contract to maintain exposure.

Straddle

A straddle involves buying a call and put at the same strike and expiration, profiting from big moves in either direction.

Strangle

A strangle involves buying OTM call and put options at different strikes, profiting from very large moves in either direction.

Strike Price

Strike price is the predetermined price at which an option holder can buy (call) or sell (put) the underlying asset.

Theta

Theta measures how much an option loses in value each day due to time decay, expressed as dollars lost per day.

Theta Decay

Theta decay is the accelerating erosion of an option's extrinsic value over time, moving non-linearly and collapsing dramatically in the final 30 d...

Time Value

Time value is the portion of an option's premium above its intrinsic value, reflecting the probability of favorable movement before expiration.

Vega

Vega measures how much an option's price changes for every 1% change in implied volatility of the underlying asset.

Options Strategies

9 resources

Butterfly Spread

The butterfly spread combines a bull spread and bear spread with a shared middle strike, profiting when the underlying stays near the center strike.

Covered Call Strategy

The covered call sells call options against owned stock, generating premium income while capping upside. Popular for income-focused portfolios.

Credit Spread Strategy

Credit spreads sell a closer-to-money option and buy a further-out option, collecting premium with defined risk and defined reward.

Earnings Straddle

Earnings Straddle is an options strategy that profits from large price moves around earnings announcements. Used by intermediate-to-advanced trader...

Implied Volatility Strategy

Implied Volatility Strategy uses IV rank and IV percentile to time option premium selling (high IV) or buying (low IV), helping options traders exp...

Iron Butterfly

Iron Butterfly is a neutral options strategy combining a short ATM straddle with OTM wing protection, used by income-focused traders to profit from...

Iron Condor Strategy

The iron condor sells both a call spread and put spread simultaneously, profiting when the underlying stays within a defined range until expiration.

Options Selling

Options selling is a premium-collection strategy where traders sell puts, calls, or spreads to profit from theta decay and probability. Used by inc...

Wheel Strategy

The wheel strategy generates income by selling cash-secured puts, getting assigned shares, then selling covered calls until shares are called away.

Options Calculators

1 resource

Options Journaling Guides

3 resources
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