Options basics: delta, calls, volatility, ITM and OTM
·1494 words·8 mins
An option is a contract on an underlying asset. A call tracks upside above a strike, a put tracks downside below a strike, and terms like delta, implied volatility, in the money, and out of the money describe how sensitive the contract is and where it sits relative to the current price. Options terminology becomes unreadable fast if the vocabulary is not clear. This post covers the terms that show up again and again: calls, puts, strike, premium, delta, volatility, and moneyness.