Glossary
Trading terms, explained simply
From Iron Condor to Theta: the essential terminology around automated options trading, strategies and risk management. Searchable, alphabetical and sorted by category.
Popular starting points
Optionsgriechen
Sensitivity metrics for how the option price reacts to spot, time, volatility and rate. Pillar covering delta, gamma and theta.
Start hereImplizite Volatilität
Market-implied expectation of an underlying's future fluctuation range, derived from option prices and expressed in annualised percent. Pillar covering VIX, VSTOXX and IV Rank.
Start hereCredit Spread
Vertical spread of two options with the same expiration that opens for a net credit. Pillar covering bull put and bear call spreads.
Start hereIron Condor
Four-leg options strategy that profits from sideways markets with a capped maximum loss.
The three fields in the options-trading glossary
Most terms belong to one of three areas: the option Greeks, the volatility metrics and the spread strategies. A short overview of what each area means and where to start.
Option Greeks
The option Greeks are metrics that measure how strongly an option price reacts to spot, time decay, implied volatility and interest rates. Delta, gamma, theta, vega and rho together form the risk profile of any options position.
All GreeksVolatility metrics
Volatility metrics describe the expected swing range of an underlying. Implied volatility is derived from option prices, IV rank and IV crush place it in context, and VIX and VSTOXX aggregate it for entire indices.
Volatility hubSpread strategies
Spread strategies combine several options into a position with defined risk. A credit spread collects a net credit, bull put and bear call are its two variants, and the iron condor joins two of them into a neutral structure.
Strategy hub15 terms
B
I
Implizite Volatilität
Market-implied expectation of an underlying's future fluctuation range, derived from option prices and expressed in annualised percent. Pillar covering VIX, VSTOXX and IV Rank.
VolatilityIron Condor
Four-leg options strategy that profits from sideways markets with a capped maximum loss.
StrategiesIV Crush
Abrupt drop in implied volatility after a scheduled event such as earnings, shrinking an option's extrinsic value even when the underlying moves in the expected direction.
VolatilityIV-Rank
Standardisation metric that maps current implied volatility (IV) of an underlying to its 52-week range in percent. Premium-selling filter following the tastytrade convention.
Volatility
V
Vega
First-order option Greek measuring how strongly the option price reacts to a one-point change in implied volatility. Peaks at the money, rises with time to expiration.
GreeksVIX
CBOE Volatility Index, derived from 30-day SPX options. Measures expected market volatility in percent annualised. Used as a volatility regime filter and term-structure indicator.
VolatilityVSTOXX
EURO STOXX 50 Volatility Index (ticker V2TX, ISIN DE000A0C3QF1) provided by STOXX and EUREX. European counterpart to VIX, derived from Euro Stoxx 50 options.
Volatility