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These are options contract with no intrinsic value. A Call option is OTM when the strike price is above the current market price. A Put option is out-of-the-money when their…

This is basically the amount of intrinsic value that an options contract has. In other words, it is the relationship between the strike price of the option and the price…

This is the idea that says that the price of the underlying asset will gravitate towards the point where the most options expire worthless. Some option traders will "trade around"…

This is when you enter into a position by purchasing one part of the spread at a time rather than buying it all at once. Legging can improve the risk-reward…

This is the combination of a Bull Put Spread and a Bear Call Spread. The trade is created by selling a Put and buying a lower strike price Put and…

This is basically a big change in Implied Volatility [IV]. IV gaps higher when the market expects the underlying Stock/ETF to make a big move in the short term. IV…

An Iron Butterfly is a trade that is created by putting on a Short Straddle (selling at the money puts and calls) and a Long Straddle (buying out of the…

The Intrinsic Value is basically the value of an in-the-money option minus its time value. Intrinsic value is the current real tangible value of the options contract. The intrinsic value…

These are Option contracts that have intrinsic value. A call option is ITM if the market price of the underlying asset is greater than the strike price of the option.…

This is basically the level of volatility reflected in the current options prices. Each options contract has a unique level of implied volatility that is computed using an options pricing…