Glossary

When an option contract is exercised and the underlying shares are actually bought or sold. If you sold a call option and the buyer decides to use it, you are assigned — meaning you must sell them your shares at the agreed price.

A standard you compare your results against. Rendity uses SPY (the S&P 500 ETF) as a benchmark. If your IZF is higher than the SPY return over the same period, your investing beat the market average.

A widely used mathematical formula for estimating the fair value of an option. It was developed by economists Fischer Black and Myron Scholes in the 1970s. Rendity uses it to estimate option values on days when no live market price is available.

The annualized rate at which an investment grows, assuming gains are reinvested each year. Used to compare investments over different time periods on a level playing field.

A contract that gives you the right to buy a stock at a fixed price before a set date. Sellers of call options collect a premium upfront.

The amount of uninvested money sitting in your brokerage account, available to use for new trades.

A stock or option you no longer hold — you have sold everything you bought (or bought back everything you sold). Any gain or loss from a closed position is realized.

A fee charged by your broker for executing a trade. IBKR charges commissions on stock and option trades; these are recorded in Rendity as part of the cost of each trade.

An options strategy where you sell a call option on a stock you already own. You collect a premium upfront. If the stock stays below the strike price, you keep both the stock and the premium. If it rises above the strike price, your shares may be called away.

Money you transfer into your brokerage account from your bank. A deposit increases your cash balance but is not counted as investment income — it is your own money going in.

A cash payment made by a company to its shareholders, usually every quarter. It is a way of sharing profits directly with investors.

A fund that holds a collection of stocks or other assets and trades on a stock exchange like a single stock. SPY, for example, holds all 500 companies in the S&P 500 index.

The date on which an option contract ends. After this date, the option can no longer be exercised. Options that expire with no value are said to expire worthless.

A feature offered by Interactive Brokers that lets you download a structured report of your account activity. Rendity uses Flex Queries to import your trades, dividends, and position data.

A private code issued by IBKR that proves you have authorized Rendity to request your Flex reports. It is like a password specifically for data exports.

A color-coded grid that shows monthly or yearly performance at a glance. Green cells indicate positive returns; red cells indicate negative returns. The intensity of the color reflects the magnitude of the gain or loss.

One of the largest online brokerage firms in the world. Rendity connects to IBKR accounts to import trading data.

The market's expectation of how much a stock will move in the future, expressed as a percentage. It is implied by the current market price of options. High implied volatility means the market expects large price swings. IBKR uses implied volatility when pricing options.

The annualized return your portfolio has earned, adjusted for the timing and size of every deposit and withdrawal. Unlike simple percentage return, IZF accounts for when exactly money entered or left the portfolio — a deposit made just before a loss hurts more than one made a year earlier.

The overview of your available cash after accounting for capital committed to open put options. It shows how much of your cash is free to deploy versus locked as collateral.

The price IBKR assigns to a position at a given moment — usually the midpoint between the current buy and sell prices in the market. Used to calculate your account value in real time.

The process of valuing your positions at current market prices, rather than at what you originally paid. Rendity marks your portfolio to market every day so the chart reflects today's value, not your original cost.

A stock or option you currently hold and have not yet sold. Gains or losses on open positions are unrealized — they exist on paper but have not been locked in by a sale.

A financial contract that gives the buyer the right (but not the obligation) to buy or sell a stock at a fixed price before a set date. Options are used to generate income, protect against losses, or speculate on price moves.

The price paid to buy an option, or the cash received when selling one. If you sell a covered call for $1.20 per share, the $120 you receive (one contract = 100 shares) is the premium.

The money you have made or lost on an investment. P&L can be realized (from closed trades) or unrealized (from positions you still hold).

The total collection of all your investments — stocks, options, cash — held in your brokerage account.

A holding in a specific stock or option. Owning 50 shares of Apple is one position. Holding a call option on Tesla is another position.

A contract that gives you the right to sell a stock at a fixed price before a set date. Buyers of put options use them as insurance against a stock falling in value.

The profit or loss you lock in when you close a position. Until you sell, a gain or loss is only on paper (unrealized). Once you sell, it becomes realized.

The return you could earn with zero risk — typically the interest rate on short-term US government bonds (T-bills). Used in financial formulas like Black-Scholes as a baseline for comparison.

An index that tracks the 500 largest publicly traded companies in the United States. It is widely used as a measure of how the overall US stock market is performing.

The process of finalizing a trade — money and shares actually changing hands. In the US, stock trades typically settle two business days after the trade date.

The ticker symbol for the SPDR S&P 500 ETF Trust, the most widely traded ETF. It tracks the S&P 500 index. Rendity uses SPY as a performance benchmark.

The fixed price at which an option can be exercised. If you hold a call option with a $150 strike on Apple, you have the right to buy Apple shares at $150 regardless of the current market price.

The process of pulling your latest IBKR data into Rendity. A sync fetches recent trades and position snapshots and updates your dashboard.

A short-term loan to the US government, considered one of the safest investments in the world. T-bill interest rates are commonly used as the risk-free rate in financial models.

A short-term loan to the US government, considered one of the safest investments in the world. T-bill interest rates are commonly used as the risk-free rate in financial models.

A measure of portfolio growth that eliminates the effect of external cash flows (deposits and withdrawals). It answers the question: how well did the portfolio manager invest the money, regardless of when clients added or removed funds? Rendity uses TTWROR for the performance chart and benchmark comparison.

A paper profit or loss on a position you still hold. It reflects the difference between what you paid and what the position is worth today — but it is not locked in until you sell.

A measure of how much a stock's price moves up and down over time. High volatility means large, unpredictable swings. Low volatility means relatively stable prices. Rendity uses historical volatility (based on actual past price movements) when pricing options between syncs.

Money you transfer out of your brokerage account back to your bank. A withdrawal decreases your cash balance but is not counted as a loss — it is your own money coming back out.

The specific formula Rendity uses to calculate IZF. The X stands for extended — it handles cashflows that happen on irregular dates, which is almost always the case in real investing. XIRR is the same formula used in Excel and professional financial software.