Glossary

Every word, in plain language. Look up anything you forget. No shame in checking.

• 0DTE = An option that has zero days left and ends on that same trading day.
• ask = The lowest price a seller is willing to take for something right now.
• bid = The highest price a buyer is willing to pay for something right now.
• breakout = When a price pushes past a support or resistance level it had been stuck under or over.
• broker = A company that lets you buy and sell things like stocks and options through them.
• brokerage account = The account at a broker where you keep your money and your buys and sells.
• buy = To pay money to own something.
• call = An option that gives you the right to buy something at a set price before a set day.
• candle = A little bar on a chart that shows where a price started, ended, and how high and low it went in one time block.
• cash account = A brokerage account where you must pay the full price yourself and cannot borrow money to buy.
• chart = A picture that shows how a price has moved up and down over time.
• day trading = Buying and selling the same thing within the same trading day.
• delta = One of the Greeks that tells you about how much an option price moves when the thing it follows moves one dollar.
• EMA = A type of moving average line that pays more attention to the newest prices than to old ones.
• expiration = The last day an option can be used, after which it stops existing.
• gamma = One of the Greeks that tells you how fast an option delta changes when the thing it follows moves one dollar.
• in the money = When using an option right now would give it real value, like a call whose set price is below the current price.
• index = A number that follows a group of stocks together to show how that whole group is doing.
• leverage = Using a small amount of money to control something much bigger, which can grow gains and losses fast.
• liquidity = How easy it is to buy or sell something quickly without changing its price much.
• long = When you own something and want its price to go up.
• margin account = A brokerage account where the broker can lend you money to buy, using your stuff as backing.
• moving average = A line that smooths out a price by taking its average over a stretch of time.
• option = A deal that gives you the right, but not the duty, to buy or sell something at a set price before a set day.
• out of the money = When using an option right now would give it no real value, like a call whose set price is above the current price.
• paper trading = Practicing buying and selling with pretend money so no real money is at stake.
• pattern day trader rule = A rule about people who day trade a lot, and your broker can tell you exactly how it applies to your account (the rule is changing in 2026, so always check with your broker).
• position = Something you currently own or owe in the market.
• premium = The price you pay to buy an option.
• price = How much money something costs to buy or sell right now.
• put = An option that gives you the right to sell something at a set price before a set day.
• resistance = A price level where a rising price tends to stop going up.
• risk = The chance that you could lose some or all of your money.
• risk of ruin = The chance of losing so much money that you cannot keep trading.
• S&P 500 = An index that follows 500 of the biggest companies in the United States.
• sell = To give up something you own in exchange for money.
• share = One single piece of a company that you can own.
• short = When you bet that a price will go down instead of up.
• SPX = The name for options based on the S&P 500 index, which settle in cash and end only on their last day.
• SPY = A fund you can buy and sell like a stock that tries to copy how the S&P 500 moves.
• spread = The gap between the bid price and the ask price.
• stock = A small piece of ownership in a company.
• stock market = The place where people buy and sell pieces of companies.
• stop loss = An order that sells for you if the price drops to a set point, to keep a loss from growing.
• strike price = The set price at which an option lets you buy or sell.
• support = A price level where a falling price tends to stop going down.
• the Greeks = A set of measures, like delta and theta and gamma, that describe how an option price may change.
• theta = One of the Greeks that shows how much value an option loses as one day of time passes.
• trend = The general direction a price has been moving, up or down or sideways.
• volume = How many shares or contracts were bought and sold in a time period.