THE OPTION CHAIN EXPLAINED
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Options Chain Explained:

Strike Price: Price at which the underlying security can be bought or sold

  • When selling a put option - you agree to purchase shares at a specific strike price

  • When buying a put option - you have the right to sell shares at a specific strike price

  • When selling a call option - you agree to sell shares at a specific strike price

  • When buying a call option - you have the right to buy shares at a specific price 

Liquidity: The amount of buyers and sellers in the options market

  • This is very important in order to readily buy and sell contracts with efficient pricing 

  • Tight bid/ask spread pricing enables efficient pricing in options 

Delta: Proxy for probability of success at expiration (options delta)

  • This is an absolute number (1.0 less delta) thus is delta is -0.20 then 1.0 - (-0.20) = 0.80

  • 0.80 = 80% chance the option expires worthless at expiration

  • Alternatively, a 20% chance the option falls in-the-money at expiration

In-The-Money: Strike prices at which options can be exercised

  • If a put is in-the-money then the option buyer can assign shares to the option seller

  • If a call is in-the-money then the option buyer can buy shares from the option seller

Out-Of-The-Money: Strike prices at which options cannot be exercised 

  • The option buyer cannot assign shares nor can they buy shares from the option seller 

Keyboard and Mouse

Actionable daily trade notification service for all opening and closing trades with commentary 

Bar Chart

All-inclusive offering

perfect for those seeking to remove the guesswork in options trading

Wave

70 large cap tickers and ETFs sortable by key technicals and dates to aide trade selection  

Noah Kiedrowski 
Founder and Managing Member

Stock Options Dad LLC

A Registered Investment Adviser (RIA) firm

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