What is volatility?Volatility
How wildly the underlying's price swings; the bigger the swings, the more expensive options get.
Learn “volatility” in an animated lesson
- Crypto BasicsHigh Volatility and Position Sizing
Daily moves of 10% are common in crypto. See how high volatility magnifies drawdowns, and why position size matters.
- Hedging StrategiesDelta Hedging and Dynamic Rebalancing
After selling an option, use the stock to offset its price risk. But Delta changes with the stock price, so the hedge has to keep adjusting.
- Advanced Option StrategiesDelta and Gamma: An Option's Speed and Acceleration
For every $1 the stock moves, how much does the option move? That "speed" is Delta. The speed itself changes too, and how fast it changes is Gamma.
- Options BasicsIntrinsic Value and Time Value
An option's price splits into two parts: what it's worth right now, and what it's worth because there's still time left.
- Options: Next StepsLEAPS Call vs. Short-Dated Call
For the same rise in the stock, why do a 30-day option and a 730-day LEAPS behave so differently?
- Options: Next StepsTime Decay (Theta)
Time value is like a melting ice cube: it shrinks every day, and melts faster the closer expiration gets.
- Quant BasicsRisk Parity: Allocating by Risk
60% stocks / 40% bonds looks balanced, but stocks are far more volatile, so over 90% of the portfolio's risk actually comes from stocks. Risk parity makes each asset class contribute the same amount of risk.
Related terms
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