Learn the basics

Plain-English guide to options and to everything Signal Deck publishes. Educational only — nothing here (or anywhere on this site) is financial advice.

Options in 60 seconds

An option is a contract tied to a stock. A CALL profits when the stock goes up; a PUT profits when it goes down. You pay a small price (the premium) for that exposure — one contract covers 100 shares, so a contract quoted at $0.40 costs $40.

Every contract has a strike (the stock price the bet is measured against) and an expiry (the date the contract dies). DTE means "days to expiry" — 0DTE expires today, 3DTE in three days. Short-dated options move violently in both directions: they can multiply several times over in a day, and they can — and very often do — go to zero. Never spend money on options that you cannot afford to lose entirely.

Reading an alert

An alert names one contract — for example AMZN PUT 255 · 2DTE · quoted $0.90. The quoted price is the live market mid-price at the moment the alert fired. It's the number every one of our published results is measured from — not a stale morning price, not a best-case fill.

On the dashboard, each alert card carries a colored status chip answering one question — "is this still near its quoted price?"

• ENTER — trading at, near, or below the quote.
• CHASING — already ran well above the quote; the move happened.
• DEAD — fell more than half below the quote; the idea failed.
• EXPIRED — past its tradeable life.

The chip is about entry timing only. How the alert actually performed is a separate number — the receipt.

The playbook & receipts

Every result we publish is computed one mechanical way, called the playbook: starting from the quoted price, one-third is scored out at +50%, one-third at +100%, the rest rides toward +300% — and the whole position is scored out if it falls −30% below the quote. No hindsight, no cherry-picking, the same arithmetic for winners and losers.

The next morning, each alert's receipt is published: the same contract, the same quoted price, and the playbook's outcome — positive or negative, every alert, every day. A card can end its day marked DEAD and still show a positive receipt: if it rose through +50% and +100% first, those thirds were already scored out before the fall. That's why the receipt — not the chip — is the performance number.

Receipts are arithmetic on public prices, not a promise of anyone's fills. Real trading involves spreads, slippage and timing differences, and your results will differ.

Risk, sizing, and what we are not

Short-dated options are among the riskiest instruments retail traders can touch. Roughly half of the contracts we alert finish at a loss under the playbook — the published edge comes from the winners being larger than the capped losers, across many alerts, not from any single trade. Position sizing is entirely yours; we never tell you how much to risk, and no outcome is guaranteed. Signal Deck publishes research and its own scored record. It is not a broker, not an advisor, and nothing here is a recommendation to buy or sell any security.

Glossary

• Premium — the price of an option contract (quote × 100 = dollar cost).
• Strike — the stock price the contract is measured against.
• Expiry / DTE — when the contract dies / trading days until then.
• Mid — the midpoint between the current buy (ask) and sell (bid) prices.
• Quoted price — the live mid at the moment an alert fired; our measurement baseline.
• Playbook — the fixed exit arithmetic (⅓ +50% · ⅓ +100% · trail · −30% stop) used to score every alert.
• Receipt — the published next-morning outcome of an alert under the playbook.
• High conviction ⭐ — a pick matching our strictest historical pattern; a label, not a guarantee.

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