Margin

Borrowed buying power from your broker; required for uncovered options, where losses can exceed the premium.

Margin is the collateral your broker requires you to keep when a trade could cost you more than you paid up front. Buying a call or put has no margin because your loss is capped at the premium, but selling options is different. When you write a naked call or a cash-secured put, the broker locks up a slice of your account to cover the potential loss, and that amount moves as the underlying and volatility change.

A simple example: you sell a put with a $50 strike. Your broker might hold a few hundred dollars as margin, not the full $5,000 you would owe if assigned. That leverage is exactly why margin selling feels attractive, and exactly why it bites people.

The common mistake is treating buying power as free money and selling more contracts than you could ever afford to be assigned on. If the stock gaps against you, the broker issues a margin call and can close positions at the worst possible moment. Size your trades against the real obligation, not the small margin figure.

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All options terms

Call Put Strike price Premium Expiration In the money (ITM)At the money (ATM)Out of the money (OTM)Intrinsic value Time value (extrinsic)Delta Gamma Theta Vega Implied volatility (IV)Open interest Assignment Exercise Spread Break-even Probability of profit (POP)Assignment risk / early assignment LEAPS Naked (uncovered) option Rho Historical volatility (HV)Volume Bid-ask spread Moneyness Covered call Cash-secured put Vertical spread Iron condor Straddle Strangle Rolling Max pain American-style option European-style option Contract multiplier Debit vs credit Volatility skew The Greeks Underlying Hedge Leverage Expected move Notional value Protective put Collar Butterfly spread Iron butterfly Calendar spread Diagonal spread Credit spread Debit spread Bull call spread Bear put spread Ratio spread Synthetic position The wheel strategy Poor man’s covered call (PMCC)Box spread Put-call parity Pin risk IV crush IV rank / IV percentile Ex-dividend date Deep in the money Weeklys 0DTE (zero days to expiration)Order types (to open / to close)Buying power reduction Cash settlement Market maker Slippage Mid price Black-Scholes model

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.