Options and Alerts Glossary

The words OpScout uses for options and alerts, in plain terms. For how each value is produced, see the Methodology.

Alert

OpScout's record that a Monitor's condition was met at a check. An Alert is informational: it says that the conditions you configured matched, not that anything should be bought or sold. Each Alert can be sent to you as a Notification.

Annualized return

A return over a short period scaled to a one-year basis. OpScout works it out at the bid: the interval return, multiplied by 365 and divided by the days to expiration. It is simple, not compounded, and assumes the result could be repeated, which is not guaranteed and often not possible. How it is calculated.

Ask

The lowest price at which someone is currently offering to sell. A Target Entry Monitor's buy-write uses the stock's ask, the price at which shares would be bought.

Assignment

When the holder of an option exercises it, the seller is assigned and must deliver on the contract: sell the shares at the strike for a call, or buy them at the strike for a put. U.S.-listed stock options can generally be exercised before expiration, so assignment can come early. OpScout's calculations do not account for early assignment.

Bid

The highest price someone is currently willing to pay. A sold option is valued at its bid, so OpScout calculates every option return and premium it reports from the bid.

Bid/ask spread

The gap between the bid and the ask. A wide spread can mean that a quoted price is hard to trade at. When several contracts have the same annualized return, OpScout's ordering puts the narrower spread first.

Buy-write

Buying shares and selling a call on them at the same time. A Target Entry Monitor treats the stock's ask less the call's bid as the effective entry price of a buy-write.

Called away

Shares are called away when a call written on them is exercised and they are sold at the strike. For a Covered Call, OpScout also shows the annualized return if the shares are called away: the bid plus the strike less the stock price, over the capital.

Cash-Secured Put

Selling a put while keeping enough cash to buy the shares at the strike if the put is assigned. OpScout's Cash-Secured Put Monitor screens puts on the stock you choose; it does not check or hold your cash. What is a Cash-Secured Put?.

Contract multiplier

How many shares one option contract covers, often 100. A contract's premium is its per-share price times the multiplier. Adjusted contracts, after a split or a merger, can have a different multiplier.

Covered Call

Selling a call on shares you own, so that the shares cover the obligation to sell them at the strike. OpScout's Covered Call Monitor screens calls on the stock you choose; it does not check what you own. What is a Covered Call?.

Days to expiration (DTE)

How many days are left until an option expires. In an options Monitor you can set a range of days to expiration, inclusive at both ends, instead of fixed dates.

Expiration date

The last day an option can be exercised. For its annualized return, OpScout counts the time to 4:00 p.m. Eastern Time on the expiration date, in fractions of a day.

Implied volatility (IV)

The volatility of the underlying stock that an option's price implies, as a model works it out. OpScout receives it from the data source as supplied, and an options Monitor can be limited to a range of it.

In the money (ITM)

A call is in the money when the stock is above its strike, a put when the stock is below its strike. An options Monitor can set a maximum in-the-money probability, from the data source's model; it is an estimate, not the actual likelihood of any outcome.

Market capitalization

The total value of a company's shares: the share price times the number of shares. OpScout uses the market cap as the data source reports it and does not calculate it. Price alerts vs market cap alerts.

Monitor

A condition you set in OpScout on one stock: a price or market cap level, a Covered Call, a Cash-Secured Put or a Target Entry. OpScout checks each Monitor on a schedule during the U.S. regular trading session until you turn it off.

Notification

An attempt to tell you about an Alert through a delivery channel you chose, such as a push notification or WhatsApp. Some channels have monthly limits. How WhatsApp alerts work.

Once and Repeat

How often a Monitor can alert you. Once is checked in every cycle until its condition is met. Repeat becomes due again after its interval has passed, so the interval sets how often it is checked and how often you can be notified while the condition holds.

Open interest

The number of option contracts of one series that are still open. Where the data source supplies it, OpScout's ordering puts higher open interest first among contracts that are otherwise level.

Option chain

Every option listed on one stock: each expiration date, and each strike for calls and for puts. An options screen can return only part of a chain; OpScout's screens return at most 1,000 contracts.

Out of the money (OTM)

A call is out of the money when its strike is above the stock price, a put when its strike is below it. The out-of-the-money percentage is how far, as a share of the stock price; OpScout uses the data source's figure. Strike, days to expiry and OTM.

Premium

The price of an option, paid by the buyer to the seller. OpScout states a sold option's premium at the bid, per contract: the bid times the contract multiplier.

Regular trading session

9:30 a.m. to 4:00 p.m. Eastern Time on days the U.S. stock exchanges are open, ending at 1:00 p.m. on early-close days. OpScout checks Monitors only during it. Market sessions.

Strike

The price at which an option lets its holder buy (a call) or sell (a put) the shares. In an options Monitor you set the strike as a distance out of the money or as a price you enter.

Target Entry

An OpScout Monitor that looks for a way to own a stock at or below a price you set while earning at least a return you set: selling a put, or a buy-write. It names a Best Entry and a Best Return contract by published ordering rules, which are not recommendations. Target Entry Monitors.

More in the Learn articles and the FAQ.