⚙️Options & derivatives

Options are derivatives — contracts whose value derives from the price of an underlying stock. They give the right (not the obligation) to buy (call) or sell (put) a stock at a preset price by a certain date. They serve two very different purposes: hedging (insuring a portfolio against a drop) and leverage (larger exposure with less capital). Leverage is exactly what makes options a powerful but risky tool: both gains and losses are amplified, and a poorly used option can expire worthless. Key terms are the strike price, expiration date, premium (the option's price) and implied volatility (IV) — the market's expectation of future swings. An option's value is driven not only by the underlying's move but also by time decay (theta) and changes in volatility. Popular conservative strategies such as a covered call (selling a call against a held stock) generate income but cap upside; buying calls offers leverage at the cost of time decay. Options are not suitable for complete beginners without understanding the mechanics and risks. This section runs from the basics (what a call and put are) through pricing to specific strategies, always emphasizing risk. QMA tracks options flow as one smart-money layer and provides theoretical payoff calculations — this is educational and analytical content, not a trade instruction.