Option selling
Selling a call or put option and receiving premium while accepting obligation.
Glossary
Option Selling Glossary
Use this page as a quick reference while reading the strategy and margin guides.
Premium
The price received by the option seller or paid by the option buyer.
Margin
Capital blocked by the broker or exchange to support the risk of a position.
Hedge
A protective position used to reduce or define risk.
Credit spread
A defined-risk option selling structure with one sold option and one protective bought option.
Iron condor
A non-directional defined-risk strategy using call and put spreads.
Short strangle
Selling an out-of-the-money call and put, often used for range-bound expectations.
Delta
An option Greek that estimates sensitivity to underlying price movement.
Theta
An option Greek that represents time decay.
VIX
A volatility index often used as a broad fear or volatility gauge.
Expiry
The date on which an options contract expires.
Mark-to-market
Live profit or loss based on current market prices.