# Glossary

### American-Style Option

An option that can be exercised any time up to and including the expiration date.

### Ask

Price at which an option or stock is offered for sale

### At-the-Money (ATM)

Option's strike price equal to the underlying asset's market price.

### Bid

Price at which an option or stock is available for purchase

### Black-Scholes Model

Model used to calculate European-style options prices

### Break-Even Point

Price at which an option position neither gains nor loses value

### Butterfly Spread

Options strategy with limited risk and profit potential

### Calendar Spread

Options strategy involving options with same strike price but different expiration dates

### Call Option

Contract giving the right to buy an asset at a specified price

### Collar

Options strategy to limit risk and potential profit

### Covered Call

Options strategy involving a long position and selling a call option

### Delta

Measure of an option's price sensitivity to the underlying asset's price

### European-Style Option

Option that can only be exercised on its expiration date

### Extrinsic Value

Portion of option's price attributed to factors other than intrinsic value

### Gamma

Measure of the rate of change of an option's delta

### Greeks

Measures of risk in options pricing

### Implied Volatility

Measure of expected volatility of the underlying asset

### In-the-Money (ITM)

Option with strike price favorable relative to the underlying asset's market price

### Intrinsic Value

Value of an option if exercised immediately

### Iron Condor

Options strategy involving selling out-of-the-money calls and puts

### Long position

a long position in a financial instrument means the holder of the position owns a positive amount of the instrument.

### Margin

The amount of money or collateral that an investor must deposit with a broker to cover potential losses on an options position.

### Naked Option

Selling option without owning the underlying

### Notional Value of an Option

Theoretical value of the underlying asset represented by an option

### Option chain

A list of options available for a specific underlying asset

### Option Premium

The price paid by the buyer of an option to the seller.

### Out of the Money

An option with no intrinsic value

### Panoption

A perpetual, oracle-less, decentralized, option based on Uniswap V3.

### Perpetual Options

Options with no expiration date

### Price Oracles in Blockchains

External data providers for blockchain-based smart contracts

### Put Option

A contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price (strike price)

### Range (Uniswap V3)

The range where users provide liquidity

### Short Position

Strategy betting on a decline in an asset's price

### Streaming Premia

The way Panption sellers collect fees

### Theta

Measure of an option's price sensitivity to time decay

### Volatility Smile

Implied volatility pattern across options with different strike prices