Call Option
A call option is a contract that gives the buyer the right, not the obligation, to buy an underlying at a stated strike before expiry.
A call option is a derivative contract. The buyer pays a premium for the right to buy the underlying instrument at a fixed strike price on or before expiry (depending on the contract style). The seller (writer) receives the premium and takes on the corresponding obligation. Payoff depends on the underlying price at expiry relative to the strike, after accounting for the premium paid. This is an educational definition, not a recommendation to buy or sell any call.
Put Option
A put option gives the buyer the right, not the obligation, to sell an underlying at a stated strike before expiry.
A put option is the counterpart of a call. The buyer pays a premium for the right to sell at the strike. The writer receives the premium. Whether a put finishes in-the-money depends on the underlying price versus the strike at expiry. Education here is about contract mechanics — not a suggestion to take a put position.
Option Chain
An option chain lists available strikes for an expiry with call and put quotes, volume and open interest.
An option chain is a table of contracts for one underlying and expiry. Typical columns include strike, bid/ask, last traded price, volume and open interest for both calls and puts. Traders use the chain to see which strikes are liquid. The chain itself is market data, not a buy or sell signal.
Open Interest (OI)
Open interest is the number of outstanding option contracts that have not been closed or expired.
Open interest rises when new positions are opened and falls when positions are closed. Changes in OI alongside price are often studied to understand participation, but OI is not a guarantee of future direction. Use it as one input among many, with independent judgement.
Put-Call Ratio (PCR)
PCR compares put activity to call activity, usually using volume or open interest.
Put-Call Ratio is typically puts divided by calls (volume-based or OI-based). Some participants read extreme readings as sentiment context. PCR is a derived statistic, not a prediction, and it does not imply a winning probability.
VWAP
Volume Weighted Average Price is the average price weighted by traded volume over a session or window.
VWAP adds up price × volume and divides by total volume. Institutions often use it as a benchmark for execution quality. Crossing VWAP is not a profit guarantee; it is a reference price used in analysis.
Pivot Points
Pivot points are calculated support and resistance levels derived from a previous period’s high, low and close.
Classic floor-trader pivots use the previous session high, low and close to project a pivot and several support/resistance levels. They are widely watched reference levels. They are not a promise that price will reverse at those numbers.
Option Greeks
Greeks estimate how an option’s price may change with the underlying, time, volatility and rates.
Delta, gamma, theta, vega and rho are sensitivity measures from option pricing models. They help describe risk of an existing position. Model outputs depend on assumptions (especially implied volatility) and are not a forecast of profit.
Risk Management
Risk management is the process of defining loss limits, position size and exposure before entering a trade.
Derivatives can move quickly. Independent risk management includes knowing maximum loss, avoiding oversize positions, and not risking money you cannot afford to lose. No software tool removes market risk.
Stop Loss
A stop-loss is a pre-defined exit intended to limit loss if the market moves against a position.
A stop-loss order or a planned exit level is a discipline tool. Gaps, liquidity and slippage can cause fills away from the intended price. A stop-loss does not guarantee a limited loss in every market condition.
The software is a technology and market-analysis tool. It does not guarantee profits or returns. Trading in securities and derivatives involves market risk. Users should make their own independent trading decisions.