Basics

Alpha

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Excess return above a benchmark

What is Alpha?

Alpha The excess return of an investment relative to a benchmark index. In options trading, alpha represents the edge or outperformance generated by a strategy beyond what market exposure alone would provide. Positive alpha indicates the strategy adds value beyond passive investing.

Complete Definition

The excess return of an investment relative to a benchmark index. In options trading, alpha represents the edge or outperformance generated by a strategy beyond what market exposure alone would provide. Positive alpha indicates the strategy adds value beyond passive investing.

Related Terms

Beta Sharpe Ratio Risk Reward Ratio

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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