Ask (Quote Ask): The current lowest asking price for the position.

Ask X: The current lowest asking price for underlying accompanied by exchange code.


Bid (Quote Bid): The current highest bid price for the position.

Bid X: The current highest bid price for underlying accompanied by exchange code.


Beta: Beta measures how closely an individual stock tracks the movement of the broader market. Beta is often used to estimate the systematic risk of a security in comparison to the market as a whole. A beta of 1 indicates the movement of a security closely matches that of the broader market. A beta valued less than 1 theoretically indicates a security is less volatile than the broader market, and a beta valued above 1 theoretically indicates a security is more volatile than the broader market.
Beta-Weighted Delta : Beta-weighting is a technique used to convert deltas from different financial instruments (stocks, options, etc.) into standard units. One purpose of beta-weighting is to allow for a standardized approach to risk management of positions and portfolios.


Do you know the saying, "you can't compare apples and oranges?" Well, with different investment products, this idiom holds. You simply cannot compare the movement of one underlying with the movement of another, unless you have a tool designed to do just that!

Beta weighting allows you to assess all of your positions relative to a move in the market or specific symbol, regardless of direction. The term "beta weighting" allows us to easily remember that we are weighing one underlying against another in a comparative analysis.

As far as the tastyworks platform is concerned, the default beta-weighted symbol is SPY. To learn how to customize your beta-weighted delta, please click here.


Butterfly / Butterfly Spread: A long butterfly spread is a neutral position that is used when a trader believes that the price of an underlying is going to stay within a relatively tight range.

Directional Assumption: Neutral

Setup: This spread is typically created using a ratio of 1-2-1 (1 ITM option, 2 ATM options, 1 OTM option)

  • Buy Call/Put (above short strike) 
  • Sell 2 Calls/Puts 
  • Buy Call/Put (below short strike)
  • Ideal Implied Volatility Environment: High
  • Max Profit: The distance between the short strike and the long strike, less the debit paid.


How to Calculate Breakeven(s):

  • Upside: Higher Long Option Strike - Debit Paid
  • Downside: Lower Long Option Strike + Debit Paid
  • butterfly spread tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)


Buying Power: Buying power is a term used to describe the amount of capital you have to trade with. There are different rules, regulations, and leverage opportunities for different accounts, so this is a crucial term to understand. Please refer to Options Buying Power and Stock Buying Power.


Cash: Cash is the current cash balance in the account. Your cash value will be a negative number if you are borrowing money (or on margin). Cash is the sum of all the debits/credits in your account. To learn what can affect a cash balance, please click here.


Calendar Spread: A Long Calendar Spread is a directionally neutral strategy that profits from the passage of time or an increase in implied volatility.


Directional Assumption: Neutral


Setup: A calendar comprises of a short option (call or put) in a near-term expiration cycle and a long option (call or put) in a longer-term expiration cycle. Both options are of the same type and use the same strike price.

  • Sell near-term Put/Call 
  • Buy longer-term Put/Call

Max Profit: The maximum profit potential of a Calendar Spread can't be calculated due to both options being in different expiration cycles.

How to Calculate Breakeven(s): The break-even for a calendar spread cannot be calculated due to the different expiration cycles being used. A guideline we use is that is break-even is within 1 strike of the Calendar Spread's strike price.
tastytrade calendar spread content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)


Correlation (Corr.): This figure, located in the right-hand sidebar, measures the 3-month (about 66 days) correlation to the SPY.


Covered Call: A Covered Call is a common strategy that is used to enhance long stock positions. The position limits the profit potential of a long stock position by selling a call option against the shares.

Covered Setup: 

  • Buy 100 shares of stock 
  • Sell 1 call for every 100 shares. The short call is usually At-The-Money (ATM) or Out-Of-The-Money (OTM)
  • Max Profit: Distance between stock price & short call + premium received from selling the call
  • How to Calculate Breakeven(s): Stock price - credit from short call
  • covered call tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)


Close Price: The previous day's closing price of a stock or option.

Day High: The highest price an underlying has traded at.

Day Low: The lowest price an underlying has traded at.

Day Trades Counter: Day Trade Counter indicates the number of day trades in the past five business days. This counter will reset on a rolling five business day basis. To learn more about how day trades are counted, please click here.

Delta: Delta measures the theoretical change an option's price as a result of a +$1 change in the price of the underlying security or index. For example, a Delta of 0.40 indicates that the option's price will, theoretically, move $0.40 for every $1 move in the price of the underlying stock or index.

Call options:

  • Have a positive Delta that can range from 0.00 to 1.00
  • At-the-money (ATM) options usually have a Delta near .50
  • The Delta will increase (and approach 1.00) as the option gets deeper into the money.
  • The Delta of in-the-money call options will get closer to 1.00 as expiration approaches.
  • The Delta of out-of-the-money call options will get closer to zero as expiration approaches.


Put options:

  • Have a negative Delta that can range from 0.00 to -1.00
  • At-te-money (ATM) options usually have a Delta near -.50
  • The Delta will decrease (and approach -1.00) as the option gets deeper in the money
  • The Delta of in-the-money put options will get closer to -1.00 as expiration approaches
  • The Delta of out-of-the-money put options will get closer to 0.00 as expiration approaches
  • delta tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Description: Displays the full name of the selected underlying.

Dividend Yield: The annual dividend that a stock pays divided by the stock's current market price.

Earnings Date: The date when a company releases quarterly earnings (if published).


Equity Probability of Profit (ePOP): The Equity Probability of Profit (ePOP) is the theoretical probability of profit of your portfolio's equity/ETF positions (stock & options) making at least $0.01. ePOP does not apply to futures or futures options positions. To learn more about ePOP, please click here.


Exchange: Displays which exchange the symbol trades on. Some exchanges include ARCX, NASDAQ, and NYSE.

Extrinsic Value (EXT): Extrinsic value is the time & volatility value of an option. Regardless of whether your option is in the money or out of the money, there will always be extrinsic value in the option before expiration. Theta takes this value and spreads it out over the options expiration cycle. It is important to note that theta is not a linear value, meaning it grows exponentially as expiration nears. Extrinsic value is inherent in all option contracts and has different implications depending on whether you are buying or selling contracts.


When you buy an option, the extrinsic value has a negative effect on the option's value due to theta. Theta is a negative number and gets larger as expiration nears.


When you sell an option, extrinsic value has a positive effect on an option's value. Theta is a positive number and gets larger as expiration nears. If the trade moves against you and starts getting closer to your short strike, the EXT value will increase as well.


From a portfolio perspective, extrinsic value refers to the amount of money you stand to make in a specific expiration cycle if all short premium trades expire worthless.

Gamma (rate of price change): Gamma is the greek that gives us a better understanding of how delta will change when the underlying moves. It is the rate of change of an option's delta given a $1.00 move in the underlying. For example, if a long call option has a gamma of 0.10 and a delta of 0.50, and the underlying moves up $1.00, the option will then have a delta of 0.60, everything else being equal.


There are a few essential concepts when it comes to gamma: long option benefits, short option risks, and expiration risk.
gamma tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

P50: P50 is the probability of reaching 50% of max profit at any point before expiration. It is calculated by taking a trade, running it through a Monte-Carlo style simulation, and calculating the theoretical probability that your position will reach a 50% profit over 10,000 occurrences.

Implied Volatility (IVx): The implied volatility (IVx) metric displayed in the option chain is calculated using the VIX-style calculation described at the following link.

Implied Volatility Index (IV Index): The IV Index, or "IV Ind." located in the right-hand sidebar, is the 30-day implied volatility.


Implied Volatility Percentile (IV Percentile): IV percentile calculates the percentage of days in the past 52-weeks in which the IV was lower than the current level. To learn more about the difference between IV Rank and IV Percentile, then please click here (Please note: You are leaving tastyworks.com and heading to tastytrade.com).


Implied Volatility Rank (IV Rank): IV rank simply tells us whether implied volatility is high or low in a specific underlying based on the past year of IV data. For example, if XYZ has had an IV between 30 and 60 over the past year and IV is currently at 45, XYZ would have an IV rank of 50%. Since all underlyings have unique IV ranges, stating an arbitrary IV number does not help us decide how we should proceed with a strategy.
100 x (the current IV level - the 52 week IV low) / (the 52 week IV high - 52 week IV low) = IV Rank


In-the-money (ITM): Refers to when an option's strike price is breached and begins to trade with intrinsic value or an immediate value. Being in the money differs amongst calls and puts. For a call option, a call is ITM when the underlying price is higher than the option's strike price. For a put option, a put is ITM when the underlying price is less than the option's strike price. 


Iron Condor: An Iron Condor is a directionally neutral, defined-risk strategy that profits from a stock trading in a range through the expiration of the options for which it serves as the underlying. It benefits from the passage of time and decreases in implied volatility.

Directional Assumption: Neutral

Iron Condor Setup:

  • Sell OTM Call Vertical Spread 
  • Sell OTM Put Vertical Spread
  • Max Profit: The maximum profit potential for an Iron Condor is the net credit received. Maximum profit is realized when the underlying settles between the short strikes of the trade at expiration.

How to Calculate Breakeven(s):

  • Upside: Short Call Strike + Credit Received 
  • Downside: Short Put Strike - Credit Received
  • iron condor tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Jade Lizard: A Jade Lizard is a neutral to bullish strategy that combines a short put and a short call spread. The strategy is designed to have no upside risk, which is possible because you collect a total credit greater than the width of the short call spread.

Directional Assumption: Neutral / Bullish

Setup:

  • Sell OTM Put 
  • Sell OTM Vertical Call Spread
  • Max Profit: Credit received from opening trade. Max profit is realized when the stock price is between the short strikes at expiration.

How to Calculate Breakeven(s):

  • Downside: Strike Price of short put - credit received
  • When set up correctly, there is no risk to the upside.
  • jade lizard tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Last: The last price traded at.

Last X: The last price traded at accompanied by exchange code.

Liquidity rating indicator : The liquidity indicator was developed by the tastytrade research team. It uses a proprietary algorithm that takes into account the Bid/Ask Spread, the volume and open interest of the options, and the volume of the underlying stock.

Mark: The value that the platform displays as the price of a stock or option. It is typically the mid-price of a stock or option. It is also the metric the platform uses as a baseline for profit/loss calculations.

Mid-Price (Mid and Quote Mid): As the name implies, it is the midpoint price between the bid and ask price. It is a theoretical price and not a guaranteed price, but is used for price discovery. Our platform marks positions to the mid.

Natural Price (Nat): The "current market price," which sells on the bid and buys on the ask with some reliability. The tighter the bid-ask spread, the closer the natural price would be to the mid-price.

*Please note: In some cases, if you have a multi-leg option order and enter the order at the natural price, you may or may not be filled due to the way orders are filled. To be filled, not only must someone be interested in each leg of your order, but the whole order (every leg) must execute at A SINGLE exchange. To learn more about this, please click here.

Net Change: The nominal price change from the previous day's closing price.

Net Change %: The percentage change from the previous day's closing price.

Net Liq: Net Liq is short for "Net Liquidation Value." Net Liq for your account is the current value of the account. To learn more about Net Liq, please click here.

Open: The price at which an underlying opened at the start of the trading day.

Option Buying Power (Option BP): Options buying power displays your non-marginable buying power in your account. Equity/ETF options, outright futures, and options on futures are non-marginable, so your options buying power indicates how much capital you have available to trade the products mentioned.


Out-of-the-money (OTM): Refers to an options position that is not breached and trades solely with extrinsic value or time value. Being OTM differs amongst calls and puts. For a call option, a call is OTM when the underlying trades less than the option's strike price. For a put option, a put option is OTM when the underlying price is greater than the option's strike price.


Percent Bar (located beneath P/L Open and P/L day w/ Percent Bar) : The bar beneath your P/L Day or P/L Open number is your percentage bar. It is a quick visual reference for the percentage profit or loss of a position.

 or 


When a position is yielding a return >100%, then an arrow will appear next to the percentage bar.


P/L Day: The total profit or loss on a trading day. P/L Day uses the previous days closing mark/price of a stock, option, or future as its reference price. P/L Day in the account summary displays the total profit/loss for the day to provide a portfolio's relative performance from the previous trading day.


P/L Day w/ Percentage Bar: Please refer to the entry for Percent Bar.

P/L Day Gain Per Qty: The total profit or loss on a given day, on a per quantity basis, with the calculation based on the closing mark/price of a stock, option, or future as its reference price.


P/L Open: The total profit or loss from the time that an option or stock position was opened or established. To read about the colored bar beneath P/L Open, refer to the entry for Percent Bar.

P/L YTD: Cumulative profit or loss on the entire portfolio for the current year. For positions held from a previous calendar year to the current calendar year, P/L YTD uses the closing mark/price of your positions on the last trading day of the year as its reference price. P/L YTD also displays your performance on a per-symbol basis. To learn more, please click here.


Probability of Profit (POP): POP stands for the probability of profit. POP is the probability of making at least $0.01 on the trade at expiration. Trades performed at a credit, it's the probability of the break-even price expiring out-of-the-money. For trades performed at a debit, it's the probability of the break-even price expiring in-the-money. 


Below are some rough calculations used to determine approximate POP for the strategies provided:


Calculating POP when selling a Naked Put:

  • Subtract premium received from the sale's strike price
  • Find the probability of that value being ITM
  • Subtract from 100

Calculating POP for a Covered Call:

  • Subtract the premium received from the stock price
  • Find the probability of that value being ITM

Calculating POP for a Vertical Spread:

  • Divide the premium received by the width of the spread
  • Multiply by 100
  • Subtract this value from 100

Calculating POP when selling a Strangle:

  • Subtract total premium received from the put strike and add the total premium received to the call strikes 
  • to find break-even strikes
  • Find the ITM probability for break-evens
  • Add the probabilities together and subtract from 100

Calculating POP for an Iron Condor:

  • Divide the premium received by the width of the strikes
  • Multiply by 100
  • Subtract this value from 100

tastytrade Probability of Profit content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Stock Buying Power (Stock BP): Stock buying power displays the amount of stock buying power for the account. The amount listed in Stock BP for a margin account assumes that the stock you wish to purchase does not have an elevated margin requirement. Margin accounts over $2,000 will see their stock buying power 2X their options buying power. The stock buying power amount for IRA account, cash accounts, and margin account below $2,000 will display the same buying power amount as options buying power.


Straddle: A short straddle is a neutral, undefined-risk option strategy that profits from the passage of time and decreases in implied volatility.

Directional Assumption: Neutral

Straddle Setup: 

  • Sell ATM Call 
  • Sell ATM Put
  • Max Profit: Credit received from opening trade

How to Calculate Breakeven(s): 

  • Downside: Subtract initial credit from the Put strike price 
  • Upside: Add initial credit to the Call strike price
  • straddle tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Strangle: A short strangle is a neutral, undefined-risk option strategy that profits when the stock price stays between the short strikes as time passes and when there are decreases in implied volatility.

Directional Assumption: Neutral

Strangle Setup: 

  • Sell OTM Call 
  • Sell OTM Put
  • Max Profit: Credit received from opening trade

How to Calculate Breakeven(s): 

  • Downside: Subtract total credit from the short put 
  • Upside: Add total credit to short call
    strangle tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Theta (time decay): Theta measures the change in the price of an option per one-day decrease in its time to expiration. Since options are wasting assets and lose value as expiration approaches, theta is a theoretical estimate of how much value the option will lose each day (all else being equal). 


theta tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)


Trade Price: The price at which a position was opened or established. The trade price of an underlying with options positions will be added when grouped together. The individual trade price of each option will be displayed when expanded.

tastytrade Return on Capital (TROC): TROC is currently calculated in two forms: Annualized and on a per-trade/per-position basis. The latter form is calculated by taking the theta value of a position and dividing it by the buying power reduction, or cost, of the trade. The annualized calculation is associated with the portfolio and takes the entire theta value divided by the net liquidating value (net liq) of the portfolio. That number is then multiplied by 365.

Underlying Indicators: Upcoming events relating to an underlying, such as an upcoming earnings date or dividend. The platform denotes an earnings date with a purple 'E' icon with an earnings day countdown. Dividends are denoted with a blue 'D' icon. Ex-dividend dates can be found in the Overview tab located in the right sidebar menu.


Vega (volatility): Vega measures the rate of change in an option's price per 1% change in the implied volatility of the underlying stock. While Vega is not a real Greek letter, it is intended to tell you how much an option's price should move when the volatility of the underlying security or index increases or decreases.
vega tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Vertical / Vertical Spread

Long Call Vertical Spread:
A long call vertical spread is a bullish, defined-risk strategy made up of a long and a short call at different strikes with the same expiration.

  • Directional Assumption: Bullish
  • Max Profit: Distance Between Call Strikes - Net Debit Paid
  • How to Calculate Breakeven(s): Long Call Strike + Net Debit Paid

Long Put Vertical Spread:
A long put vertical spread is a bearish, defined-risk strategy made up of a long and short put at different strikes in the same expiration.

  • Directional Assumption: Bearish
  • Max Profit: Distance Between Put Strikes - Net Debit Paid
  • How to Calculate Breakeven(s): Long Put Strike - Debit Paid

Short Call Vertical Spread:
A short call vertical spread is a bearish, defined-risk strategy made up of a long and a short call at different strikes with the same expiration.

  • Directional Assumption: Bearish
  • Max Profit: Credit received from opening trade
  • How to Calculate Breakeven(s): Short call strike + credit received

Short Put Vertical Spread:
A short put vertical spread is a bullish, defined-risk strategy made up of a long and a short put at different strikes with the same expiration.

  • Directional Assumption: Bullish
  • Max Profit: Credit received from opening trade
  • How to Calculate Breakeven(s): Short Put Strike - Credit Received

vertical tastytrade content (Please note: You are leaving tastyworks.com and heading to tastytrade.com)

Volume (Vol): The cumulative trading volume for the day.