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A measure of the sensitivity of an option's price to a 1% change in interest rates.

The date on which the option expires and is no longer valid. The option must be exercised on or before this date, or it will expire worthless.

Writing an option without owning the underlying asset, exposing the writer to substantial risk.

An options strategy where the investor holds a position in both a call and a put with different strike prices but with the same expiration date.

Pertains to an option that has no intrinsic value - a call option with a strike price above the current stock price or a put option with a strike price below the stock price.

An option that can only be exercised at the expiration date, not before.

Describes an option with an intrinsic value - a call option with a strike price below the current stock price or a put option with a strike price above the current stock price.

A style of option that can be exercised at any time before it expires.

Quantitative measures that describe the risks associated with options, including Delta, Gamma, Theta, Vega, and Rho.

An options strategy involving the simultaneous purchase of a put and call option with the same strike price and expiration date, aiming to profit from a large move in the underlying asset's price.

An options strategy using multiple option contracts with different strike prices, but with the same expiration date. Typically involves buying an ITM and an OTM option, while selling two ATM options.

The process of closing the initial option position and entering a new position with a different strike price or expiration date.

A financial contract that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

A measure of an option's price sensitivity to a $1 change in the price of the underlying asset. For call options, delta ranges from 0 to 1; for put options, it ranges from 0 to -1.$

A put option is a contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying security at a set price within a specified time.

The price at which the buyer of the option is entitled to buy or sell the underlying security or commodity when the option is exercised.

The amount of money paid by the buyer to the seller to acquire the rights that the option confers.

Refers to an option where the strike price is equal to the current price of the underlying security.

A measure of how much the market expects the price of a security to fluctuate, reflected in the option's premium.

The rate of change of an option's delta in response to a $1 change in the price of the underlying asset. It indicates the convexity of the option's value in relation to the underlying.$

An investment strategy where an investor buys put options for an asset that they own to hedge against a decline in the asset's price.

An options strategy where an investor holds a long position in an asset and sells call options on the same asset to generate income.

A measure of the sensitivity of the option's price to the passage of time, also known as the time decay of the option.

A measure of an option's price sensitivity to changes in the volatility of the underlying asset. Vega indicates how much an option's price will change with a 1% change in implied volatility.