Call Option
A call option gives its buyer the right, but not the obligation, to buy a set quantity of the underlying asset at the strike price on or before expiration, in return for a premium.
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Delta
Delta is the option Greek that estimates how much an option's price changes for a one-unit move in the underlying price, holding other factors constant. Call deltas range from 0 to +1 and put deltas from −1 to 0.
Expiration (Expiry)
Expiration is the date and time at which an option or futures contract ends, after which the holder's rights and obligations lapse or are settled. A European-style option can be exercised only at expiration, while an American-style option can be exercised at any time up to that deadline.
Futures
A futures contract is a standardized, exchange-traded agreement to buy or sell a specified quantity of an asset at a set price on a future date, or to settle the difference in cash. Positions are marked to market daily and backed by margin.
Gamma
Gamma is the option Greek that measures how much an option's delta changes for a one-unit move in the underlying price. It is the rate of change of delta, and it describes how quickly an option's exposure to the underlying shifts.
Implied Volatility (IV)
Implied volatility (IV) is the annualized volatility of the underlying asset that, when entered into an option pricing model, reproduces the option's current market price. It reflects how the market is pricing future movement, not a measured past quantity.
Option
An option is a derivative contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a fixed strike price on or before an expiration date. The buyer pays a premium to the seller, who takes on the obligation.
Put Option
A put option gives its buyer the right, but not the obligation, to sell a set quantity of the underlying asset at the strike price on or before expiration, in return for a premium.
Strike Price
The strike price, also called the exercise price, is the fixed price at which an option holder can buy (for a call) or sell (for a put) the underlying asset. It is set in the contract and does not change when the market price moves.
Theta
Theta is the option Greek that estimates how much an option's price falls as one day passes, holding the underlying price, volatility and interest rates constant. It measures time decay, the gradual erosion of time value as expiry approaches.
Vega
Vega is the option Greek that estimates how much an option's price changes for a one percentage point (one volatility point) change in implied volatility, holding other inputs constant. Both calls and puts have positive vega when bought.