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SPX vs SPY Options: How Section 1256 Treatment Can Cut Your Tax Bill
Two traders put on the same S&P 500 options strategy. One uses SPX. The other uses SPY. At year-end, their trading results are identical but their tax bills are not. The difference can be thousands of dollars on a single year of options income, and it comes down to one section of the tax code…
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Intrinsic vs. Extrinsic Value: What Makes Up an Option’s Price
When you buy or sell an option, you pay or collect a premium. That premium is not a single number pulled from thin air. It breaks down into two distinct components: intrinsic value and extrinsic value. Understanding what each piece represents, and why one of them always falls to zero, is the foundation for understanding…
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Options Tax Treatment 2026: Wash Sale Rule, 60/40 Treatment, and What to Track
Options are taxed differently than stocks, and the differences can cost you real money if you’re not tracking the right things. Three issues trip up most retail options traders: wash sales that disallow losses in ways stock traders don’t expect, the Section 1256 60/40 tax benefit that applies to index options but not ETF options,…
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Options Greeks Explained: Delta, Gamma, Theta, and Vega
The options Greeks tell you how your position will react to stock moves, time passing, and volatility shifts. Here is what each one means and how to use them together when managing a position.
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Understanding Implied Volatility: What It Is and Why It Matters
Implied volatility is the market’s forecast of future movement built into every option price. Here is what it means, how IV Rank and IV Percentile work, and how to use it to decide when to buy or sell options.
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What Are Options? A Plain-English Guide for New Traders
Options give you the right to buy or sell at a fixed price before a set date. Here is what that means in practice, the key terms you need, and how buying and selling options actually works.