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Profit Source Technology Explained Option positions are affected by movement in the underlying asset price, the passing of time, and changes in implied volatility. Knowing the real-time dollar impact of each of these variables yields extremely tradeable market intelligence. How It Works: ChartBender's Profit Source Technology Engine takes the total profit or loss of any option position between two points in time and isolates the actual amount that was generated by each of: 1) Implied Volatility 2) Time Decay 3) Movement in the Underlying Stock Price For example, let's say that an option position has a profit of $200. Seeing that the total P&L from this position is $200 tells one story: It says that this position is behaving well and that it should be left alone for further gains. However, if the $200 were broken down into its component sources, a different story unfolds: P&L Source Profit (Loss) Implied Volatility: $250 Time Decay: $50 Stock Movement: ($100) Total Profit: $200 This story says that the profits are primarily coming from implied volatility, and that any profits from decay are not offsetting the directional movement against the position. Since implied volatility is generally cyclical by nature, at some point in the future, these profits from implied volatility are going to evaporate. If this happens, a significant opposite directional move needs to be made in order to recapture the profits lost to the change in implied volatility. In addition, how much premium is attached to this position and how close is it to expiration, so that decay will start to contribute siginficantly? Instead of letting the position ride, a better outcome might be to take your profits. Same position - 2 completely different stories. Having partial information requires a guess; having all the information results in a foregone conclusion.