- share
- A small slice of ownership in a company. Its price is just what buyers and sellers last agreed it was worth.
- P/L
- Profit or loss: what you'd gain or lose versus what you paid, usually measured at some imagined future price.
- payoff diagram
- A picture of every possible outcome at once: the stock's price runs left-to-right, your profit or loss runs up-and-down.Every strategy in this app is drawn this way. Reading one is the single most useful options skill: find where the line crosses zero (breakeven), where it flattens (capped outcomes), and how steep it is (leverage).
- option
- A contract that gives its buyer the right — not the obligation — to buy or sell 100 shares at a fixed price until a fixed date.
- call
- An option giving the right to BUY 100 shares at the strike price. Buyers of calls want the stock to go up.
- put
- An option giving the right to SELL 100 shares at the strike price. Buyers of puts want the stock to go down (or want insurance).
- strike
- The fixed price written into the option contract — the price you'd buy (call) or sell (put) the shares at if you use it.
- expiration
- The date the contract ends. After it, the option either turns into shares/cash (if it's worth something) or disappears worthless.
- premium
- The price of the option itself — what the buyer pays the seller upfront. Quoted per share; one contract covers 100 shares, so a $2.50 premium costs $250.
- contract
- One standard option contract covers 100 shares. Every per-share price you see gets multiplied by 100 in real money.
- long / short
- Long = you bought it and profit when it gains value. Short = you sold it first (collecting the premium) and profit when it loses value.
- breakeven
- The stock price where your trade neither makes nor loses money at expiration — where the payoff line crosses zero.
- leg
- One component of a multi-part strategy. An iron condor has four legs; a covered call has two (the shares and the short call).
- in / out of the money
- In the money (ITM): the option would be worth something if exercised right now. Out of the money (OTM): it wouldn't. At the money (ATM): the strike sits right at the stock price.
- intrinsic value
- The part of an option's price you could collect by using it right now. A call struck at $100 on a $105 stock has $5 of intrinsic value.
- extrinsic value
- Everything above intrinsic — the price of hope and time. It's what you pay for the chance that the stock moves your way before expiration. It always melts to zero by expiry.On the payoff chart, extrinsic value is literally visible: it's the gap between the curved 'today' line and the kinked 'at expiry' line.
- mid price
- Halfway between the highest bid and lowest ask. This app prices entries at the mid; real fills usually land a little worse.
- bid–ask spread
- The gap between what buyers offer (bid) and sellers want (ask). Wide spreads are a hidden cost — you cross the gap on the way in and out.
- liquidity
- How easily you can trade without moving the price. Options with high volume and open interest have tight spreads; illiquid ones quietly tax every trade.
- open interest
- How many contracts currently exist at that strike. A rough gauge of how busy (and therefore fairly priced) an option is.
- theta
- The dollars an option position loses (or a seller collects) per day just from time passing, everything else frozen. Decay speeds up as expiration nears.
- DTE
- Days to expiration. A 30 DTE option expires in 30 calendar days.
- time decay
- The steady melt of extrinsic value as expiration approaches. It's not linear — the last weeks melt fastest.
- exercise
- Actually using the option: buying (call) or selling (put) the 100 shares at the strike. Most options are sold rather than exercised.
- assignment
- What sellers experience when a buyer exercises: you're on the hook to deliver or buy the shares at the strike. It can happen before expiration on American-style options.
- volatility
- How much a stock's price wiggles, stated as an annualized percentage. A 30% vol stock 'typically' drifts about 30% over a year, one standard deviation's worth.
- implied volatility
- The amount of future wiggle option prices are currently charging for. It's not measured from history — it's backed out of what traders are paying today. High IV = expensive options.
- historical volatility
- The wiggle the stock actually delivered, measured from past prices. Comparing it to implied volatility tells you whether options look rich or cheap.
- expected move
- The range the options market is pricing for a stock by some date — roughly a ±1 standard deviation band, so about a 68% chance of staying inside it.
- IV crush
- The sudden collapse of implied volatility after a known event (earnings) resolves. Option prices deflate even if the stock moved your way — the classic beginner ambush.
- vega
- The dollars your position gains or loses when implied volatility rises by one percentage point. Long options are long vega; sellers are short it.
- earnings
- A company's quarterly results announcement — a date the whole market knows in advance. Option prices swell with uncertainty before it and deflate the moment it is over.
- greeks
- The standard sensitivities of an option's price: delta (stock price), gamma (delta's change), theta (time), vega (volatility). They're the dials of this app, with formal names.
- delta
- How many dollars your position gains per $1 move in the stock — equivalently, roughly how many shares it behaves like. An ATM call has a delta near 0.50 (≈50 shares' worth).Delta also doubles as a rough market-implied probability that the option finishes in the money — a 16-delta option is priced like a ~1-in-6 shot.
- gamma
- How fast delta itself changes as the stock moves. Highest for at-the-money options near expiration — which is why 0DTE positions can flip from fine to disaster in minutes.
- covered
- A short option is 'covered' when you already hold the thing you might have to deliver — like owning 100 shares behind a short call. The opposite (naked) has open-ended risk.
- cash-secured
- Backing a short put with the full cash to buy the shares if assigned. It turns 'scary obligation' into 'paid limit order'.
- spread
- Buying one option and selling another of the same type to cap both risk and reward. The sold leg finances the bought one.
- credit / debit
- Debit: you pay to open (long spreads). Credit: you collect to open (short spreads) and hope to keep it. Neither is better — they're mirror images.
- strangle
- A cheaper straddle: buy a put below the stock and a call above it. It pays if the stock moves far enough in either direction — and needs a bigger move than the straddle to get there.
- straddle
- Buying a call and a put at the same strike and expiry. You are not picking a direction — you are betting the stock moves further than the two premiums combined, either way.
- iron condor
- Sell a put spread below the stock and a call spread above it: four legs that collect a credit if the stock stays between the short strikes. Profit is capped at the credit; loss is capped by the wings.
- wing
- The cheap far-out option bought purely as insurance in strategies like iron condors — it defines your worst case.
- probability of profit
- A model's estimate of the odds the position makes at least $0.01 by expiration, assuming prices wander randomly at the current implied volatility. An estimate, not a promise.
- position sizing
- Deciding how much money one trade deserves. The classic guardrail: risk only a few percent of your account on any single idea, because even great odds lose sometimes.
- 0DTE
- Options expiring today. Maximum gamma, maximum theta, maximum adrenaline — statistically where beginners donate money fastest.