Key terms glossary
The vocabulary behind everything else on this site, in plain language.
Strike price
The set price at which an option can be exercised — the price you'd buy at (put) or sell at (call).
Expiration date
The date by which an option must be exercised or it expires worthless.
Premium
The amount you're paid upfront for selling an option — yours to keep regardless of what happens later.
Assignment
When you're required to fulfill your obligation — buying shares (put) or selling shares (call) — because the option finished in-the-money.
Implied volatility (IV)
The market's expectation of how much a stock's price will move — higher IV generally means higher option premiums.
Delta
A measure of how much an option's price moves relative to a $1 move in the underlying stock; also loosely used as a rough probability of finishing in-the-money.
In-the-money / out-of-the-money
Whether an option currently has intrinsic value (in-the-money) or wouldn't be worth exercising right now (out-of-the-money).
Days to expiration (DTE)
How many days remain until an option's expiration date — a key factor in how it's priced and scored.