Glossary
Glossary
The Glossary is a growing set of short entries (350-550 words each) for terms used across the site. Each entry defines the term plainly, shows the arithmetic where it helps, and links into the longer articles where the idea matters.
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What Is an Option Premium?
The option premium is the price a buyer pays and a writer receives for an options contract. How it is quoted, why you multiply by 100, and what it is made of.
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What Does At the Money Mean?
An option is at the money when the underlying trades at or very near the strike price. Why at-the-money options carry the most time value and how their delta behaves.
Read the explainer →What Is Assignment in Options?
Assignment is the notice that an option writer must fulfil the contract: sell shares for a call, buy shares for a put. How it is allocated, when it happens, and why it surprises people.
Read the explainer →What Is a Contract Multiplier?
The contract multiplier converts an option's quoted price into dollars: 100 shares for standard equity options, $100 per point for SPX and Canada's SXO index options.
Read the explainer →What Are LEAPS Options?
LEAPS are long-dated listed options, with expirations that can run up to about three years. How they differ from short-term options, what they cost, and their risks.
Read the explainer →What Is Implied Volatility?
Implied volatility is the future volatility the market is pricing into an option. How to read an IV number, how it differs from historical volatility, and why it drops after earnings.
Read the explainer →What Is Intrinsic Value in Options?
Intrinsic value is the amount by which an option is in the money: what it would be worth if exercised right now. Formulas for calls and puts, with worked examples.
Read the explainer →What Is Open Interest?
Open interest is the number of options contracts still open at the end of a trading day. How it differs from volume, how it changes, and what it can and cannot tell you.
Read the explainer →What Is a Strike Price?
The strike price is the fixed price at which an option lets you buy or sell the underlying. How strikes are listed, how they set moneyness, and how they shape breakeven.
Read the explainer →What Is Time Value in Options?
Time value, or extrinsic value, is the part of an option's premium above its intrinsic value. Why it exists, why it shrinks toward zero at expiry, and what drives it.
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