Brian Lee
Aug 12, 2025
The Stock Price, abbreviated as \(S\), is the current market price of the stock or asset that underlies an option contract. It is called the “underlying” because it is the fundamental asset that determines the value of the derivative—such as a call or put option. The option’s payoff, pricing, and risk all depend on movements in this underlying asset.
We often reference \(S_{opening}\) to mean the first traded price of the day (see Underlying Opening Price (\(S_{opening}\))).
Knowing the stock price lets us apply measures like 30-Day Historical Volatility (\(HV30\)) and Daily Volatility (\(DV\)). These values describe how far the price might move around \(S_{opening}\) during a typical trading day.
Whenever formulas use \(S\), they refer to the spot price at that moment. We’ll write this explicitly as \(S_{spot}\) and explain it further in Spot Price (\(S_{spot}\)). The spot price is the live, real-time trading price for immediate delivery of the asset, not a future or delayed settlement. When you see \(S_{opening}\), it represents the day’s baseline for intraday ranges. By contrast, the last traded price of the day is noted as Underlying Closing Price (\(S_{closing}\)).