6. Options and the volatility desk

The chain and strategies

The options chain, and one position built from several contracts.

Start
  • 2 lessons
  • 10 min
About this section

The two working screens of an options trader: the chain, where every contract on a stock is quoted with its volatility and Greeks, and the scenario builder, where several contracts become one position with a payoff you can stress.

What you will be able to do

  • Read an options chain: expiries, strikes, calls and puts, bid, ask, IV, delta, open interest (OMON).
  • Build a multi-leg position and read its payoff, P&L grid and combined Greeks (OSA).

Five words to know

chain
the table of all options on one stock
strike
the fixed price in the option contract
open interest
contracts still open, counted after each session
leg
one option (or stock) line inside a multi-part position
spread (strategy)
a position combining several options, like buying one call and selling another
  1. 01The options chain (OMON)OMON is the menu of every option on one stock: one tab per expiry, one row per strike, calls left and puts right with quotes and Greeks, and a strip of volatility numbers on top.4 min
  2. 02Building a position (OSA)OSA turns several option legs into one position and shows its value at any stock price, date and volatility, with breakevens, maximum profit and loss, and the combined Greeks.5 min

Educational material about reading market data, not investment advice.