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.

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.

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 long butterfly spread is a neutral position that 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.

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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.

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.

The fees brokers charge in exchange for executing a trade.

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

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

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.

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.

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.

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.

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.

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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.

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Highest traded price of a stock.

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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.

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

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.

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The last price traded at.

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.

A chart that connects closing prices over time with a continuous line, showing the overall trend of an asset’s price.

Liquidity refers to the ease with which an asset or security can be bought or sold in the market without affecting its price. High liquidity indicates a large volume of trading activity, narrow bid-ask spreads, and the ability to quickly execute transactions with little to no impact to the current market price. Liquid markets are generally more efficient and less volatile, providing investors with greater flexibility in their trading strategies.

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A long put involves purchasing a put option, which gives the buyer the right, but not the obligation, to sell a specified quantity, typically 100 shares, of an underlying asset at a strike price before the option expires. Investors typically take a long put position when they anticipate that the price of the underlying asset will fall, allowing them to potentially profit from the price decrease. The maximum loss is equal to the premium paid by the options trader.

Lowest traded price of a stock.

The total value of a company’s shares, calculated by multiplying the stock price by the number of outstanding shares.

An order to buy or sell a stock at the market's current best available price. A market order virtually guarantees execution, but it doesn't guarantee a specific execution price. If you are placing a fractional trade, the order type must be a Market Order.

The maximum amount you can potentially lose on a trade

The maximum amount you can potentially make on a trade.

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Companies with market caps between $2 billion and $10 billion, often with growth potential.

The midpoint price between the bid and ask price. It's a theoretical price and not a guaranteed price. It's used for price discovery.

Any other transactions that fall outside of the common types.

3rd Friday of each month.

Pooled investments managed by professionals that buy a mix of stocks, bonds, or other assets.

When you receive more in premium than you pay in an options spread trade.

When you pay more in premium than you receive in an options spread trade.

Net Liq is short for “Net Liquidation Value.” Net Liq is calculated for your entire account from the mid-price of the positions. This number is dynamic and will move according to the market price.

"One Cancels Other" orders create a bracket on an existing position. OCOs let you set up and route a profit and stop-loss target simultaneously.

Price the stock opened at.

An Open API enables developers to create and share software applications, tools, and services, using a common language that simplifies communication between different platforms and systems. Our Open API lets you access data points and functionality related to your accounts and financial markets.

Only see the trades a trader has opened on the Follow Feed.

Options buying power displays your non-marginable buying power in your account.

Metrics related to how an options price will move when things happen in the market—Delta, Gamma, Theta, Vega to name a few. 

Tracks the P/L of your options positions from when you first open to when you close, including any adjustments you make, like a roll. Whenever you adjust an option, Order Chains will automatically group the trades, keeping track of the average trade price and P/L. This makes it easy to know your P/L when you've made a lot of changes to an option.

Miscellaneous orders that aren't working, filled, or canceled.

"One Triggers a One Cancels Other" orders are used when creating a bracket on a new position. OTOCO lets you open a trade and also set up a profit and stop-loss target.

The P50 feature is a Monte-Carlo style simulation of 10,000 occurrences of random price movement to show the probability of reaching 50% of max profit. The P50 feature differs from the probability of profit (POP) metric because POP shows the probability of making at least $0.01 of profit at expiration, rather than 50% profit at any point in the trade.

A regulatory designation given to traders who execute four or more day trades within five business days. It prevents you from opening new positions.

P/L Day shows the profit or loss in a day based on the prior day’s close. The calculation is based on the closing price, and it'll change based on the price action of the stock or option. Each day it will start from $0.00 and will move positive or negative.

P/L Day Change shows the percentage profit or loss in a day based on the prior day’s close. The calculation is based on the closing price, and it'll change according to the price action of the stock or option. Each day it will start at 0.0% and will move positive or negative.

The profit or loss from a trade. It's calculated by subtracting the proceeds from selling a position from the original cost, including any fees or commissions. P/L can be calculated for individual trades or for your overall portfolio.

A strategy of spreading investments across different assets, sectors, or regions to reduce risk.

The specific investments a trader has in an asset, including the quantity, the purchase price, and any options contracts.

Price limits let traders either lock-in potential profits or limit potential losses by setting triggers based on an underlying's price movement.

A ratio comparing a company’s stock price to its EPS, used to assess value.

The Probability of Profit (POP) is the theoretical probability of your equity/ETF options position(s) making at least $0.01 on a trade. POP derives from a set of variables such as position type, whether you are long or short, time, and volatility (for the distribution curve).

Estimates or forecasts of a company's future financial performance, including revenue, income, and other key metrics—often used by investors to assess its growth potential and investment attractiveness.

A put option is a financial contract that gives the holder the right, but not the obligation, to sell a specified quantity, typically 100 shares, of an underlying asset at a predetermined price (the strike price) within a specified time period. Investors typically purchase put options when they expect the price of the underlying asset to decline.

How many shares or option contracts of an underlying in a trade.

A ratio spread is a neutral strategy that involves an unequal number of long and short options. Usually, traders use a 2:1 ratio of puts or calls, depending on whether they are slightly more bullish or bearish.

Settlement of futures contracts you've opened.

A period of economic decline, marked by reduced GDP and higher unemployment.

An individual investor who buys and sells securities for personal accounts.

A measure of financial performance, showing how much profit a company generates with shareholder equity.

The total amount of money a company generates from its core operations, primarily through the sale of goods or services.

Risk monitoring at tastytrade involves procedures implemented by the risk team to manage potential expiration risks for client accounts. The risk team monitors these risks throughout the trading day and sends notifications to accounts identified with excessive risk. They may also close positions as necessary to mitigate the risk of significant losses due to expiring options or unforeseen market movements. If you have options expiring today and would like to notify our risk team that you will liquidate any positions that could potentially pose excessive expiration risk before the close of trading click the I’M MONITORING button on your my.tastytrade.com manage page.

Closing the current option and opening a new option on either a different strike, in a different expiration, or both.

A retirement account funded with after-tax dollars, allowing tax-free growth and tax-free withdrawals in retirement, provided certain conditions are met.

Sectors group together stocks that work in the same industry.

This refers to the various types of investment that are traded, usually stocks.

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A short put involves selling a put option, which obligates the seller to purchase the underlying asset at the strike price if the option is exercised by the buyer. Investors typically take a short put position when they expect the price of the underlying asset to remain stable or rise, allowing them to earn the premium received from selling the option. Max loss occurs when the stock goes to zero.

The number of contracts or shares that the bid and ask are willing to be bought or sold for, usually in multiples of 100 shares when trading stock.

Companies with market caps between $300 million and $2 billion, usually higher risk but growth-focused.

The difference between the bid and ask prices. The smaller the spread, the greater the liquidity.

The largest and oldest ETF in the USA and is designed to track the S&P 500 stock market index. Investors should obtain a copy of the investment company’s prospectus, which contains important information about the investment company, related risks, and expenses.

A fractional share of ownership in a company.

Stock buying power shows how much funds you have available to buy stock. Margin accounts over $2,000 will see their stock buying power 2x their options buying power. The stock buying power amount for IRA account, cash accounts, and margin account below $2,000 will display the same buying power amount as options buying power.

A marketplace where stocks and other securities are traded, like the NYSE or NASDAQ.

A marketplace such as an exchange where shares of public companies are bought and sold.

Benchmarks that track the performance of a group of stocks, such as the S&P 500 or Dow Jones.

A limit order to buy or sell once the stock has traded at or through a specified price. When the specified stop price is reached, the order automatically turns into a limit order.

A predetermined price level at which the system will automatically sell a security to limit potential losses.

A market order to buy or sell once the stock has traded at or through a specified price. When the specified stop price is reached, the order automatically turns into a market order.

A short straddle is a neutral, undefined-risk option strategy that involves selling both a call and a put at the same strike price and expiration. A straddle benefits from the stock price trading in a narrow range, the passage of time, and an implied volatility contraction.

A short strangle is a neutral, undefined-risk option strategy that involves selling both an out-of-the-money (OTM) call and an OTM put in the same expiration. A strangle benefits from the stock price trading between the short strikes, the passage of time, and an implied volatility contraction.

The strike price, also known as the exercise price, is the price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset. The strike price is a critical component in determining the intrinsic value of an option and influences whether the option is in-the-money, at-the-money, or out-of- the-money.

The price in an options contract at which an underlying can be bought or sold.

What analysts believe is the fair value of a stock, based on its past and projected earnings.

An online financial network that streams hours of live content for traders. You can watch it by clicking "tastylive" in the left-hand column.

Theta measures the change in the price of an option per one-day decrease in its time to expiration. Since options are wasting assets and lose value as expiration approaches, Theta is a theoretical estimate of how much value the option will lose each day (all else being equal).

The setting that determines how long an order will stay active before it expires or is canceled.

The number of trades you have placed today.

A retirement account where contributions are tax-deductible, and earnings grow tax-deferred until withdrawn in retirement, at which point they are taxed as income.

Positions or funds moved into or out of your account.

This is a contact you provide to us that we use in case of emergencies. If we think that we need to reach out to the account owner but if s/he can't be reached we reach out to the trusted contact you provided for us.

2 Factor Authentication is an added level of security for your account. When you log in, we send a code to your email or authenticator app that confirms it’s you.

A vertical spread is an options strategy that involves opening a long (buying) and a short (selling) position simultaneously, with the same underlying asset and expiration, but at different strike prices. In this directional strategy used in options trading, both the options must be of the same type—either put or call contracts.

A measure of how much an asset's price fluctuates, with higher volatility indicating greater risk and potential for price swings.

The cumulative trading volume for the day.

A group of symbols you can use to get a quick snapshot of the market's performance.

In a vertical spread, the difference between the two strike prices.

Money you've removed from your account.

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.

Speculation involves engaging in financial transactions with the aim of achieving substantial gains by taking on higher risk. Speculators typically make decisions based on predictions or expectations of future price movements in markets, such as stocks, commodities, or currencies. Unlike investors who may focus on long-term value, speculators are often more concerned with short-term price fluctuations and leverage market volatility to seek profits.

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.

An option is considered "out of the money" (OTM) when it has no intrinsic value—meaning its strike price is not favorable compared to the current price of the underlying asset. For a call option, this occurs IG Group Internal Use Only when the asset's current price is below the strike price, while for a put option, it happens when the asset's current price is above the strike price. Out-of-the-money options are not profitable to exercise based on the current market price, but they still carry extrinsic value, which reflects the time left until expiration and the potential for the asset's price to move favorably in the future.