Glossary
American-Style Optionβ
An option that can be exercised any time up to and including the expiration date.
Askβ
Price at which an option or stock is offered for sale
At-the-Money (ATM)β
Option's strike price equal to the underlying asset's market price.
Bidβ
Price at which an option or stock is available for purchase
Black-Scholes Modelβ
Model used to calculate European-style options prices
Break-Even Pointβ
Price at which an option position neither gains nor loses value
Butterfly Spreadβ
Options strategy with limited risk and profit potential
Calendar Spreadβ
Options strategy involving options with same strike price but different expiration dates
Call Optionβ
Contract giving the right to buy an asset at a specified price
Collarβ
Options strategy to limit risk and potential profit
Covered Callβ
Options strategy involving a long position and selling a call option
Deltaβ
Measure of an option's price sensitivity to the underlying asset's price
European-Style Optionβ
Option that can only be exercised on its expiration date
Extrinsic Valueβ
Portion of option's price attributed to factors other than intrinsic value
Gammaβ
Measure of the rate of change of an option's delta
Greeksβ
Measures of risk in options pricing
Implied Volatilityβ
Measure of expected volatility of the underlying asset
In Range (IR)β
When the underlying asset's market price is between the Panoption's lower and upper price range
In-the-Money (ITM)β
Option with strike price favorable relative to the underlying asset's market price
Intrinsic Valueβ
Value of an option if exercised immediately
Iron Condorβ
Options strategy involving selling out-of-the-money calls and puts
Long positionβ
a long position in a financial instrument means the holder of the position owns a positive amount of the instrument.
Marginβ
The amount of money or collateral that an investor must deposit with a broker to cover potential losses on an options position.
Naked Optionβ
Selling option without owning the underlying
Notional Value of an Optionβ
Theoretical value of the underlying asset represented by an option
Option chainβ
A list of options available for a specific underlying asset
Out of Range (OOR)β
When the underlying asset's market price is above tjhe Panoption's upper price range or below the Panoption's lower price range
Out of the Moneyβ
An option with no intrinsic value
Panoptionβ
A perpetual, oracle-less, decentralized, option based on Uniswap V3.
Perpetual Optionsβ
Options with no expiration date
Premiumβ
The price paid by the buyer of an option to the seller.
Price Oracles in Blockchainsβ
External data providers for blockchain-based smart contracts
Put Optionβ
A contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price (strike price)
Range (Uniswap V3)β
The range where users provide liquidity
Short Positionβ
Strategy betting on a decline in an asset's price
Streaming Premiaβ
The way Panption sellers collect fees
Thetaβ
Measure of an option's price sensitivity to time decay
Volatility Smileβ
Implied volatility pattern across options with different strike prices