The current market price and the lowest price a seller is willing to accept for a security. The tighter the bid-ask spread, the closer the natural price will be to the mid-price.

The resources a company owns or controls that have economic value and can generate future benefits, such as cash, inventory, property, and equipment.

Options that you've exercised or that have been assigned to you.

When an option seller is required to fulfill their obligation under the contract—delivering stock if short a call, or purchasing stock if short a put—after the option is exercised by the buyer.

The possibility that the seller of an option may be required to fulfill the terms of the contract on or up to expiration. This typically occurs if the option is in-the-money, especially near expiration.

An option is "at the money" when the underlying asset's current price is equal to or very close to the option's strike price. In this situation, the option has little to no intrinsic value, but it may still have the most extrinsic value due to the potential for future price movements.

Autotrade allocations at tastytrade allow users to automatically execute trades based on the recommendations from a subscribed trading newsletter. Users can set their tastytrade account to automatically trade these recommendations by setting up autotrade allocations. This can be configured per trade or per unit, allowing for flexibility in how trades are executed automatically according to user preferences and the specifics of the newsletter service provider.

A financial chart displaying the high, low, opening, and closing prices for a given time period using vertical bars.

When you assume that an underlying is going to decrease in price.

Beta measures how closely an individual stock tracks the movement of the broader market. Beta is often used to estimate the systematic risk of a security in comparison to the market as a whole. 

A beta of 1 indicates the movement of a security closely matches that of the broader market. A beta valued less than 1 theoretically indicates a security is less volatile than the broader market, and a beta valued above 1 theoretically indicates a security is more volatile than the broader market.

Bid: The current highest bid price for the position.

Ask: The current lowest asking price for the position.

The opposite or highest price that a buyer is willing to pay for a security. The tighter the bid-ask spread, the closer the natural price would be to the mid-price.

Bitcoin is a decentralized digital currency that operates independently of a central authority.

The Black-Scholes model is a mathematical framework used for pricing European-style options. Developed by Fischer Black, Myron Scholes, and Robert Merton in the early 1970s, this model calculates the theoretical price of options by considering factors such as the current price of the underlying asset, the option's strike price, the time to expiration, risk-free interest rates, and the asset's volatility. The Black-Scholes model assumes that markets are efficient, the underlying asset prices follow a lognormal distribution, and there are no transaction costs or taxes. It is widely used in financial markets for valuing options and understanding the dynamics of option pricing.

Loans made to companies or governments, which pay back with interest over time.

An order that combines a primary order (to buy or sell) with pre-set close-for-profit and stop-loss orders. It automates the process of taking potential profits and cutting potential losses.

The price point at which an options trade results in neither a profit nor a loss. It’s calculated by combining the strike price with the premium paid or collected, depending on the strategy.

A modified butterfly spread with uneven wings to reduce cost or risk on one side—offers a low-risk directional bias.

An intermediary who helps investors buy and sell securities in the market.

When you assume that an underlying is going to increase in price.

A neutral strategy that combines a debit spread and credit spread at equidistant strikes—profits if the underlying finishes near the middle strike at expiration. It is used when a trader believes that the price of an underlying is going to stay within a relatively tight range.

An investment strategy where investors buy securities and hold them long-term, regardless of market fluctuations, to capitalize on potential growth.

Buying a call will make you bullish an underlying, while buying a put will make you bearish. 

Likewise, selling a call makes you bearish, while selling a put makes you bullish.

Buying power is a term used to describe the amount of capital you have to trade with. There are different rules, regulations, and leverage opportunities for different accounts.

Buying power is a term used to describe the amount of capital you have to trade with. There are different rules, regulations, and leverage opportunities for different accounts, so this is a crucial term to understand.

A long calendar spread is where the long option contract is in a longer-term expiration cycle than the short option, using the same strike price for both long and short.

A call option is a financial contract that gives the holder the right, but not the obligation, to buy a specified quantity, typically 100 shares, of an underlying asset at a predetermined price (known as the strike price) within a specified time period. Investors typically purchase call options when they anticipate that the price of the underlying asset will rise.

An order that has been cancelled before it was filled.

A chart type showing an asset's opening, closing, high, and low prices for a specific period, with "candlesticks" that indicate price direction and strength. 

The process of distributing financial resources among different investments or projects to maximize returns.

The profit from selling an asset for a higher price than its original purchase price.

A method of settling a futures contract where no physical delivery of the underlying asset takes place. Instead, the difference between the contract price and the settlement price is credited or debited in cash.

Money you've transferred in or out of your account.

The change in price since the start of the trading day.

Price the stock closed at.

Modifications made to the closing price of a security to reflect corporate actions, like dividends, stock splits, or mergers.

A predetermined price level the system will automatically sell a security to lock in potential profits.

A conservative strategy combining long stock, a protective put, and a short call to cap both upside and downside—often used to lock in profits or limit risk.

The fees brokers charge in exchange for executing a trade.

Physical goods like oil, gold, or agricultural products traded on markets.

The standardized quantity of the underlying asset that a single futures contract represents. This defines how much of the asset you’re controlling when you trade one contract.

Funds received by a company event that has impacted shareholders, like dividends or mergers.

A strategy used by investors to lower the average price paid for an investment, often by collecting premium through options or adding to a position at a lower price, which can improve the chance of a profitable exit.

A covered call is a known income strategy on a round lot of stock, which is 100 shares and a short call. The short call obligates you to sell shares at the strike price when assigned. Selling a call above the stock price brings in an extrinsic value credit for the share owner, but the max profit is capped above the short call strike.

A credit trade is a type of transaction where the trader receives a net premium to enter the position. For example, in a credit spread, an investor might sell an option with a higher premium and buy another option with a lower premium, resulting in a net cash inflow. Credit trades are often used when the trader expects the market to remain stable or move in a direction that benefits the sold options.

Crypto buying power shows how much funds you have available to buy crypto.

A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.

The various national monies—such as the U.S. dollar or euro— that the trade was executed in.

A TIF that means the order will remain active until the end of the current trading day, or until the end of the next trading day if placed outside of market hours.

The practice of buying and selling securities within the same trading day.

A debit trade is a type of transaction in trading, particularly in options, where the trader pays a net premium to enter the position. For example, in a debit spread, an investor might buy an option with a higher premium and sell another option with a lower premium, resulting in a net cash outflow. Debit trades are typically used when the trader expects the market to move in a direction that will make the purchased options more valuable.

Delta measures the theoretical change of an option's price as a result of a +/-$1 change in the price of the underlying security or index. For example, a Delta of 0.40 indicates that the option's price will, theoretically, move $0.40 for every $1 move in the price of the underlying stock or index.

The trader's overall portfolio has a neutral sentiment.

The trader's overall portfolio has a bearish sentiment.

Funds you've added to an account.

A time and strike-based spread that involves buying and selling options with different expirations and strike prices—offering directional exposure with some protection.

DRIP stands for Dividend Reinvestment Plan. You can opt-in to have your cash distributions, such as dividends, to be reinvested into shares. Since a dividend payment may not be enough to purchase a whole share, they can result in fractional shares too. There are no commissions or fees to enable or disable DRIP.

The elevated risk that a trader holding a short call option on a dividend-paying stock may be assigned early, before the ex-dividend date, resulting in the obligation to deliver shares and pay out the dividend.

A portion of a company's profits distributed to shareholders, usually on a regular basis.

You may only adjust the Dollar Amount you wish to purchase or sell. In short, you are submitting a market order to buy or sell a specific dollar amount of crypto. The actual quantity filled will depend on the entered dollar amount to the current market price, which is the Ask price when buying or the Bid price when selling.

An investment strategy where a fixed amount is regularly invested in a particular asset, reducing the impact of volatility by buying more shares when prices are low and fewer when prices are high.

A company's report on their profits in the latest reporting period, usually quarterly.

Only see the trades a trader has made around earnings on the Follow Feed.

A measure of profitability that is calculated by dividing a company’s earnings by the number of shares.

A chart that represents price movement and trading volume in one view, using bar width to reflect the volume traded.

Ethereum is a distributed, open-source blockchain protocol that relies upon the proof-of-stake consensus mechanism.

Exchange affiliations at tastytrade pertain to the connections between a user's tastytrade account and external entities such as the Small Exchange. Users can link their Small Exchange Membership to their tastytrade account to potentially benefit from reduced exchange fees.

Funds that track a market index or sector and trade on an exchange like stocks.

The action taken by the holder of an option to use their contractual right to buy (in the case of a long call) or sell (in the case of a long put) the underlying asset at the strike price.

Expiration refers to the date at which an options contract expires. After expiration, the option ceases to exist, and any value it might have had is realized or lost by closing the option or through exercise or assignment. The expiration date is a key factor in an option's pricing, as it determines the time frame within which the holder can exercise their rights under the contract.

Extrinsic value, or EXT on the tastytrade platform, is the time and implied volatility value of an option's price. In other words, it encompasses all option value that is not intrinsic. The more time an option has to expiration, and the more volatile the market is, the more extrinsic value the option has. All else equal, extrinsic value decays to $0 by the expiration of all options contracts.

A TIF for Extended Hours trading. It can only be used on Limit Orders and means that an order is only active in the extended market.

Money charged by another organization to execute a trade.

A filled order is an order that has been executed to establish a position.

A graphical representation showing the prices of futures contracts for a specific asset over various expiration dates. It helps traders understand market expectations about future prices.

Gamma represents the rate of change of Delta in response to a $1 move in the underlying asset. Higher Gamma indicates a more volatile Delta, meaning the option's price sensitivity to the stock price can shift quickly, especially as expiration nears.

The total value of goods and services produced in a country, used to gauge economic health.

Buying an underlying with the assumption it'll increase in price.

Selling shares of an underlying without owning them, assuming they'll decrease in price.

A TIF that stands for Good-Til-Canceled and means the order will remain indefinitely active until it is filled or canceled.

A TIF that stands for Good-Til-Date and means the order will only remain active until a specifically chosen date.

Investment funds that use advanced strategies to maximize returns, often for wealthy investors.

Hedging is a risk management strategy used to offset potential losses in an investment by taking an opposite position in a related asset or financial instrument. The goal of hedging is to reduce the impact of adverse price movements on an investment portfolio. This is commonly done using derivatives such as options, futures, or swaps, allowing investors to protect against unfavorable market changes while maintaining their original investment positions.

A type of candlestick chart that smooths out price data by averaging, helping to highlight trends more clearly.

Highest traded price of a stock.

A graphical representation of data distribution, often used in technical analysis to show frequency or intensity over time. 

How much a stock's price is expected to move in the near-term.

The net profit a company earns after deducting all expenses, including taxes and interest, from its revenue, often referred to as the "bottom line."

An Individual Retirement Account (IRA) is an account specifically designed for retirement savings with potential tax benefits. 

With an IRA, you can contribute money regularly up to an annual contribution limit. Unlike traditional retirement plans provided by employers, an IRA gives you more control and flexibility over your investments. 

At tastytrade, we have traditional IRAs, where you contribute in pre-tax money, and Roth IRAs, where you contribute in post-tax money. We also provide the ability to trade options with an IRA.

The rate at which prices for goods and services rise, reducing purchasing power.

Money you've earned on a position by lending stock or cash.

An option is considered "in the money" when it has intrinsic value. For a call option, this means the current price of the underlying asset is above the option's strike price. For a put option, it means the current price of the underlying asset is below the strike price. The difference between the strike price and the current price of the asset represents the intrinsic value of the option. Being in the money indicates that exercising the option would result in a positive cash flow equal to this intrinsic value.

Organizations, like pension funds or mutual funds, investing large sums on behalf of others.

Intrinsic value refers to the inherent worth of an option, representing the difference between the current price of the underlying asset and the option's strike price. For a call option, it's the amount by which the asset's market price exceeds the strike price. For a put option, it's the amount by which the strike price exceeds the asset's market price.

An iron condor is a directionally neutral, defined-risk strategy that benefits from a stock trading between the short strikes of each credit spread. Iron condors benefit from the passage of time and implied volatility contraction, and max profit is realized if the options expire worthless and the stock stays between the short strikes of the strategy. Max loss is realized if the stock price goes beyond either spread at expiration.

The IV Index, or "IV Ind." located in the right-hand sidebar, is the 30-day implied volatility.

IV rank tells you whether implied volatility is high or low in a specific underlying based on the past year. The higher the IV rank, the more volatile the underlying has been.

Implied Volatility Index, or IVx, is a metric derived from options prices in a given expiration cycle. The higher the options prices are relative to time, the higher the IVx percentage will be.

A jade lizard is a neutral to bullish strategy that combines a short put, and a short call spread.

Companies with market caps between $10 billion and $200 billion, typically established and stable.

The last price traded at.

The use of borrowed capital or margin to control a larger position with a smaller amount of money. In futures, leverage allows traders to amplify gains or losses relative to their initial investment.

The financial obligations or debts a company owes to external parties, such as loans, accounts payable, and accrued expenses.

An order that instructs the broker to buy or sell a specific security at a specific price. That means the order will only be executed if the broker is able to fulfill the order according to the specified price (or better).

A price that a user specifies when placing an order to buy or sell. The order will only be executed if the broker can fulfill the order at or better than the specified price.

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