Every word in the course
What the words mean
A word you half-understand is worse than one you have never met — you stop asking. So every term here gets two things: what it is, and one everyday thing it is like. Anywhere in the course, tap an underlined word to see the same thing without losing your place.
Where each one comes up
- Start hereChart, Stop loss, Runner
- Lesson 1Call, Put, Contract, Stop loss
- Lesson 2Strike price, Expiration, Premium, 100 shares
- Lesson 30DTE, Theta decay, Out of the money, In the money
- Lesson 4Candle, Volume, Support, Resistance
- Lesson 5Falling knife, Position size, A plan for the win
0DTE
Zero days to expiration. The contract dies at today's closing bell.
Like this: A coupon that expires at closing time tonight. Not tomorrow. Tonight.
A plan for the win
Deciding where you will take your profit BEFORE you are in the trade.
Like this: Deciding what the bonus is for before it lands — otherwise it just disappears.
Breakeven
The price where you have made nothing and lost nothing.
Like this: Selling a second-hand sofa for exactly what you paid. No better off, no worse.
Broker
The app or company you place your trades through. They hold your account.
Like this: Your bank, but for buying pieces of companies instead of holding cash.
Call
An option you buy when you think the price is going UP.
Like this: Putting a deposit down on a house at today's price. If it is worth more next month, you still pay the old price.
Candle
One slice of time on a chart: where the price opened, where it closed, and how far it swung.
Like this: A day's weather in one shape — the high, the low, where it started and where it finished.
Chart
A picture of what a price has done over time.
Like this: A heart-rate monitor for a company. You are reading the shape, not the individual beat.
Contract
The agreement itself. You are holding the right to buy shares, not the shares.
Like this: A concert ticket. It is not the concert. It is the right to go, and the day after it is paper.
Expiration
The date and time your contract runs out.
Like this: The use-by date on a coupon. The day after, it is worth nothing at all.
Falling knife
Buying more of something on the way down, hoping to average your way out of a loss.
Like this: Digging a deeper hole to get yourself out of a hole.
In the money
The price has passed your strike, so the contract is worth something on its own.
Like this: A voucher for $50 off a $200 coat. Worth walking into the shop with.
Option
An agreement that gives you the right to buy or sell at a set price, for a limited time.
Like this: A deposit that holds a price for you. You can use it, or walk away and lose the deposit.
Out of the money
The price has not reached your strike yet, so the contract has no value of its own.
Like this: A voucher for $50 off a $30 coat. A real voucher. No use to you today.
Paper trading
Practising with fake money on a real broker, before you risk your own.
Like this: A driving lesson in an empty car park. Real car, real steering wheel, nothing to hit.
Position size
How much of your whole account you allow any one trade to be.
Like this: How much of the weekly food shop you would put on one lottery ticket. The answer is not all of it.
Publicly traded
A company anyone is allowed to buy a piece of — Apple, Nike, Target, Ulta.
Like this: A shop that sells slices of itself to whoever walks in, instead of only to the family.
Put
An option you buy when you think the price is going DOWN.
Like this: Insurance on your car. You hope you never need it — but if the value crashes, you are covered.
Resistance
A price ceiling where sellers keep turning up and stop it rising further.
Like this: A low doorway you keep hitting your head on. Same height, every time.
Runner
A trade that is working — the price keeps moving your way after you are in.
Like this: The one horse still pulling away from the pack. You let it run instead of calling it back.
Stop loss
A price you choose in advance where you get out. It fires whether you are watching or not.
Like this: The automatic shut-off on a kettle. You do not have to stand there to stop it boiling over.
Strike price
The price your contract locks in.
Like this: The number printed on a gift card. Whatever the shop charges later, your card still says that number.
Support
A price floor where buyers keep turning up and stop it falling further.
Like this: The bottom of a bouncing ball. It keeps coming back to about the same place.
Theta decay
Your contract quietly losing value just because time is passing.
Like this: An ice cube in your hand. Do absolutely nothing and it still gets smaller.
Volume
How many people actually traded. It tells you whether a move was real or thin.
Like this: The difference between one person telling you a rumour and the whole street repeating it.