Price closes beyond a prior swing high (bullish BOS) or swing low (bearish BOS). Confirms the current trend is intact and institutional momentum is continuing. The SMC checker requires at least one BOS in the past 30 daily bars. A BOS sets the bias context — it is not a trade trigger on its own.

Price breaks against the prevailing trend and closes beyond a key swing point in the opposite direction. Bullish MSS: a bearish trend breaks a recent swing high. Bearish MSS: a bullish trend breaks a recent swing low. Stronger than a CHoCH — suggests the trend may be fully reversing, not just pausing.

The first signal that a trend may be exhausting before a full reversal is confirmed. Bullish CHoCH: in a downtrend, price makes a higher high for the first time. Bearish CHoCH: in an uptrend, price makes a lower low. Not confirmed until followed by a full MSS. Use as a warning, not a trade trigger.

A 3-candle imbalance where the wick of candle 1 and the wick of candle 3 do not overlap. Smart money moved price too fast, leaving unfilled orders in the gap. Price tends to retrace into the zone to fill it before continuing the original direction. Bullish FVG = gap below current price. Bearish FVG = gap above.

A previously bullish FVG that price entered but then closed through, flipping the zone to resistance. Or a bearish FVG that became support. When price closes through an FVG instead of bouncing, the zone is mitigated and inverts. IFVGs signal that institutional intent at that level has reversed and the zone now acts as supply/demand of the opposite type.

The defining structure of a bullish trend. Each rally exceeds the prior peak (HH) and each pullback stays above the prior trough (HL). The SMC checker counts HH+HL occurrences vs LH+LL occurrences in the last 20 bars. Bullish bias requires HH+HL pairs to outnumber LH+LL pairs. A violated HL is the first structural warning of trend failure.

The defining structure of a bearish trend. Each rally fails below the prior peak (LH) and each drop makes a new trough (LL). The bearish mirror of HH/HL. When LH+LL pairs outnumber HH+HL pairs in the last 20 bars, the SMC checker scores a bearish trend point. A bullish BOS through a prior LH is the first signal a downtrend may be ending.

A deliberate minor swing point that lures breakout traders before the real institutional move. Retail traders see an obvious level, chase the breakout, and place stops just beyond it. Institutions use that cluster of stop orders as liquidity to fill their position, then reverse. A too-obvious breakout level is almost always an IDM trap waiting to be sprung.

SSL (Sell-Side Liquidity): stop losses sitting below swing lows. BSL (Buy-Side Liquidity): stop losses sitting above swing highs. A sweep briefly breaks the level to trigger those stops — filling institutional orders — then reclaims it. Bullish sweep: price dips below a swing low then closes back above. Bearish sweep: price pushes above a swing high then closes back below.

The last bearish candle before a strong bullish impulse (bull OB) or the last bullish candle before a strong bearish impulse (bear OB). Represents where institutions placed large orders that moved price. Remaining unfilled orders sit in that candle's range. When price returns to the OB zone, institutions add to their position — creating a high-probability bounce point.

A failed Order Block that price has broken through, flipping to the opposite zone type. A bull OB that price pushes through without reversing becomes a bear Breaker Block — now resistance on any retest. A bear OB that is reclaimed becomes a bull Breaker Block — now support. Indicates institutional sentiment at that zone has completely reversed.

Price is expensive relative to the defined range between a major swing low and swing high. The top 50% of any established trading range is the premium zone — where smart money sells and distributes positions to retail buyers who are chasing the breakout. Entering longs in the premium zone means you are buying where institutions are selling. SMC traders avoid buying in premium and avoid selling in discount.

Price is cheap relative to the defined range. The bottom 50% of any established trading range is the discount zone — where smart money accumulates positions. Institutions buy in discount during pullbacks, building positions before driving price back into premium to distribute. The equilibrium (50% of range) separates premium from discount. Ideal long entries exist in discount at unmitigated FVGs or Order Blocks.

How much the option price moves per $1 move in the underlying stock. A delta of 0.30 means the option gains $0.30 when the stock rises $1 (loses $0.30 when it drops $1). Long calls have positive delta (0 to +1). Long puts have negative delta (0 to −1). Delta also approximates the probability the option expires in the money: 0.30 delta ≈ 30% chance of expiring ITM.

How fast delta changes as the stock moves. High gamma means your delta is moving quickly — a $1 move changes the option price much faster than expected. Gamma is highest for at-the-money options close to expiration. This is why 0DTE options are so explosive in both directions: high gamma makes small moves feel huge.

Daily time decay — how much the option loses in value each day just from time passing, assuming nothing else changes. A theta of −0.05 means you lose $5 per day per contract. Long options bleed theta every day. Short options collect theta every day. Theta accelerates dramatically in the final 30 DTE, which is why credit spread sellers target 21 DTE entries.

How much the option price changes for every 1% change in implied volatility (IV). High vega means the option is very sensitive to IV moves. Long options have positive vega — rising IV makes them more valuable. Short options have negative vega — rising IV hurts credit spreads. IV crush after earnings wipes out vega value fast.

Sensitivity to interest rate changes. For every 1% change in interest rates, rho estimates how much the option price changes. Calls have positive rho (rising rates = slightly more valuable). Puts have negative rho. For short-term options under 60 DTE, rho is essentially irrelevant. Only matters for LEAPS or long-dated options in rapidly shifting rate environments.

What the options market expects future price swings to be — forward-looking, not historical. High IV means the market expects big moves and options are expensive. Low IV means the market expects calm and options are cheap. IV is expressed as an annualized percentage: IV 30% means the market expects a ~30% annual move, or roughly ±1.9% per day on average.

What the stock actually moved in the past — typically measured over the last 30 days (HV30). Backward-looking, based on realized price movement. Comparing IV to HV tells you whether options are expensive or cheap relative to recent reality. When IV30 is significantly above HV30, options are overpriced and selling premium (credit spreads) is statistically favorable.

Where the current IV sits relative to its own range over the past year. IV Rank 80 means current IV is in the top 20% of all values seen in the past 12 months — IV is elevated and options are expensive relative to their own history. IV Rank 20 means IV is cheap vs its own history. Not compared to other stocks — each stock's IV is measured against itself.

A sharp, rapid drop in implied volatility after an anticipated event (earnings, FDA announcement, economic data). IV surges before the event as the market prices in uncertainty. Once the event passes — regardless of the actual move — that uncertainty evaporates and IV collapses. Long options bought before earnings often lose value even when the stock moves in the right direction.

The implied volatility of a hypothetical option expiring in exactly 30 calendar days, interpolated from actual listed expirations. This is the standardized IV benchmark used to compare stocks on an apples-to-apples basis. IV30 above HV30 signals rich premium. Most option screeners and scanners use IV30 as the primary volatility metric.

Buy to Open (BTO): entering a new long option position — you pay premium upfront. Sell to Open (STO): entering a new short option position — you collect premium upfront. Both create a new position. "Buy to Open" and "Sell to Open" are the two ways a position starts. Every options trade begins with one of these two order types.

Buy to Close (BTC): buying back a short option position to close it and lock in profit or cut loss. Sell to Close (STC): selling a long option position you previously bought to close it and take profit. Both eliminate an existing position. "Close" orders are how you exit — never let an in-the-money option expire without closing it first.

Only fills at your specified price or better. If the market won't meet your price, the order waits. You control exactly what you pay or collect. For options, always use limit orders — market orders on illiquid options can result in terrible fills, often paying the full ask spread or more. The bid-ask spread on options can be $0.50–$2.00 wide on thinly traded names.

Net Debit: you pay cash to enter the trade. Net Credit: you collect cash to enter the trade. Debit spreads (bull call spreads, bear put spreads) cost money upfront — your max loss is what you paid. Credit spreads (put credit spreads, call credit spreads) collect premium upfront — your max profit is what you collected, and max loss is the spread width minus the credit.

The fixed price at which you have the right to buy (call) or sell (put) 100 shares of the underlying stock if the option is exercised. The strike price does not change after you enter the trade — it is locked in at purchase. You choose the strike when placing the order. The strike's relationship to the current stock price determines whether the option is ITM, ATM, or OTM.

The number of calendar days until the option contract expires and becomes worthless or is exercised. At expiration, an option is either worthless (OTM) or has intrinsic value (ITM). DTE drives theta decay — the closer to expiration, the faster premium erodes. The expiration date is the third Friday of the expiration month for standard monthly options (or any listed weekly date for weeklies).

The price of one option contract. A premium of $1.50 means you pay $150 per contract (1.50 × 100 shares). Premium is made up of intrinsic value (what it's worth right now if exercised) plus extrinsic value (time value + IV premium). OTM options have zero intrinsic value — they are 100% extrinsic and decay to zero if the stock doesn't move.

Bid: what buyers are willing to pay right now. Ask: what sellers want. Mid: exactly halfway between the two. The spread between bid and ask is your transaction cost — wider spreads mean worse liquidity. For liquid options (high OI, high volume), the spread is tight (a few cents). For illiquid options, spreads can be $0.50–$2.00 wide — a hidden tax on every trade.

Total number of open option contracts that have been entered but not yet closed or expired at a specific strike and expiration. Higher OI means more active participation at that level — better liquidity and tighter bid-ask spreads. OI updates once per day after market close. It rises when new contracts are created and falls when contracts are closed or expire.

Number of option contracts traded today at a specific strike and expiration. Resets to zero each morning. High volume signals active institutional or retail interest in that strike right now. Volume above OI at a strike can signal unusual activity — institutions opening new large positions. Your scanner watches for volume spikes as a signal of informed money moving.

An option that has intrinsic value right now. Call ITM: stock price is above the strike price. Put ITM: stock price is below the strike price. ITM options cost more (higher premium) because they already have real value. They move more like the underlying stock (high delta). Deep ITM options have delta near 1.00 and behave almost like owning 100 shares.

The strike price is at or very close to the current stock price. ATM options have the highest extrinsic value (time value), the highest theta decay rate, the highest gamma, and delta closest to 0.50. They are the most expensive options relative to their intrinsic value because maximum uncertainty exists about which direction the stock will close by expiration.

The strike has no intrinsic value — the stock has not moved favorably past the strike yet. Call OTM: stock is below the strike. Put OTM: stock is above the strike. OTM options are cheaper because they require the stock to move before they have any value. They are 100% extrinsic value and decay to zero at expiration if the stock doesn't reach the strike.

Intrinsic value: the real, exercise value right now. For a call with strike $100 when stock is at $105, intrinsic value is $5.00. Extrinsic value (time value): everything above intrinsic — the portion driven by time remaining, IV, and uncertainty. All OTM options are 100% extrinsic. Extrinsic value decays to zero at expiration regardless of the stock's price.

You are assigned when the option buyer on the other side of your short option exercises their right. Short call assignment: you must sell 100 shares at the strike (forced sale). Short put assignment: you must buy 100 shares at the strike (forced purchase). Assignment typically happens when a short option is deep ITM near expiration. For spreads, the long leg provides protection against catastrophic assignment loss.

Being assigned before the expiration date. Rare for standard American-style equity options because the option holder almost always gets more value from selling the option than exercising it (they would forfeit the remaining extrinsic value). Most common risk: deep ITM short calls right before an ex-dividend date, when the dividend exceeds the remaining extrinsic value of the option.

Options that are in the money by $0.01 or more at expiration are automatically exercised by the OCC (Options Clearing Corporation) — you don't need to do anything. This means an ITM long call you own will automatically buy 100 shares, and an ITM short put you sold will buy 100 shares. Always close positions before expiration to avoid unwanted auto-exercise or assignment.

The stock price at which your trade makes exactly $0 at expiration — not a profit, not a loss. For a long call: strike price + premium paid. For a long put: strike price − premium paid. For a put credit spread: short put strike − net credit received. Below your PCS break-even the spread starts losing money. The break-even is where risk begins, not where you get assigned.

Max Profit: the most you can possibly make on the trade regardless of how far the stock moves. For credit spreads, max profit = net credit collected × 100. Max Loss: the most you can lose. For credit spreads, max loss = (spread width − net credit) × 100. These are fixed and defined before you enter — no surprises. Knowing both allows you to evaluate the risk-reward ratio immediately.

Defined risk: max loss is capped and known before entry. Vertical spreads (PCS, call spreads) and iron condors are defined risk — no matter how far the stock moves against you, your loss cannot exceed the max loss. Undefined risk: loss can theoretically be unlimited. Naked calls, naked puts, and uncovered short positions are undefined. Never trade undefined risk in a small account.

Options control 100 shares for a fraction of the cost of buying those shares outright. One call option on a $200 stock for $3.00 ($300 cost) gives you exposure to $20,000 worth of stock. That is 67:1 leverage on a cost basis. This amplifies gains and losses dramatically. A 5% move in the stock can produce a 50–200% gain or total loss on the option. Leverage is the reason options are not for passive investing.

Pattern Day Trader rule. If your account has under $25,000 and you execute 4 or more day trades (same-day open and close) in any 5-business-day rolling window, your broker labels you a PDT and restricts you to close-only trades for 90 days. Options bought and closed the same day count as a day trade. Swing trading (holding overnight) does not trigger PDT. Manage DTE and entry timing to avoid same-day exits.

Today's volume compared to the stock's average volume over the past 90 days, expressed as a multiple. RVOL of 3.0 means the stock is trading 3× its normal daily volume right now. High relative volume signals that something is happening — earnings whisper, news, institutional accumulation, or a catalyst. It is one of the most reliable early-warning signals that a significant move is coming.

The number of shares available for public trading — total shares outstanding minus insider-held, restricted, and institutional locked shares. Low float stocks (under 20 million shares) can make explosive moves on modest volume because there are few shares to absorb buying or selling pressure. High float stocks (over 500 million shares) are harder to move significantly. Float is a volatility amplifier, not a direction signal.

The percentage of a stock's float that is currently sold short. High short interest (over 20%) means a large number of traders are betting the stock goes down. If the stock rises instead, those short sellers must buy to cover their positions — a short squeeze — amplifying the upward move. Days-to-cover (short interest ÷ daily volume) tells you how long it would take shorts to exit if they tried to all at once.

Private, off-exchange trading venues where institutions execute large block trades away from the public market to minimize price impact. Dark pool prints show up as large volume trades at specific prices that don't appear on the public tape. When dark pool volume is unusually high and directional (e.g., large buy prints below the ask), it often signals institutional accumulation before a public move.

The unofficial, informal earnings estimate that experienced traders actually use — distinct from the publicly reported analyst consensus. The whisper number reflects what the options market and institutional traders genuinely expect to see. A stock can beat the official consensus but still sell off if it misses the whisper number. Stocks that beat both the official estimate AND the whisper number often produce the strongest post-earnings moves.