Introduction to options contracts, rights vs obligations, and how derivatives function.
This scope is designed to help you build a practical understanding of Options. Lessons move from core definitions to real-world context and common failure points.
Reading in order is recommended, but each lesson stands on its own.
An options contract is a standardized agreement that grants a right, but not an obligation, to buy or sell an underlying asset at a specified price on or before a specified date. This article explains the contract’s core components, its place in market structure, why it exists, and how it functions in practice.
An introduction to call and put options, explaining what they are, how they work, why they exist, and where they fit within modern financial markets. Includes practical examples, pricing concepts, and the institutional context of options trading without discussing strategies or recommendations.
A clear explanation of how rights and obligations define the relationship between option buyers and option writers, why this structure exists, and how it functions within modern listed options markets, with practical examples and institutional context.
A clear, foundational explanation of option strike prices, why they are standardized, how they shape payoffs and valuation, and how strikes are listed and adjusted in real markets, with practical examples and context across asset classes and contract types.
A clear, academically grounded explanation of option expiration dates: what they are, why they exist, how they fit into market structure, and how they are handled in practice across equities and indexes, including settlement conventions and operational timelines.
A clear, rigorous explanation of intrinsic and extrinsic value in options, why the distinction exists, how markets determine it, and how it connects to time, volatility, rates, dividends, and moneyness, with practical examples and real-world context.
A rigorous introduction to option premiums: what they are, why they exist, how they are formed in modern markets, and the key forces that influence their level, with practical examples and clear terminology for beginners to intermediate readers in options fundamentals.
A clear, academically grounded explanation of how options are priced, covering intrinsic and time value, no-arbitrage foundations, risk-neutral valuation, volatility and implied volatility, interest rates and dividends, American vs European features, the Greeks, the volatility surface, and real-world market structure.
A clear explanation of in-the-money and out-of-the-money options, how moneyness relates to intrinsic and time value, and where it fits within market structure and real-world contracts across equities, futures, and currencies. Includes practical examples without strategies or recommendations.
A clear, practical explanation of option assignment and exercise, how they function within market structure, why they exist, and what they mean for buyers and sellers across equity and index options. Includes operational mechanics, settlement, examples, and common pitfalls.
