# Stock Options — full corpus # LLM Wiki An open-source template for building LLM-powered knowledge bases, following [Andrej Karpathy's "LLM Wiki" pattern](https://gist.github.com/karpathy/442a6bf555914893e9891c11519de94f). You provide raw sources. The LLM reads them, writes structured wiki pages, cross-links everything, and maintains it over time. You never edit the wiki directly — you curate sources and ask questions. ## How It Works The system has three layers: ``` raw/ Sources you collect (articles, transcripts, notes, PDFs) wiki/ LLM-written & maintained pages (summaries, concepts, entities, syntheses) CLAUDE.md Schema that tells the LLM how to structure everything ``` Three operations drive the workflow: | Operation | Trigger | What happens | |-----------|---------|--------------| | **Ingest** | "ingest raw/my-source.txt" | LLM reads the source, creates a summary page, creates/updates concept and entity pages, adds cross-links, updates the index and log | | **Query** | Ask any question | LLM searches the wiki, synthesizes an answer with citations, optionally creates a synthesis page for novel insights | | **Lint** | "lint" or "health check" | LLM audits all pages for orphans, contradictions, missing links, incomplete sections, and low-confidence claims — fixes what it can, reports the rest | ## Quick Start 1. **Clone this repo** ```bash git clone https://github.com/YOUR_USERNAME/llm-wiki.git my-knowledge-base cd my-knowledge-base ``` 2. **Customize CLAUDE.md** for your domain - Update the Purpose section with your topic - Replace the placeholder tagging taxonomy with your own categories - Adjust confidence level descriptions if needed - Everything else (workflows, page formats, linking rules) works as-is 3. **Drop sources into `raw/`** - Text files, transcripts, articles, notes — any plain text - These are immutable once added; the LLM never modifies them 4. **Tell the LLM to ingest** ``` ingest raw/my-first-source.txt ``` The LLM will create summary pages, concept pages, entity pages, cross-links, and update the index. 5. **Ask questions** ``` What are the key differences between X and Y? ``` The LLM answers from the wiki, citing specific pages. 6. **Run health checks** ``` lint ``` The LLM audits the wiki and fixes issues. ## Directory Structure ``` . ├── CLAUDE.md # Schema — the LLM's instructions ├── raw/ # Your source documents (immutable) └── wiki/ ├── index.md # Master catalog of all pages ├── log.md # Append-only activity log ├── dashboard.md # Dataview dashboard (Obsidian) ├── analytics.md # Charts View analytics (Obsidian) ├── flashcards.md # Spaced repetition cards ├── summaries/ # One page per source document ├── concepts/ # Concept and framework pages ├── entities/ # People, tools, organizations, etc. ├── syntheses/ # Cross-cutting analyses and comparisons ├── journal/ # Research/session journal entries │ └── template.md # Journal entry template └── presentations/ # Marp slide decks ``` ## Enhancements This template includes several extras beyond the core wiki pattern: ### Dataview Dashboard (`wiki/dashboard.md`) Live queries that surface low-confidence pages, recent updates, concepts by tag, and pages with the most sources. Requires the [Dataview](https://github.com/blacksmithgu/obsidian-dataview) Obsidian plugin. ### Charts View Analytics (`wiki/analytics.md`) Visual analytics with pie charts, bar charts, and word clouds. Requires the [Charts View](https://github.com/caronchen/obsidian-chartsview-plugin) Obsidian plugin. ### Mermaid Diagrams Use Mermaid code blocks in any wiki page to create flowcharts, sequence diagrams, or concept maps. Native support in Obsidian and GitHub. ### Marp Slides (`wiki/presentations/`) Create slide decks from markdown using [Marp](https://marp.app/). Drop presentation files in this directory. ### Research Journal (`wiki/journal/`) Track your research sessions, experiments, or applied work with the included template. The LLM can reference journal entries when answering queries. ### Spaced Repetition (`wiki/flashcards.md`) Flashcards in the format used by the [Spaced Repetition](https://github.com/st3v3nmw/obsidian-spaced-repetition) Obsidian plugin. Ask the LLM to generate flashcards from any wiki page. ### MCP Server This repo works with Claude Code's MCP server capabilities. Point an MCP-compatible client at this repo and the LLM can read/write the wiki programmatically. ## Customizing for Your Domain The schema in `CLAUDE.md` is domain-agnostic. To adapt it: 1. **Purpose** — Describe your knowledge domain in one paragraph 2. **Tagging taxonomy** — Replace placeholder categories with your own (e.g., for a cooking KB: `cuisine`, `technique`, `ingredient`, `equipment`) 3. **Confidence levels** — Adjust the descriptions to match your domain's evidence standards 4. **Entity types** — Update the entity page description to match what entities mean in your domain (people, tools, companies, etc.) 5. **Journal template** — Customize `wiki/journal/template.md` for your workflow Everything else — page format, linking conventions, workflows, rules — is universal and works across domains. ## Example Domains This template works for any knowledge-intensive topic: - **Research notes** — papers, experiments, methodologies - **Book analysis** — themes, characters, author techniques - **Competitive analysis** — companies, products, market trends - **Course notes** — lectures, readings, key concepts - **Personal development** — frameworks, habits, book summaries - **Technical documentation** — APIs, architectures, design patterns - **Hobby deep-dives** — any subject you want to master ## License MIT --- title: "Knowledge Base Index" type: index updated: 2026-06-10 --- # Knowledge Base Index Master catalog of all wiki pages. Every page in the wiki must have an entry here. ## Concepts | Page | Tags | Confidence | Updated | |------|------|------------|---------| | [options-fundamentals](concepts/options-fundamentals.md) | options, calls, puts, premium | high | 2026-06-10 | | [moneyness-and-value](concepts/moneyness-and-value.md) | moneyness, intrinsic-value, time-value, leaps | high | 2026-06-10 | | [greeks](concepts/greeks.md) | delta, gamma, theta, vega | high | 2026-06-10 | | [pricing-models](concepts/pricing-models.md) | black-scholes, binomial, put-call-parity | high | 2026-06-10 | | [implied-volatility-and-vix](concepts/implied-volatility-and-vix.md) | iv, volatility-smile, vix | high | 2026-06-10 | | [exercise-assignment-and-clearing](concepts/exercise-assignment-and-clearing.md) | exercise, assignment, occ, option-style | high | 2026-06-10 | | [income-and-hedging-strategies](concepts/income-and-hedging-strategies.md) | covered-call, protective-put, collar, naked | high | 2026-06-10 | | [spreads](concepts/spreads.md) | vertical, credit, debit, calendar, ratio, box | high | 2026-06-10 | | [volatility-strategies](concepts/volatility-strategies.md) | straddle, strangle, iron-condor, butterfly | high | 2026-06-10 | | [synthetics-and-arbitrage](concepts/synthetics-and-arbitrage.md) | synthetics, conversion, risk-reversal | high | 2026-06-10 | | [market-structure-and-data](concepts/market-structure-and-data.md) | open-interest, chains, occ | high | 2026-06-10 | ## Entities | Page | Tags | Updated | |------|------|---------| | | | | ## Summaries | Page | Source | Key Topics | Created | |------|--------|------------|---------| | [corpus-catalog](summaries/corpus-catalog.md) | 41 curated encyclopedic articles | source map, trust level | 2026-06-10 | ## Syntheses | Page | Pages Compared | Created | |------|----------------|---------| | [strategy-selector](syntheses/strategy-selector.md) | all strategy pages (outlook × IV map) | 2026-06-10 | ## Statistics - **Total pages**: 13 - **Concepts**: 11 - **Entities**: 0 - **Summaries**: 1 - **Syntheses**: 1 - **Sources ingested**: 41 (39 encyclopedic articles + OCC Learning + IBKR lesson) - **High confidence**: 12 - **Medium confidence**: 1 - **Low confidence**: 0 --- title: "Exercise, Assignment & Clearing (OCC)" type: concept tags: [exercise, assignment, expiration, occ, american, european] updated: 2026-06-10 confidence: high sources: [raw/web_community-exercise-options-wikipedia.md, raw/web_community-option-style-wikipedia.md, raw/web_community-expiration-options-wikipedia.md, raw/web_community-options-clearing-corporation-wikipedia.md] --- # Exercise, Assignment & Clearing (OCC) ## Option styles The **style/family** defines *when* exercise is allowed: **American** — any time up to expiration (US equity options); **European** — only at expiration (most index options like SPX). Early exercise of American calls is rarely optimal except around dividends; American-style pricing needs lattice models ([pricing-models](pricing-models.md)). ## The assignment chain Exercise flows through the **Options Clearing Corporation (OCC)**, the central counterparty for US listed options: 1. Holder exercises; the OCC fulfills the contract. 2. The OCC **randomly selects a member firm** that is short the same contract. 3. The firm assigns one of its short customers — randomly, FIFO, or another approved equitable method. 4. That customer must fulfill the obligation they took on when writing the option. Practical consequence: as a writer you can be assigned **any time your option is ITM** (American style), and you can't predict when. ## Expiration and exercise-by-exception At expiration, the OCC auto-exercises ITM options past a threshold ("exercise by exception") unless the holder files contrary instructions. Pin risk: a short option hovering at the strike into the close leaves you uncertain whether you're assigned — discover it over the weekend. Writers wanting to avoid assignment close or roll before expiry. Scope note: clearing details are described as of the source's coverage period (the article flags post-2017 activity as not covered); mechanics above are the stable core. --- title: "The Greeks" type: concept tags: [greeks, delta, gamma, theta, vega, rho, risk] updated: 2026-06-10 confidence: high sources: [raw/web_community-greeks-finance-wikipedia.md, raw/web_community-introduction-to-options-the-greeks-trading-lesson.md] --- # The Greeks The **Greeks** are partial derivatives of an option's value with respect to its pricing inputs — the standard vocabulary for option risk. ## First-order - **Delta (Δ)** — sensitivity to the underlying price (∂V/∂S). Calls: 0→1; puts: −1→0. Doubles as a rough probability-ITM proxy and as the hedge ratio (delta-hedging). - **Theta (Θ)** — sensitivity to time passing; long options bleed theta daily ([moneyness-and-value](moneyness-and-value.md)). - **Vega** — sensitivity to implied volatility ([implied-volatility-and-vix](implied-volatility-and-vix.md)). Long options are long vega. - **Rho (ρ)** — sensitivity to interest rates; usually the smallest concern except for LEAPS. ## Second-order - **Gamma (Γ)** — rate of change of delta (∂²V/∂S²). Highest ATM near expiry. Long options are long gamma (delta moves in your favor); short options are short gamma — the mechanism behind most blow-ups of premium-selling strategies. ## How traders actually use them Position Greeks aggregate across legs: a [vertical spread](spreads.md) nets down delta and vega; a [straddle](volatility-strategies.md) is near-zero delta but long gamma/vega and short theta; market makers run delta-neutral books and trade the residual gamma/vega/theta. The Greeks come from a pricing model — in practice Black–Scholes-style ([pricing-models](pricing-models.md)) — so they inherit its assumptions. --- title: "Implied Volatility, the Smile & VIX" type: concept tags: [implied-volatility, iv, volatility-smile, vix, skew] updated: 2026-06-10 confidence: high sources: [raw/web_community-implied-volatility-wikipedia.md, raw/web_community-volatility-smile-wikipedia.md, raw/web_community-vix-wikipedia.md] --- # Implied Volatility, the Smile & VIX ## Implied volatility (IV) The volatility number that, plugged into a pricing model ([pricing-models](pricing-models.md)), reproduces the option's market price — the market's *forward-looking* volatility quote, versus realized/historical volatility. Options are commonly compared and quoted in IV terms rather than dollars; IV exposure is measured by vega ([greeks](greeks.md)). ## The volatility smile / skew If Black–Scholes were literally true, IV would be flat across strikes. Instead, plotting IV against strike produces persistent patterns — the **smile** (higher IV at both wings) and, in equity indexes, a downward **skew** (OTM puts richer than OTM calls, reflecting crash demand). The smile is the standing empirical refutation of constant-volatility assumptions and the reason desks model the whole IV *surface* (strike × expiry). ## VIX Cboe's volatility index — the standard 30-day implied-volatility gauge on the S&P 500, computed from a strip of SPX option prices (methodology per the Cboe whitepaper). Quoted in annualized percentage points; widely read as the market's "fear gauge", and tradable via VIX futures and options. ## Practical reading - High IV ⇒ rich premiums ⇒ favors selling structures ([spreads](spreads.md), iron condors in [volatility-strategies](volatility-strategies.md)); low IV favors buying. - IV crush around earnings: IV inflates before the event and collapses after — long straddles can lose even when the stock moves. --- title: "Income & Hedging: Covered Calls, Protective Puts, Collars, Naked Options" type: concept tags: [covered-call, protective-put, collar, naked-options, hedging, income] updated: 2026-06-10 confidence: high sources: [raw/web_community-covered-option-wikipedia.md, raw/web_community-protective-option-wikipedia.md, raw/web_community-collar-finance-wikipedia.md, raw/web_community-naked-option-wikipedia.md] --- # Income & Hedging: Covered Calls, Protective Puts, Collars, Naked Options Single-option overlays on a stock position — the strategies most retail accounts are approved for first. ## Covered call Hold the stock, sell a call against it. Collect premium as income; upside is capped at the strike. Payoff is equivalent to a **short put** at the same strike (put–call parity in action — [synthetics-and-arbitrage](synthetics-and-arbitrage.md)). The covered put (short stock + short put) mirrors it, equivalent to a short call. ## Protective (married) put Hold the stock, buy a put — insurance with a deductible (strike below spot) and a premium cost. Payoff is equivalent to a **long call**. Drag on returns if rolled continuously. ## Collar Protective put financed by a covered call: long stock + long put (floor) + short call (cap). Often structured zero-cost; you trade away upside for downside protection — common for concentrated stock positions. ## Naked (uncovered) options Writing options with **no offsetting position**. Naked puts: assigned the stock at strike if breached (cash-secured puts are the respectable version). Naked calls: theoretically unlimited loss — the highest-permission, margin-intensive trade. Assignment mechanics: [exercise-assignment-and-clearing](exercise-assignment-and-clearing.md). Defined-risk alternatives built from the same legs: [spreads](spreads.md). --- title: "Market Structure & Data: Open Interest, Chains, Education Resources" type: concept tags: [open-interest, option-chain, occ, market-data] updated: 2026-06-10 confidence: high sources: [raw/web_community-open-interest-wikipedia.md, raw/web_community-occ-learning.md, raw/web_community-options-strategy-wikipedia.md] --- # Market Structure & Data ## Open interest The total number of **outstanding** derivative contracts not yet closed or delivered — a per-contract liquidity/positioning gauge, distinct from volume (today's trades). Rising OI with rising price suggests new longs; falling OI means positions unwinding. High-OI strikes also matter mechanically (pinning, hedging flows near expiry — [exercise-assignment-and-clearing](exercise-assignment-and-clearing.md)). ## Reading a chain Listed options are quoted per expiration × strike, calls and puts side by side, with bid/ask, volume, OI, and IV per line — the working surface for everything in [spreads](spreads.md) and [volatility-strategies](volatility-strategies.md). Liquidity check before any trade: tight bid/ask and meaningful OI at your strikes. ## Strategy taxonomy The encyclopedic strategy index groups positions by outlook (bullish/bearish/neutral) and risk shape (defined vs undefined) — the wiki mirrors that structure across [income-and-hedging-strategies](income-and-hedging-strategies.md), [spreads](spreads.md), [volatility-strategies](volatility-strategies.md), and [synthetics-and-arbitrage](synthetics-and-arbitrage.md). ## Education resources The OCC runs a free learning hub (OCC Learning, optionseducation.org) — the industry-utility source for exercise/assignment and contract-specs questions; note its site is JS-rendered, so agents should prefer this wiki's distilled pages plus the OCC's PDFs. --- title: "Moneyness, Intrinsic & Time Value" type: concept tags: [moneyness, strike, intrinsic-value, time-value, itm, otm] updated: 2026-06-10 confidence: high sources: [raw/web_community-moneyness-wikipedia.md, raw/web_community-strike-price-wikipedia.md, raw/web_community-intrinsic-value-finance-wikipedia.md, raw/web_community-option-time-value-wikipedia.md, raw/web_community-leaps-finance-wikipedia.md] --- # Moneyness, Intrinsic & Time Value ## Strike and moneyness The **strike price** is the fixed price at which the option can be exercised. **Moneyness** is the relative position of the underlying's current price versus the strike: - **ITM (in the money)** — exercising now would have positive value (call: spot > strike; put: spot < strike) - **ATM (at the money)** — spot ≈ strike - **OTM (out of the money)** — exercising now would be worthless ## Premium = intrinsic value + time value - **Intrinsic value** — what the option is worth if exercised immediately (max(0, spot − strike) for calls; max(0, strike − spot) for puts). OTM options have zero intrinsic value. - **Time value (extrinsic value)** — everything above intrinsic: the market's payment for remaining optionality. It is largest ATM, grows with time to expiry and volatility, and decays to zero at expiration (theta decay — [greeks](greeks.md)). ## Expiration horizon Most listed options run weeks to months; **LEAPS** (Long-term Equity AnticiPation Securities) extend listed expirations out a year or more, trading more like stock substitutes with slower decay. What happens at the deadline: [exercise-assignment-and-clearing](exercise-assignment-and-clearing.md). How time value is priced: [pricing-models](pricing-models.md). --- title: "Options Fundamentals: Calls, Puts, Premium" type: concept tags: [options, calls, puts, premium, basics] updated: 2026-06-10 confidence: high sources: [raw/web_community-option-finance-wikipedia.md, raw/web_community-call-option-wikipedia.md, raw/web_community-put-option-wikipedia.md] --- # Options Fundamentals: Calls, Puts, Premium An **option** is a contract conveying the *right, but not the obligation*, to buy or sell an underlying asset at an agreed price (the strike) on or before a later date. (Note: "stock option" here means listed equity options, not employee stock options.) ## The two types - **Call** — buyer has the right to *buy* the underlying from the seller at the strike. Buyers profit when the underlying rises above strike + premium paid; sellers (writers) keep the premium if it doesn't. - **Put** — buyer has the right to *sell* the underlying to the writer at the strike. Buyers profit from declines below strike − premium; writers take on the obligation to buy. ## The asymmetry that defines everything The buyer's risk is capped at the **premium** paid; the writer's risk can be large (unlimited for naked calls — [income-and-hedging-strategies](income-and-hedging-strategies.md)). The premium is the price of that asymmetry, decomposed into intrinsic and time value ([moneyness-and-value](moneyness-and-value.md)) and quoted via implied volatility ([implied-volatility-and-vix](implied-volatility-and-vix.md)). ## Standard US listed contract One equity option contract controls **100 shares**; exercise/assignment runs through the OCC ([exercise-assignment-and-clearing](exercise-assignment-and-clearing.md)). Strategy combinations of these two primitives: [spreads](spreads.md), [volatility-strategies](volatility-strategies.md), [synthetics-and-arbitrage](synthetics-and-arbitrage.md). --- title: "Pricing Models: Black–Scholes, Binomial, Put–Call Parity" type: concept tags: [black-scholes, binomial, put-call-parity, pricing, no-arbitrage] updated: 2026-06-10 confidence: high sources: [raw/web_community-black-scholes-model-wikipedia.md, raw/web_community-binomial-options-pricing-model-wikipedia.md, raw/web_community-put-call-parity-wikipedia.md] --- # Pricing Models: Black–Scholes, Binomial, Put–Call Parity ## Put–call parity The model-free no-arbitrage anchor: for European options on the same strike/expiry, ``` C − P = D·(F − K) ``` (call minus put = discounted forward-minus-strike). Violations are pure arbitrage; parity is also what makes [synthetic positions](synthetics-and-arbitrage.md) possible (long call + short put ≈ long forward). ## Black–Scholes The canonical closed-form model for European options. Its assumptions (continuous hedging, lognormal returns, constant volatility) have been relaxed and generalized into a plethora of successor models, but its *insights* — no-arbitrage bounds, risk-neutral pricing, hedging as the source of option value — are used by practitioners distinct from the literal prices. In practice the market quotes prices and **implied volatility** is backed out through Black–Scholes as a convention ([implied-volatility-and-vix](implied-volatility-and-vix.md)); the constant-vol assumption fails visibly as the volatility smile. ## Binomial model (BOPM) A generalizable discrete-time lattice: step the underlying up/down through a tree, value the option backward from expiry. Slower but handles **American-style early exercise** ([exercise-assignment-and-clearing](exercise-assignment-and-clearing.md)) and discrete dividends naturally — which is why brokers' analytics for US equity options are typically binomial, not Black–Scholes. Model outputs feed the [Greeks](greeks.md). --- title: "Spreads: Vertical, Credit/Debit, Calendar, Ratio, Box" type: concept tags: [spreads, vertical-spread, credit-spread, debit-spread, calendar-spread, ratio-spread, box-spread] updated: 2026-06-10 confidence: high sources: [raw/web_community-vertical-spread-wikipedia.md, raw/web_community-credit-spread-options-wikipedia.md, raw/web_community-debit-spread-wikipedia.md, raw/web_community-calendar-spread-wikipedia.md, raw/web_community-ratio-spread-wikipedia.md, raw/web_community-box-spread-wikipedia.md] --- # Spreads: Vertical, Credit/Debit, Calendar, Ratio, Box Multi-leg positions in the same underlying, netting premium and Greeks for defined-risk exposure. ## Vertical spreads Buy and sell the same type/expiry at different strikes. Four flavors: bull call (debit), bear call (credit), bull put (credit), bear put (debit). Max profit/loss are both capped by the strike width — the defined-risk workhorse. ## Credit vs debit - **Credit spread** — premium received exceeds premium paid; you win if the spread expires worthless (high-IV environments favor these — [implied-volatility-and-vix](implied-volatility-and-vix.md)). - **Debit spread** — net premium paid; you need the underlying to move your way. ## Calendar (horizontal) spreads Same strike, different expirations — short the near expiry, long the far one; harvests faster near-term theta decay ([greeks](greeks.md)). ## Ratio spreads Unequal contract counts (typically sell 2× what you buy, 1:2). The extra short option adds premium but introduces open-ended risk on one side — unlike a plain vertical. ## Box spread Bull call spread + bear put spread at the same strikes = a riskless, delta-neutral payoff equal to the strike width — effectively a synthetic zero-coupon bond / interest-rate position. Any price deviation is arbitrage ([synthetics-and-arbitrage](synthetics-and-arbitrage.md)); retail warning: American-style boxes (early assignment) are how famous blow-ups happen. Neutral four-leg structures (condors, butterflies): [volatility-strategies](volatility-strategies.md). --- title: "Synthetics, Arbitrage & Risk Reversals" type: concept tags: [synthetic-position, arbitrage, conversion, risk-reversal, parity] updated: 2026-06-10 confidence: high sources: [raw/web_community-synthetic-position-wikipedia.md, raw/web_community-options-arbitrage-wikipedia.md, raw/web_community-risk-reversal-wikipedia.md, raw/web_community-put-call-parity-wikipedia.md] --- # Synthetics, Arbitrage & Risk Reversals ## Synthetic positions Put–call parity ([pricing-models](pricing-models.md)) means any of {stock, call, put} can be replicated from the other two: long call + short put (same strike/expiry) = synthetic long stock; long stock + long put = synthetic call ([income-and-hedging-strategies](income-and-hedging-strategies.md)); etc. Useful for margin efficiency and for understanding that every strategy has an equivalent expressed differently. ## Options arbitrage Exploiting relative mispricing for small, near-riskless profits: - **Conversion** — options rich relative to stock: buy stock, sell the equivalent synthetic (short call + long put). - **Reversal (reverse conversion)** — options cheap: the mirror trade. - **Box spreads** ([spreads](spreads.md)) — locking the strike-width payoff when spread prices deviate. In practice, actionable opportunities have largely been competed away by automated trading — these now define *bounds* that market makers enforce rather than retail profit sources. ## Risk reversal Short an OTM put + long an OTM call (or the reverse) — a synthetic directional position financed by the opposite wing. In volatility markets "risk reversal" also names the *quote*: the IV difference between equally-OTM calls and puts, i.e. a direct read on skew ([implied-volatility-and-vix](implied-volatility-and-vix.md)). --- title: "Volatility Strategies: Straddles, Strangles, Condors, Butterflies" type: concept tags: [straddle, strangle, iron-condor, iron-butterfly, butterfly, volatility] updated: 2026-06-10 confidence: high sources: [raw/web_community-straddle-wikipedia.md, raw/web_community-strangle-options-wikipedia.md, raw/web_community-iron-condor-wikipedia.md, raw/web_community-iron-butterfly-options-strategy-wikipedia.md, raw/web_community-butterfly-options-wikipedia.md] --- # Volatility Strategies: Straddles, Strangles, Condors, Butterflies Direction-neutral structures that trade *movement* (or its absence) rather than direction. ## Long volatility - **Straddle** — buy a call and put at the same strike/expiry. Profits if the underlying moves far in *either* direction; loses to theta and IV crush if it doesn't ([implied-volatility-and-vix](implied-volatility-and-vix.md)). - **Strangle** — same idea with OTM strikes on each side: cheaper, needs a bigger move. ## Short volatility (range-bound income) - **Iron condor** — two vertical spreads: short an OTM call spread and an OTM put spread. Traders call the inner short options the "body" and the outer longs the "wings". Selling both sides collects premium; the wings cap the loss. Profits if price stays between the short strikes. - **Iron butterfly (ironfly)** — four options at three strikes with the short strikes *at* the money: more premium than a condor, narrower profit zone. - **Butterfly** — single-type version: long a low strike, long a high strike, short 2× the middle (e.g. all calls). Cheap, pinpoint bet that price finishes near the middle strike. ## Choosing within the family Long gamma (straddle/strangle) when you expect movement and IV is cheap; short structures (condor/fly) when IV is rich and you expect a range — all are short-gamma trades that must respect assignment risk near the short strikes ([exercise-assignment-and-clearing](exercise-assignment-and-clearing.md)). Greek profiles: [greeks](greeks.md). --- title: "Activity Log" type: log --- # Activity Log Append-only record of all wiki changes. ## Format Each entry follows this format: ``` ### YYYY-MM-DD HH:MM — [Action Type] - **Source/Trigger**: what initiated the action - **Pages created**: list of new pages - **Pages updated**: list of updated pages - **Notes**: any contradictions flagged, decisions made ``` --- ### 2026-04-08 00:00 — Setup - **Source/Trigger**: Repository initialized - **Pages created**: index.md, log.md, dashboard.md, analytics.md, flashcards.md - **Pages updated**: none - **Notes**: Empty knowledge base ready for first source ingestion ### 2026-06-10 00:00 — Initial curation (medium rung) - **Source/Trigger**: 41 raw sources (curated encyclopedic articles + OCC Learning + IBKR lesson) - **Pages created**: 11 concepts, 1 summary (corpus-catalog), 1 synthesis (strategy-selector) - **Pages updated**: index.md - **Notes**: Knowledge domain, encyclopedic trust level (declared in corpus-catalog and app scope). strategy-selector is confidence:medium (synthesis, educational-not-advice disclaimer). OCC/IBKR raw pages are JS shells, kept as pointers only. --- ## 2026-06-10 — removed Obsidian scaffolding from the served wiki Deleted `analytics.md`, `dashboard.md`, `flashcards.md` (Obsidian plugin pages — Dataview/Charts View/Spaced Repetition markup, unusable when served as plain Markdown to agents) and the `journal/` scaffold (template only). `CLAUDE.md` directory layout updated: production/planning material lives at repo root, never under `wiki/` (everything under `wiki/` is served publicly). --- title: "Corpus Catalog" type: summary tags: [catalog, sources, map, reference] updated: 2026-06-10 confidence: high sources: [raw/web_community-options-strategy-wikipedia.md, raw/web_community-occ-learning.md] --- # Corpus Catalog This KB covers a **knowledge domain** (not a software product); the corpus is 41 curated encyclopedic articles plus two industry-education pages, mirrored in `raw/` as `web_community-.md`. Trust level: encyclopedic — stable mechanics, not trading guidance or current market data. | Cluster | Raw slugs | Wiki coverage | |---|---|---| | Fundamentals | option-finance, call-option, put-option | [options-fundamentals](../concepts/options-fundamentals.md) | | Value & moneyness | moneyness, strike-price, intrinsic-value-finance, option-time-value, expiration-options, leaps-finance | [moneyness-and-value](../concepts/moneyness-and-value.md) | | Greeks & pricing | greeks-finance, black-scholes-model, binomial-options-pricing-model, put-call-parity | [greeks](../concepts/greeks.md), [pricing-models](../concepts/pricing-models.md) | | Volatility | implied-volatility, volatility-smile, vix | [implied-volatility-and-vix](../concepts/implied-volatility-and-vix.md) | | Exercise & clearing | exercise-options, option-style, options-clearing-corporation | [exercise-assignment-and-clearing](../concepts/exercise-assignment-and-clearing.md) | | Stock-overlay strategies | covered-option, protective-option, collar-finance, naked-option | [income-and-hedging-strategies](../concepts/income-and-hedging-strategies.md) | | Spreads | vertical-spread, credit-spread-options, debit-spread, calendar-spread, ratio-spread, box-spread | [spreads](../concepts/spreads.md) | | Neutral structures | straddle, strangle-options, iron-condor, iron-butterfly-options-strategy, butterfly-options | [volatility-strategies](../concepts/volatility-strategies.md) | | Synthetics & arbitrage | synthetic-position, options-arbitrage, risk-reversal | [synthetics-and-arbitrage](../concepts/synthetics-and-arbitrage.md) | | Market data & education | open-interest, options-strategy, occ-learning, introduction-to-options-the-greeks-trading-lesson | [market-structure-and-data](../concepts/market-structure-and-data.md) | Note: the OCC Learning and IBKR lesson pages are JS-rendered shells in raw form — kept as pointers, not content sources. --- title: "Strategy Selector: Outlook × IV Decision Map" type: synthesis tags: [strategies, decision-map, outlook, iv, risk] updated: 2026-06-10 confidence: medium sources: [raw/web_community-options-strategy-wikipedia.md, raw/web_community-covered-option-wikipedia.md, raw/web_community-vertical-spread-wikipedia.md, raw/web_community-iron-condor-wikipedia.md, raw/web_community-straddle-wikipedia.md, raw/web_community-naked-option-wikipedia.md] --- # Strategy Selector: Outlook × IV Decision Map Cross-page decision map. Confidence medium: the mapping logic is synthesis, not sourced verbatim; mechanics live in the linked pages. **Educational, not advice.** | Outlook | IV rich (sell premium) | IV cheap (buy premium) | |---|---|---| | Bullish | Bull put (credit) spread; cash-secured put | Long call; bull call (debit) spread | | Bearish | Bear call (credit) spread | Long put; bear put (debit) spread | | Neutral / range | Iron condor; iron butterfly; covered call on holdings | Calendar spread (long back-month vega) | | Big move, direction unknown | — (short vol is the opposite bet) | Straddle; strangle | | Hedging a stock position | Collar (zero-cost) | Protective put | ## Risk-tier ladder 1. **Defined risk, no stock**: debit/credit verticals, condors, flies ([spreads](../concepts/spreads.md), [volatility-strategies](../concepts/volatility-strategies.md)) 2. **Stock-backed**: covered calls, protective puts, collars ([income-and-hedging-strategies](../concepts/income-and-hedging-strategies.md)) 3. **Undefined risk**: naked calls/puts, ratio spreads, short straddles/strangles — margin-intensive, assignment-exposed ([exercise-assignment-and-clearing](../concepts/exercise-assignment-and-clearing.md)) ## Standing checks before any trade - IV level vs its own history (rank/percentile), not in absolute terms — [implied-volatility-and-vix](../concepts/implied-volatility-and-vix.md) - Liquidity at your strikes (bid/ask width, open interest) — [market-structure-and-data](../concepts/market-structure-and-data.md) - Earnings/dividend dates inside the trade window (IV crush; early-assignment risk on ITM short calls before ex-div) - Theta/gamma sign: know which side of decay you're on — [greeks](../concepts/greeks.md)