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Term Definition
implied volatility

The market's expectation of the future volatility of the underlying stock.

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If the underlying stock price is above the strike price (for calls) or under the strike price (for puts). This means that exercising the option will earn you money.

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Income statement

A financial statement which reflects the financial performance of a company over a certain period, oftentimes referred to as the "profit and loss statement". It includes such things as revenue, expenses, and the net income earned over that period.

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Intrinsic value

An estimate of the "true" value of a company, assuming that the market price does not always reflects this value correctly. This is the cornerstone of the value investing strategy.

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