Every options term, explained without the jargon.
12 options concepts explained in plain English with real examples, analogies, and common mistakes beginners make. From Delta to Open Interest — no finance degree required.
What Is an Option?
An option is a contract that gives you the right, but not the obligation, to buy or sell a stock at a fixed price by a future date.
BasicsCall Option
A call option gives you the right to buy a stock at a fixed price before expiry. You want the stock to go UP.
BasicsPut Option
A put option gives you the right to sell a stock at a fixed price before expiry. You want the stock to go DOWN.
GreeksDelta
Delta measures how much an option price moves when the underlying moves by 1 point.
GreeksGamma
Gamma measures how quickly delta itself changes when the underlying moves.
GreeksTheta
Theta measures how much option value decays with the passage of one day.
GreeksVega
Vega measures how much an option price changes when implied volatility changes by 1%.
GreeksRho
Rho measures how much an option price changes when interest rates change.
VolatilityImplied Volatility
Implied volatility is the market’s expected future movement, embedded in option prices.
PositioningOpen Interest
Open interest tells you how many option contracts are currently open and not yet closed.
PositioningPut-Call Ratio
Put-call ratio compares put activity or open interest against call activity or open interest.
StructureOption Chain
An option chain is the full table of calls and puts across strikes and expiries for one underlying.