Options Fundamentals
QQQ
Invesco QQQ Trust — ETF tracking the Nasdaq-100 index (Apple, Microsoft, Nvidia, etc.)
Covered Call
Selling a call option against shares you own. Collect premium income in exchange for capping upside at the strike price.
DTE — Days To Expiration
Trading days until the option expires (weekends excluded). Shorter DTE = faster theta decay in your favour as seller.
ITM — In The Money
Call is ITM when price is above the strike. ITM Probability = chance buyer exercises and your shares get called away.
OTM — Out of The Money
Call is OTM when price is below the strike. All 20 strikes shown are OTM. +N badge = dollars above current price.
Roll DTE
DTE of the replacement contract when rolling. Rolled Value shows what the next cycle would earn.
Premium / Value
Cash collected upfront = Black-Scholes price × 100 shares × contracts. Credited to your account on trade execution.
$/Day (Value Per Day)
Value divided by DTE. Your daily income rate. BEST badge = highest $/day strike.
Technical Indicators
RSI — Relative Strength Index
Momentum oscillator 0–100. Above 70 = Overbought (good for selling calls). Below 30 = Oversold (be cautious).
MACD
12-day EMA minus 26-day EMA. Positive = bullish momentum. Negative = bearish.
BB — Bollinger Bands
Upper/Mid/Lower bands at ±2 standard deviations from the 20-day moving average.
BB %B
Where price sits within the bands. Above 85% = price near upper band (resistance). Good zone for selling calls.
HV — Historical Volatility
Annualised standard deviation of 30-day log returns. Primary driver of option premium size.
Pricing & Forecast
Black-Scholes
Industry-standard option pricing formula using: current price, strike, time, risk-free rate, and volatility.
Risk-free Rate
US 3-month T-bill yield (~5.3%). Used to discount the strike to present value. Minimal effect under 14 DTE.
Monte Carlo
3,000 random price paths using historical drift (μ) and volatility (σ) to build the probability cone.
p10 / p50 / p90
Percentile bands. p50 = median forecast. p10 = bear case. p90 = bull case. Shaded area = p10–p90 range.
Disclaimer: For informational purposes only. Option pricing is theoretical and may differ from live quotes. Not financial advice. Always verify with your broker before trading.