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
We hope you enjoyed reading and find Option Greeks Explained useful. Click on the button below to read which strategies could be employed around earnings announcements and why this is the case.