This page lists every primary source cited on OptionIncomeTools for externally-verifiable claims about options rules, tax treatment, model assumptions, and market structure. Each entry has a stable anchor ID so inline citations on other pages can deep-link to it. Last reviewed: 2026-06-23.
Editorial policy: We do not redefine standardized options terms or invent rules. For any externally-controlled fact (assignment rules, tax treatment, exchange specs, etc.), we cite the authoritative source — not our own methodology page. See the editorial policy for our review process.
Options Clearing Corporation (OCC) — official options clearing and assignment rules
The Options Clearing Corporation (OCC)
Effective: 2019-02-15 Last supplemented: 2024-09
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
Section: Chapter II — Options Nomenclature; Chapter X — Exercise and Assignment
The Options Clearing Corporation
Effective: Continuously updated
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
Section: Article VI — Clearance and Settlement; Rule 805 — Assignment
OCC assigns exercises on a pro-rata basis among clearing members; clearing members allocate to customers per their own internal rules (random or FIFO).
Early-exercise notices are processed even if irrational, so a short option can be assigned at any time.
OCC Memorandum on Equity Option Adjustments for Cash Dividends
The Options Clearing Corporation
Effective: Various
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
Section: Standard equity-options adjustment policy
Standard cash dividends below the OCC threshold (currently $12.50 per contract on a 100-multiplier option) do NOT trigger contract adjustments; the dividend's impact is borne by option holders/writers.
Special or stock dividends above the threshold DO trigger contract adjustments to preserve economic equivalence.
US Securities and Exchange Commission, Office of Investor Education and Advocacy
Effective: 2019-03-18
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
Brokers require options approval before customers can trade options; approval levels typically range from Level 1 (covered calls only) to Level 5+ (naked options).
Options trading is generally not appropriate for all investors; brokers must assess suitability.
US Internal Revenue Service — federal tax authority
IRS Publication 550 — Investment Income and Expenses
US Internal Revenue Service
Effective: Tax year 2024
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
Section: Chapter 4 — Sales and Trades of Investment Property; section on options
The risk-free rate used in Black-Scholes calculations is taken from the Treasury par yield curve at a maturity matching the option's time to expiration.
Treasury rates as of 2026-06-23: ~4.5% on 30-day, ~4.4% on 1-year (used as defaults; users can override).
Peer-reviewed academic publications used for model assumptions
Journal of Political Economy, vol. 81, no. 3, pp. 637–654 Authors: Black, Fischer; Scholes, Myron
Effective: 1973
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
The Black-Scholes formula assumes: lognormal stock-price dynamics, constant volatility, constant risk-free rate, no dividends, frictionless markets, and European-style exercise.
Delta in the Black-Scholes-Merton model is N(d1) for calls and N(d1)−1 for puts.
BSM delta approximates the probability that the option finishes in-the-money under the risk-neutral measure, not the real-world distribution.
Options, Futures, and Other Derivatives, 10th Edition
Pearson Authors: Hull, John C.
Effective: 2017
Last reviewed by OptionIncomeTools editorial team: 2026-06-23
Section: Chapter 11 — Trading strategies involving options; Chapter 15 — Early exercise of American options
Early exercise of an American call is rational only when the dividend the holder would receive by exercising exceeds the remaining extrinsic value plus the time-value of the cash that would be paid to exercise.
For a non-dividend-paying stock, it is never optimal to early-exercise an American call.
American puts can be optimally exercised early when interest income on the strike proceeds exceeds the remaining extrinsic value (more likely in high-rate environments).
Polygon Options Starter plan provides 15-minute delayed quotes during market hours.
Polygon's options snapshot endpoint returns chain data including bid, ask, last trade, day close, open interest, volume, implied volatility, and Greeks when available.
Greek values returned by Polygon are computed from the Polygon's own model, not directly from exchange feeds.
Industry-association and broker reference material
IV rank measures where current implied volatility sits in its 52-week range as a 0-100 percentile.
IV rank above 50 historically corresponds to richer option premiums; below 30 corresponds to lower-than-typical premium.
Each citation includes the publisher, effective date, and the date the OptionIncomeTools editorial team last reviewed the source. For corrections or updates, email [email protected].
See also the corrections log and disclaimer.