Calls, puts, strikes, expiry
The minimum vocabulary every other options page assumes you know. If 'OTM call', 'extrinsic value', or 'expiry tail' didn't immediately mean something, this page first.
Calls and puts
A call is the right (not the obligation) to buy the underlying at a specified price by a specified date. A put is the right to sell at a specified price by a specified date. The buyer pays a premium for that right; the seller (writer) collects it.
Calls profit when the underlying rises above the strike. Puts profit when it falls below. Both have capped downside for the buyer (the premium paid) and uncapped upside, mirrored on each side of the strike.
Long call
payoff at expiry · K=100 · premium 8Long put
payoff at expiry · K=100 · premium 8Strike
The strike price is the level at which the option can be exercised. A BTC 70K call with 30 DTE is the right to buy BTC at 70,000 for the next 30 days. The chain lists every strike traded for every expiry, typically dozens per expiry across hundreds of expiries.
Expiry
The expiry date is when the option ceases to exist. Crypto options on Deribit settle in cash to the underlying index. Standard expiries: daily (every weekday), weekly (Friday), monthly (last Friday of the month), quarterly (last Friday of the quarter).
DTE = days to expiry. 0DTE = today, the option expires at end of session. 0DTE options have no time value left and trade purely on directional bet, they're where the most aggressive intraday flow lives.
ITM / ATM / OTM
- ITM, in-the-money. The strike is on the profitable side of spot. ITM call: strike below spot. ITM put: strike above spot.
- ATM, at-the-money. Strike near spot. The cheapest-per-tick of directional exposure; the most informative single point on the chain for vol reading.
- OTM, out-of-the-money. The strike is on the unprofitable side of spot. OTM options are pure optionality: they pay off only if price moves to them by expiry.
Intrinsic vs extrinsic value
An option's premium has two components:
- Intrinsic value, what the option would be worth if exercised right now. ITM options have positive intrinsic; ATM and OTM options have zero.
- Extrinsic value, everything else. The time-value plus volatility-value premium. This is what you pay for the chance the option moves further into the money before expiry. Bleeds toward zero as expiry approaches.
Theta (one of the greeks, see the greeks page) is the rate at which extrinsic value bleeds. The closer to expiry, the faster theta runs.
Moneyness, deltas, and the 25-delta convention
Strikes are sometimes addressed by their distance from spot in dollar terms ("the 70k strike") and sometimes by their delta ("the 25-delta put"). Delta is the option's sensitivity to a $1 move in the underlying, it ranges from 0 to 1 for calls and 0 to −1 for puts.
A 25-delta call is approximately 25% of the way to ITM. Skew panels often plot 25Δ put vs 25Δ call IV because that's the standard moneyness for comparing OTM optionality across expiries.