Options 101 & the Greeks

How an option is priced and what each Greek actually does to your position.

143 articles in this section of the Journal, grouped by topic. Every one is free to read.

Options 101 79

American vs European OptionsAmerican options can be exercised any time before expiration; European options only at expiration. Here is what that means in practice - and why it matters more for sellers than buyers.
Are SPY Options Cash-Settled or Physically Settled? What It Means at ExpirationSPY options are physically settled — an in-the-money option turns into 100 shares — unlike SPX, which settles in cash.
Assigned by a Penny: The In-the-Money-at-Expiration TrapAn option that finishes even $0.01 in the money at expiration is typically auto-exercised
Assignment & Exercise, ExplainedExercise turns an option into shares; assignment is being on the other side of it. Here is how both work, when assignment risk is real, and why long option buyers rarely worry about it.
Assignment Fees, Exercise Fees, and Per-Contract CostsBeyond the premium, options carry per-contract commissions, regulatory fees, and assignment/exercise fees. For a high-frequency scalper these add up fast.
Automatic Exercise: What Happens If You Forget to Close an ITM OptionAt expiration, any option $0.01 or more in-the-money is automatically exercised by the clearinghouse — even if you meant to close it.
Bracket Orders and OCO: How an Exit Ladder Actually WorksAn OCO pairs a profit target and a stop so that filling one cancels the other. A bracket wraps both around your entry.
Buy to Open, Sell to Close, Sell to Open, Buy to Close: The Four Options ActionsOptions orders have four actions — buy to open, sell to close, sell to open, buy to close — that combine direction with whether you're opening or closing.
Calculating Break-Even on a Long Call or PutBreak-even on a long call is strike plus premium; on a long put it's strike minus premium.
Can Options Assignment Cause a Margin Call? Yes — Here's HowYes — being assigned on an option can trigger a margin call if you end up with a stock position you can't fully cover. Here's how assignment leads to margin calls, who's at risk, and how to avoid it.
Can You Get Assigned on a 0DTE SPY Option You're Long?No — assignment happens to the seller of an option, not the buyer. If you're long a 0DTE SPY call or put, you hold a right, not an obligation.
Choosing a Strike for a 0DTE Scalp: How Far Out-of-the-Money?The strike you pick decides how your 0DTE scalp behaves. At-the-money moves well but costs more; far out-of-the-money is cheap but needs a big move.
Day vs GTC Orders: Why Your 0DTE Order Dies at the CloseA Day order expires at the end of the session; a GTC order stays working across days until filled or cancelled.
Debit vs Credit in Options: Paying vs Collecting PremiumA debit trade pays out net premium (you buy); a credit trade collects net premium (you sell). This simple distinction determines your risk profile and how you profit. Here's the difference explained.
Deep In-the-Money Options: Why They Move Almost Like SharesA deep in-the-money option has a delta near 1.0 and almost no time value, so it moves nearly dollar-for-dollar with SPY
Delta and Gamma TogetherDelta is how much an option moves with the underlying; gamma is how fast that delta changes.
Do SPY Options Trade After Hours? What to KnowSPY options have limited extended-hours trading, and after-hours moves in SPY can still affect whether an expiring option finishes in or out of the money.
Early Assignment Explained: When Option Sellers Get Called EarlyEarly assignment is when the seller of an American-style option is assigned before expiration because the buyer exercised early
Early Assignment Risk: When a Short Option Gets Exercised Before ExpirationAmerican-style options can be exercised any time before expiration, so if you sell options or spreads you can be assigned early
Expired In-the-Money With No Cash: What Your Broker Actually DoesIf a long SPY option expires in-the-money and you can't afford the shares it exercises into, your broker steps in
Far-OTM 0DTE Options: The Lottery-Ticket Trap, With the MathCheap far-out-of-the-money 0DTE options feel like low-risk lottery tickets, but the math is brutal: a tiny delta, a move most sessions never make, and…
Getting Filled at the Mid on SPY OptionsThe mid is the price halfway between the bid and the ask. On liquid SPY strikes you can often get filled there or close to it with a limit order
Holiday and Shortened-Session Options Expiration ScheduleMarket holidays and half-days shift the options calendar — some days have no 0DTE, and half-days close early. Here's how holidays affect SPY options expirations and what to check before you trade.
How SPY's Dividend Affects Its Options (and Early Assignment)SPY pays a quarterly dividend, and that payout affects its option prices and creates early-assignment risk on short calls around the ex-dividend date.
How Wide Should a Vertical Spread Be on SPY 0DTE?A vertical spread's width sets its cost, its max payoff, and how much it behaves like a single option.
How the ATM Straddle Prices the Day's Expected MoveThe price of the at-the-money straddle — a call plus a put at the same strike — is the market's direct quote for how far SPY is expected to move.
How to Read a SPY Options Ticker: Strike, Expiry, and C/P DecodedAn options symbol packs the underlying, expiration date, call/put, and strike into one string.
IOC, FOK, and AON: The Options Order Types Nobody ExplainsIOC fills what it can right now and cancels the rest; FOK demands the whole order instantly or nothing; AON insists on full size but will wait.
IV Crush on SPY Around Scheduled Events: CPI, FOMC, and NFPImplied volatility ramps up before scheduled events like CPI, FOMC, and jobs reports, then collapses the moment the number drops
Liquidity by Strike: Why Round-Number SPY Strikes Fill BetterOptions liquidity isn't uniform — it clusters at round-number and near-the-money SPY strikes.
Mark vs Last vs Bid/Ask: Why Your Options P&L Looks WrongYour platform shows an option's mark, its last trade, and a bid/ask — and they can all differ.
Moneyness: ITM, ATM & OTMMoneyness describes where an option's strike sits versus the current price - in, at, or out of the money.
Options Approval Levels: What Each Tier (1-4) Actually Lets You TradeBrokers gate options trading behind approval levels, roughly 1 to 4, from covered calls up to naked options.
Premium Paid vs Notional Controlled: The Leverage Hiding in One ContractThe premium is what you pay; the notional is the ~$74,000 of SPY one contract controls.
Rolling a Losing 0DTE Call: When It Makes Sense and When It Doesn'tRolling means closing a losing option and reopening it further out in time or strike. On a 0DTE call it's usually just adding risk to a bad idea.
SPY Has Daily Expirations Now: What Every-Weekday 0DTE Actually MeansSPY lists options that expire every trading day, Monday through Friday. That means there's a fresh 0DTE contract to trade each session
Single Options vs Spreads for Scalping: Why Simpler Usually WinsA single long option is fast, simple, and clean to fill; a spread is cheaper and defined but slower, capped, and carries a short leg.
Stop-Limit vs Stop-Market on Options: Which Protects You in a Fast Tape?A stop-market guarantees you exit but not the price; a stop-limit guarantees the price but may not fill at all — a disaster on a fast 0DTE option.
The 100 Multiplier: What One SPY Options Contract Really ControlsOne SPY options contract controls 100 shares, so the quoted premium is multiplied by 100. A $1.30 option costs $130, and a $0.05 move is $5 per contract.
The Box Spread, Explained (and How Traders Blew Up With It)A box spread combines a bull call spread and a bear put spread into a fixed, interest-rate-like payoff — used mostly for financing.
The Broken-Wing Butterfly, ExplainedA broken-wing butterfly is a butterfly spread with unequal wings, which skews the risk and can often be opened for a credit.
The Options Greeks Cheat Sheet (All in One Place)A quick-reference cheat sheet of the options Greeks — delta, gamma, theta, vega, rho, and the key higher-order ones — with what each measures in one line. Here's the whole family at a glance.
The Options Greeks in Plain EnglishDelta, gamma, theta, and vega without the math. A plain-English guide to the options Greeks — what each one measures, what it costs you, and why they matter most on short-dated SPY options.
The Risk Reversal, ExplainedA risk reversal sells a put to finance buying a call (or vice versa), creating a leveraged directional position for little or no premium.
Theta Decay: Why Options Lose Value Every DayTheta decay is the clock working against every long option. Here's what theta is, why the decay curve accelerates near expiration, why 0DTE options are almost pure theta, and how traders manage it.
Using a Debit Spread to Cut Theta on a Directional 0DTE BetA debit call or put spread sells a further strike to finance the one you buy — cutting cost and theta decay in exchange for a capped payoff.
Weekend Assignment Risk: The Monday Surprise for SellersAn option seller assigned on a Friday expiration can be left holding a stock position over the weekend — exposed to Monday's gap with no way to react.
Weekend Theta: Why Holding Options Friday to Monday Quietly Costs YouOptions decay on calendar time, not trading time — so the market is closed all weekend but the clock keeps running.
Weekly Options, ExplainedWeekly options expire every Friday (and now more often on major names), offering cheap, fast-moving contracts. Here is how they work, why they're popular, and the decay risk that comes with them.
What Actually Determines an Option's Price: The Six InputsAn option's price comes from six inputs: the underlying price, the strike, time to expiration, implied volatility, interest rates, and dividends.
What Are LEAPS?LEAPS are options with expirations a year or more out. Here is how they differ from short-dated contracts, why they behave more like stock, and where the trade-offs lie.
What Drives Option Prices? The 5 Key FactorsAn option's price is driven by five main factors: the underlying price, the strike, time to expiration, implied volatility, and interest rates. Here's how each one moves the premium.
What Is Dividend Risk? Early Assignment Around DividendsDividend risk is the chance that an option seller gets assigned early right before a dividend, as call holders exercise to capture the payout. Here's how dividend risk works and who it affects.
What Is Early Exercise? Using an Option Before ExpirationEarly exercise is when the holder of an American-style option uses their right to buy or sell before expiration.
What Is Exercise by Exception? How Auto-Exercise WorksExercise by exception is the clearing process that automatically exercises options finishing in the money at expiration, unless you instruct otherwise.
What Is Intrinsic Value in Options?Intrinsic value is the portion of an option's price that comes from being in the money — the real, exercisable value. Here's what intrinsic value is and how it differs from time value.
What Is Liquidity in Options? Why It Matters for Every TradeLiquidity is how easily you can buy or sell an option without moving the price — measured by tight spreads, high volume, and deep open interest.
What Is Parity? When an Option Trades at Intrinsic ValueAn option trades 'at parity' when its price equals its intrinsic value — meaning it has no time value left, typical of deep in-the-money options near…
What Is Pin Risk? The Expiration Uncertainty at a StrikePin risk is the uncertainty a trader faces when the underlying closes right at an option's strike at expiration
What Is Put-Call Parity? The Relationship That Ties Options TogetherPut-call parity is the fundamental relationship linking the prices of a call, a put, the underlying, and a bond at the same strike
What Is Rho?Rho measures an option's sensitivity to interest-rate changes. Here is what it is, why it matters for long-dated options, and why intraday traders can safely ignore it.
What Is Slippage? Why Your Fill Differs From the QuoteSlippage is the difference between the price you expected and the price you actually got — caused by the spread, fast markets, and thin liquidity. Here's what slippage is and how to minimize it.
What Is T+1 Settlement? When Trades Actually SettleSettlement is when a trade officially completes and ownership/cash transfers. US stocks now settle T+1 (trade date plus one business day).
What Is Vega?Vega measures how much an option's price changes when implied volatility moves. Here is why it matters, why it's biggest for at-the-money and longer-dated options, and how it burns earnings buyers.
What Is a Hedge? Reducing Risk With an Offsetting PositionA hedge is a position taken to offset the risk of another — like buying puts to protect a stock portfolio.
What Is a Mini Option? Smaller-Size Contracts, ExplainedMini options control a smaller amount of the underlying than standard contracts — for example, XSP is one-tenth the size of SPX. Here's what mini options are and why smaller-size contracts exist.
What Is a Spread in Options? (Two Meanings)'Spread' means two things in options: the bid-ask spread (the gap between buy and sell prices) and a spread strategy (combining multiple options).
What Is a Synthetic Position? Replicating One Thing With OthersA synthetic position uses options (and sometimes stock) to replicate the payoff of a different instrument
What Is a Weekly Option? Short-Term Expirations ExplainedWeekly options are contracts that expire at the end of a given week rather than monthly
What Is an Index Option? Options on an Index, Not a StockAn index option is an option on a market index (like SPX) rather than a stock or ETF — typically cash-settled, European-style, and eligible for special…
What Is the Ex-Dividend Date? And Why Options Traders CareThe ex-dividend date is the cutoff for owning a stock to receive its next dividend — and the price typically drops by the dividend amount that day.
What Is the OCC, and What Does It Actually Guarantee?The Options Clearing Corporation sits between every option buyer and seller as the central counterparty, guaranteeing performance and handling exercise…
When Do SPY 0DTE Options Stop Trading? 4:00 vs 4:15 PMSPY stock stops at 4:00 PM ET, but broad-based ETF options like SPY have historically traded a few minutes later.
Why 0DTE Bid-Ask Spreads Widen Into the Close (and What It Costs You)As a 0DTE option nears expiration, market makers face soaring gamma risk and pull liquidity — so bid-ask spreads widen right when you may need to exit.
Why Your 0DTE Option Shows a Loss the Second You Buy ItYou buy an option and it's instantly red before SPY moves a tick. It's not a glitch — you bought at the ask, and your platform marks the position at the…
Why a Limit Order Above the Ask Still Fills at the AskSet a buy limit above the current ask and you won't overpay — a limit is a maximum, so it fills at the best available price (the ask or better), giving…
Why a Spread Fills as One Order, Not Two Separate LegsWhen you trade an options spread, it fills as a single net order at one combined price — not two separate legs.
Your Call Lost Money Even Though SPY Went Up: Here's WhyYou were right on direction and still lost money on a SPY call. Here are the four culprits — time decay, an IV drop, the bid-ask spread, and low delta — and how to stop them eating your scalp.
Your Options Stop Triggers on the Option Price, Not on SPYA stop order placed on an option triggers off the option's own price — not SPY's. So a wide spread or a bad print can stop you out even when SPY hasn't…

Basics 18

0DTE vs Swing Trading: Speed vs Patience0DTE trading is intraday, fast, and decay-driven with no overnight risk; swing trading holds positions for days to weeks, riding larger moves. Here's the difference and which temperament each suits.
Buying vs Selling Options: Which Approach Fits You?Buying options offers defined risk and big upside but fights time decay; selling options collects decay with a high win rate but larger losses.
ITM vs OTM Options: In-the-Money vs Out-of-the-MoneyIn-the-money (ITM) options have intrinsic value and higher delta; out-of-the-money (OTM) options are cheaper, all time value, and need a move to pay.
IWM 0DTE Options: Scalping Small-Cap VolatilityIWM tracks the Russell 2000 small-cap index and offers daily 0DTE options with a different character than SPY
Index Options vs ETF Options: SPX vs SPY, ExplainedIndex options (like SPX) are cash-settled, European-style, and may get favorable tax treatment; ETF options (like SPY) are physically settled…
LEAPS vs Short-Dated Options: Long-Term vs FastLEAPS are long-dated options (a year or more out) used for long-term, low-decay directional bets; short-dated options (weeklies, 0DTE) are fast, cheap…
Long vs Short Options: The Buyer's and Seller's Opposite WorldsBeing long an option means you bought it (defined risk, rights); being short means you sold it (obligations, undefined risk possible).
Options vs Futures for Day Trading: Two Ways to Trade the S&POptions offer defined risk and pay for volatility; futures offer linear leverage and 24-hour trading but open-ended risk.
Options vs Stocks for Day Trading: Leverage vs SimplicityDay trading stocks is simpler with linear exposure and no expiration; day trading options adds leverage and defined risk but complexity and decay. Here's how to decide which suits your day trading.
QQQ 0DTE Options: Scalping the Nasdaq's Daily ExpiriesQQQ tracks the Nasdaq-100 and has liquid daily 0DTE options — a more volatile, tech-heavy cousin to SPY. Here's what's different about scalping QQQ 0DTE, and how the dealer-level concepts carry over.
SPY Options vs SPY Shares: Leverage vs SimplicitySPY shares give you simple, linear exposure with no decay; SPY options give you leverage and defined risk but fight time decay. Here's the tradeoff and which fits an intraday trader.
Scalping vs Day Trading: What's the Difference?Scalping and day trading both close positions the same day, but scalping targets many small, quick moves while day trading holds for larger intraday…
Weekly vs Monthly Options: Which Expiration to Trade?Weekly options offer more frequent expirations, faster decay, and cheaper premiums; monthly options have more time, more liquidity historically, and…
What Does DTE Mean? Days to Expiration, ExplainedDTE stands for Days to Expiration — how many days until an option expires. 0DTE means it expires today. Here's what DTE means, why it drives time decay, and why 0DTE is a different animal.
What Is a Fill? How Your Order Becomes a PositionA 'fill' is when your order actually executes — the moment your order to buy or sell becomes a real position at a real price.
What Is a Strike Price? The Number That Defines Your OptionThe strike price is the fixed price at which an option lets you buy (call) or sell (put) the underlying.
What Is an Option Premium? What You Actually PayThe premium is the price you pay to buy an option — quoted per share, so you multiply by 100 for the real cost.
XSP 0DTE Options: The Cash-Settled, Tax-Friendly Mini-SPXXSP is the Mini-SPX index option — one-tenth the size of SPX, cash-settled, with no assignment risk and potential Section 1256 tax treatment.

Greeks 12

Delta vs Gamma: The Difference Every Options Trader NeedsDelta measures how much an option moves per $1 in the underlying; gamma measures how fast delta itself changes.
Higher-Order Greeks for 0DTE: What Actually MattersOn 0DTE, some higher-order Greeks dominate (gamma, charm) while others barely matter (vega, vanna, vomma).
Second-Order Greeks Explained: Vanna, Charm, Vomma & MoreFirst-order Greeks (delta, gamma, theta, vega) measure sensitivity to price, time, and volatility.
Theta vs Vega: Time Decay vs Volatility ExposureTheta measures how much an option loses to time decay each day; vega measures how much it moves per point of implied volatility.
What Is Charm? Delta Decay and the End-of-Day PinCharm (delta decay) measures how an option's delta changes purely from the passage of time.
What Is Color (the Greek)? Gamma Decay Over TimeColor measures how an option's gamma changes as time passes — the time decay of gamma. It's why 0DTE gamma explodes into expiration. Here's color explained for options traders.
What Is Delta Neutral? Trading Without Directional BiasA delta-neutral position has offsetting deltas so it doesn't profit or lose from small directional moves
What Is Speed (the Greek)? The Third Derivative of PriceSpeed measures how an option's gamma changes as the underlying price moves — the third-order price Greek. It matters most for near-expiration, at-the-money options. Here's speed explained.
What Is Vanna? The Greek Behind Volatility-Driven RalliesVanna measures how an option's delta changes as implied volatility moves — a second-order Greek that drives the dealer hedging flows behind many…
What Is Veta? The Time Decay of Volatility ExposureVeta measures how an option's vega changes as time passes — the time decay of your volatility exposure.
What Is Vomma? Vega Convexity, Explained SimplyVomma measures how an option's vega changes as implied volatility changes — the 'convexity' of volatility exposure.
What Is Zomma? Gamma's Sensitivity to VolatilityZomma measures how an option's gamma changes as implied volatility changes — a third-order Greek connecting gamma and vol. Here's what zomma is and why it's mostly a dealer/quant concern.

Glossary 11

A SPY-Options Scalper's Glossary: 40 Terms to KnowA plain-English glossary of the 40 essential terms for scalping SPY 0DTE options — from strike, premium, and delta to gamma flip, call wall, VWAP, chop…
What Does "Above VWAP / Below VWAP" Tell Me?VWAP is the volume-weighted average price — the day's fair-value benchmark. Price above VWAP suggests intraday buyers are in control; below suggests…
What Does "Boundaries" Mean in a Trade Plan?In a trade plan, 'boundaries' are the hard risk limits you set in advance — max risk per trade, daily loss limits, position caps
What Does "Lifting the Offer" Mean?'Lifting the offer' means buying aggressively at the ask price — taking the seller's offer rather than waiting. It signals urgent, aggressive buying.
What Does "Pinned to a Strike" Mean?'Pinned to a strike' means price is being held near a big options strike by dealer hedging into expiration — a magnet effect that traps price.
What Does "The Tape" Mean in Day Trading?'The tape' is trader slang for the live stream of price and volume — the real-time record of every trade printing.
What Is "Chop" and Why Does It Kill Scalpers?'Chop' is a choppy, directionless market that grinds sideways in a tight, noisy range — and it's a scalper's worst enemy because it triggers false signals…
What Is a "Failed Breakdown" and Why Do Traders Love It?A failed breakdown is when price breaks below support but can't follow through and snaps back up — trapping shorts and fueling a rally.
What Is a "Liquidity Void" and How Does Price Move Through It?A liquidity void is a price zone with few resting orders — so when price enters it, it can move fast with little resistance.
What Is a "Reclaim" of a Level?A reclaim is when price falls below a key level, then pushes back above it — reclaiming it as support.
What Is a "Sweep" in Options Order Flow?An options sweep is an aggressive order that 'sweeps' across multiple exchanges to fill quickly — often read as urgent, informed buying or selling.

The Greeks 6

Delta-Based Strike Selection: Why the Right Delta Beats a Round NumberPicking options strikes by delta instead of by price gives you consistent responsiveness across any SPY level.
Does Delta Really Equal the Probability of Expiring In-the-Money?The rule of thumb says a 0.30-delta option has about a 30% chance of expiring in-the-money.
Moneyness Shifts Intraday: How ATM Becomes ITM or OTM in MinutesMoneyness is measured against the current price, so as SPY moves your at-the-money option becomes in- or out-of-the-money
What Is Delta?Delta measures how much an option's price moves when the stock moves $1 - and doubles as a rough probability of finishing in the money. Here is how to read delta without the jargon.
Why ATM Options Have the Most Gamma (and the Most Whip)Gamma peaks at-the-money and explodes into expiration. That's why a 0DTE ATM option's delta swings wildly on small SPY moves
Why Vega Barely Matters on 0DTE OptionsVega measures sensitivity to implied volatility, and it scales with time to expiration — so on a 0DTE option it's tiny.

Options Basics 4

Calls vs. Puts, ExplainedA call is a bet up, a put is a bet down - but that is only half the story. Here is how call and put options actually work, what you pay for, and why direction alone rarely pays.
How Options Expiration WorksAt expiration an option is either in the money and settled, or worthless. Here is how expiration works, what assignment and exercise mean, and why OpEx days can move the whole market.
How to Read an Options ChainAn options chain lists every strike and expiration with its price, volume, and open interest. Here is how to read the grid, what each column means, and what actually matters.
Intrinsic vs. Extrinsic ValueAn option's price is part real value and part time-and-volatility premium. Here is the difference between intrinsic and extrinsic value, and why understanding it explains where your money goes.

Pricing 4

Analyst vs Trader: Which NoVo Plan Actually Fits YouNoVo's two plans serve different needs: Analyst ($129/mo) is the intelligence and dealer-level map; Trader ($209/mo) adds one-click execution with…
Free Trials and Refunds: The Honest "Try Before You Buy"NoVo is month-to-month and cancel-anytime, with no profit-share lock-in — so trying it is low-commitment by design.
Is NoVo Worth It? An Honest Cost-Benefit BreakdownWhether NoVo is worth $129/mo (Analyst) or $209/mo (Trader) depends on what you get versus what you'd spend or fumble without it.
Why NoVo Charges a Subscription, Not a Profit CutNoVo charges a flat subscription rather than taking a percentage of your profits — a deliberate choice that keeps incentives honest and your money yours.

Plain English 3

Low VIX Doesn't Mean Low RiskA calm VIX feels like a green light. For 0DTE and same-day SPY traders it's often the opposite
What Is 0DTE Options Trading? A Plain-English Guide0DTE means zero days to expiration — options that expire the same day you trade them. Here's how 0DTE options work, why traders use them on SPY, the real…
What Is Gamma Exposure (GEX)? A Plain-English GuideGamma exposure (GEX) is one of the most useful — and most misunderstood — concepts in options trading.

Instruments 2

Leveraged & Inverse ETFsLeveraged (2x/3x) and inverse ETFs reset daily, so over time volatility 'decay' erodes them and they drift from the underlying's return.
What Is an ETF?An ETF is a basket of assets that trades like a single stock. Here is how ETFs work, why SPY - the S&P 500 ETF - is the most-traded instrument in the world, and why that liquidity matters.

Reference 2

The Quiet Edge: Short-Term Rates on the Cash a 0DTE Trader Holds0DTE scalpers hold cash most of the day, deploying only briefly per trade. In a positive-rate environment, that idle cash can earn short-term interest
Wash Sales and Active Scalping: What to KnowThe wash-sale rule can disallow losses when you rebuy a substantially identical security within 30 days — a rule active scalpers brush against constantly.

Trading Basics 2

Going Long vs. Going ShortGoing long profits when price rises; going short profits when it falls. Here is how each works, why shorting carries different risk, and how options let you express both without borrowing shares.
What Is Leverage?Leverage lets you control a larger position than your cash alone allows - magnifying both gains and losses. Here is how leverage works, how options are leveraged, and why it cuts both ways.