option greeks explained
Delta = A measure of how sensitive an options price is, to changes in the underlying. More specifically it tells us how much an options price changes, when the underlying price changes by $1.
Gamma = Tells us how much Delta changes given a $1 change in the underlying’s price.
Theta = It is time decay. It is what eats at the value of your options as each day goes by.
Vega = How much your options premium or the value of your option is going to change based on a 1% move in implied volatility.
Rho = How much your options value changes given a plus or minus 1% change in the treasury bills risk free rate.
Option Greeks Explained Conclusion
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