A collection of the most well-known, widely used, and insider phrases from the world of options trading.
Core Options Trading Philosophies
“Trade small, trade often” (Tom Sosnoff, TastyTrade) – Encourages risk management and frequent trades.
“Be the casino, not the gambler” (TastyTrade) – Selling premium is more statistically favorable than buying options.
“Nobody ever went broke taking profits” – Emphasizing the importance of locking in gains.
“First one’s free” – A nod to beginners getting lucky on their first trade, which can lead to overconfidence.
“The market can stay irrational longer than you can stay liquid” (Options version of Keynes’ quote) – Reminds traders that the market doesn’t always behave rationally.
“Risk happens fast” – A caution that market crashes are sudden and brutal.
“Greeks before technicals” – Options traders prioritize the Greeks over traditional chart patterns.
Premium Selling & Theta Decay
“Death before debit” (TastyTrade) – Advocating for selling premium (credit spreads) over buying options.
“Selling premium is an 80% game” – Refers to the high probability of success in premium selling strategies.
“The roll pays the toll” – About rolling positions to manage risk or recover from losing trades.
“Theta gang always wins” – A nod to traders who sell options and profit from time decay.
“Premium is temporary, assignment is forever” – A warning about the risks of short options assignments.
“Front month pays the rent” – Selling short-term options for quick premium income.
“Paper hands never collect theta” – Those who close out positions too early don’t benefit from time decay.
Volatility & Vega Risk
“Vega gonna get ya” – A warning about volatility risk when trading options.
“Buy the vol, sell the move” – Profiting from IV spikes rather than directional moves.
“The vega hammer” – Describes the sudden collapse of implied volatility after an event (like earnings).
“Don’t fight the skew” – Encourages traders to respect volatility skew in options pricing.
“IV is mean-reverting, but your account isn’t” – Implied volatility (IV) may come back down, but traders can blow up before it does.
“Kirkland Theta” – A Reddit-originated joke about cheap, low-quality options trades.
Delta & Gamma Management
“Picking up pennies in front of a steamroller” – Selling options premium can be profitable but carries big risks.
“Gamma scalping” – Adjusting positions to remain delta-neutral and profit from price fluctuations.
“Gamma scalping keeps the lights on” – Refers to delta-hedging as a consistent profit generator.
“0 DTE or die” – Refers to high-risk trading of zero-day-to-expiration options.
“GEX gonna flex” – About gamma exposure (GEX) dictating market moves.
“Pin to win” – Betting on options expiring exactly at a strike price.
“Delta neutral, theta positive” – The goal of market makers managing risk exposure.
Spread & Strategies
“Buy the guts, sell the wings” (Tom Sosnoff) – Refers to constructing iron condors and butterflies.
“Width is wealth” (John Carter) – Encourages using wider spreads for better risk-reward.
“Legging into a spread” – Entering multi-leg strategies separately to optimize entry prices.
“Jelly roll” – A complex spread that exploits time value mispricing.
“When in doubt, widen out” – A reminder to reduce gamma risk by widening spread strikes.
Risk & Margin Management
“Undefined risk, defined gains” – An ironic phrase about the asymmetric risk of naked options.
“Never sell a put you wouldn’t want assigned” – A fundamental rule for cash-secured put sellers.
“A strangle a day keeps the paycheck away” – A joke about selling too many undefined-risk positions.
“Straddles print, but margin calls hurt” – Selling naked straddles is profitable but dangerous.
High-Reward Strategies & Big Gains
“Buy teenies to own Lamborghinis” – Buying ultra-cheap OTM options hoping for a huge return.
“Fading the rip, selling the dip” – Describes contrarian trading, including short premium strategies.
“Short volatility until it doesn’t work” – Selling options works until a volatility spike blows up the trade.